A joint venture consisting of Capital Healthcare Properties and HSG Medical has entered the permitting phase of an initiative that will establish a highly-specialized, cardiovascular outpatient ambulatory surgery treatment center (ASTC) for a leading Chicago-area healthcare the system.
The new ASTC will transform a former 43,000-square-foot fitness facility at 1836 Freedom Drive in Naperville, Illinois.
The CHP-HSG joint venture has been coordinating with consultants, the health system and the City for over a year to get to this point, demonstrating the importance and specialization of this comprehensive property retrofitting project.
“We are excited to be reaching these important milestones for this project,” said Dan Ahlering, one of the three founders of Capital Healthcare Properties. “This cardiac ASTC is the first of its kind in an outpatient setting.”
The need and design of this ASTC project is an outgrowth of the surging demand and the growing number of more complex, higher acuity cases occurring within the health system. The original design and use of the building as a fitness center, including 25’+ ceiling heights and minimal columns, promotes an extremely efficient and flexible floorplan to maximize the space for a complex healthcare buildout. The building originally was built in 2008.
“Our development reflects the growing demand for innovative, cost-effective outpatient care driven by advancements in technology and an increasing need for accessible medical services,” said Kage Brown, Managing Partner, HSG Medical. “As the second project in the HSG Medical and Capital Healthcare Properties partnership, this ambulatory surgical treatment center (ASTC) is a testament to our commitment to developing outpatient facilities in prime locations within established medical corridors and areas poised for growth.”
“The cost of construction is extremely restrictive for new ground-up development,” Ahlering said. “Net rents approaching $50 per square foot for ground up medical facilities is not sustainable. Instead, repurposing existing facilities in great locations provides a significantly lower occupancy cost for our provider tenants and is why the CHP-HSG pipeline is heavily focused on adaptively reusing well-built existing assets in strategically important locations.”
The building sits on a five-acre lot and offers more than 200 parking spaces. It is strategically located in the highly desirable and accessible Freedom Commons retail development along Freedom Drive between I-88 and Diehl Road. Surrounded by retail amenities, it is designed to enhance convenience for patients, families, and medical staff alike. With this location, there is significant accessibility, signage and visibility along Freedom Drive and I-88.
Construction will commence in the fourth quarter and the first patients are expected to be seen in the new facility in 2026. Members of the construction team include building architects Antunovich Associates and HDR, civil engineer V3 Companies, MEP engineer IMEG, landscape architect Hitchcock Design Group and general contractor Boldt.
This is the second project for the joint venture between Capital Healthcare Properties and HSG Medical. Earlier this year, the joint venture acquired a four-story, 80,000-square-foot multi-tenant outpatient medical office building in Columbus, Ohio. Anchored by a leading health system, the value-add asset was 85% occupied at acquisition closing.
Brown said that with the U.S. population aged 65 and over expanding at a rate of 3% annually, the demand for specialized medical facilities is more crucial than ever.
