Capital Healthcare, HSG Medical buy Lombard office for $3M
Story Highlights Capital Healthcare Properties and HSG Medical acquired Lombard medical building.
Duly Health and Care leased space, bringing occupancy to 100%.
Property upgrades planned, including new parking lot and roof.
Capital Healthcare Properties and HSG Medical acquired a distressed Lombard medical office building for $3 million.
Shortly after the joint venture closed on the sale of the 21,000-square-foot building at 2830 S. Highland Ave., Chicago-area health care provider Duly Health and Care signed a long-term lease to occupy 14,000 square feet, boosting the property's occupancy to 100%.
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Potbelly's and SimonMed Imaging are also tenants of the property located near the Yorktown Center shopping mall and Oak Brook Mall.
The property was acquired from a special servicer but was previously owned by an affiliate of Inland Private Capital, according to Kage Brown, managing partner with HSG Medical.
'The special servicer for a commercial mortgage-backed securities loan on the property foreclosed on Inland and took over the property last year,' said Brown. 'Despite the relative strengths in the medical and retail sectors, there still remain distressed opportunities in the real estate market.'
Upgrades to the property are set to begin this summer and will include a new parking lot, new roof, enhanced front sidewalks, exterior tuckpointing and landscaping.
'As the cost of new construction continues to rise, we are focused on finding strategic health care opportunities within existing buildings, positioning us to meet growing demand in the outpatient sector while achieving significant value through adaptive reuse,' added Brown in a statement.
This is the second venture in the Chicago market for the joint venture, which also purchased a vacant 43,000-square-foot LA Fitness building in Naperville in 2024. They plan to convert the space into a cardiac center for Advocate Health that's slated for completion in 2026.
'In a short period, our team has built a medical portfolio totaling nearly 150,000 square feet and valued at over $50 million,' said Brown. 'And we are aggressively growing our pipeline with deals in the suburbs of Chicago as well as other target markets including Columbus, Ohio, and Phoenix, Arizona.'
Matt Tarshis and Andrew Rubin with Frontline Real Estate Partners represented the seller.
Demand for medical buildings in the Chicago market remains strong, said Brown.
'By [next year], 70% of all health care services in the U.S. are expected to be delivered in outpatient settings, leading to significant demand for outpatient facilities, such as our Lombard and Naperville developments,' said Brown.
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