“The acquisition of Burr Ridge Medical Center is consistent with Duke Realty’s strategy of expanding its investment in healthcare assets supported by strong healthcare systems,” said Keith Konkoli, senior vice president of Duke Realty’s Midwest healthcare operations. “Burr Ridge Medical Center is a new Class A, state-of-the-art facility and the largest academic medical center in the Chicago suburbs. Plus it is affiliated with LUHS, Chicago’s premier academic healthcare services provider.”
 
Open since March 2011, Burr Ridge Medical Center continues Loyola University Health Systems’ focus on providing medical services to suburban Chicago residents in locations convenient to where they live and work. Burr Ridge houses Loyola University Medical Center’s musculoskeletal, orthopedics and neuroscience service lines, rehabilitation facilities and full-service imaging, as well as other physicians and healthcare practices.

The facility also includes a “Center for the Senses,” which encompasses otolaryngology, ophthalmology and audiology and features an optical shop and hearing center. The facility is located at 6800 N. Frontage Road in Burr Ridge, just off I-55 and County Line Road.

The Menomonee Falls Clinic, at the northeast intersection of Town Hall Road and Custer Lane, is a five-story, 145,000-square-foot medical office building. It will replace the existing Froedtert Health Menomonee Falls Clinic that includes primary care and specialty service practices and functions.

According to Nick Kaminski, senior project manager with Ryan Companies, as part of the natural construction process, certain interior elements have been further defined. For example, near the elevator bank and main reception desk, an open staircase that serves both functional and aesthetic purposes has been added between the first and second floors.

With core and shell construction in full swing since May, a parallel effort has been the interior programming and space planning that is being completed by Anderson Mikos Architects.

The Menomonee Falls Clinic will include primary care and specialty services, and house more than 90 physicians and providers to complement the health services provided at Community Memorial Hospital.  More than 250 staff members will be employed at the clinic when it opens in the fall of 2012.

The building is being constructed on an 11-acre site owned by Ryan. The core and shell of the building was designed by Wright Heerema Architects.  Additional members of the project team include TGRWA for structural engineering, and GRAEF-USA for civilengineering and landscape architecture.  Ryan is providing design-build construction services.

“We are making great progress with the project,” said Kaminski. “It is exciting to see this building progress from architectural drawings to the actual concrete and steel.”

The fund will seek to acquire stabilized, income producing properties in the student housing, senior housing, medical office and storage segments of the market. The fund will cap its leverage at 40 percent across the portfolio and will seek to provide investors with annual average gross returns of 9 to 10 percent, of which 7 to 8 percent is expected to be generated from current income. 

Currently, HSRE is the largest real estate manager focused on the education, healthcare and storage segments of the US property markets. 

The core fund’s first acquisition was an off-market purchase of Sterling Central Apartments, a 1,527-bed purpose-built student housing community located adjacent to the University of Central Florida in Orlando. The asset is currently 98 percent occupied.

The property includes two 3,000-square-foot clubhouses, two state-of-the-art fitness centers, two computer centers, four pools, tanning facilities and a screening room. Student residents can either walk to campus or utilize the university shuttle, which makes frequent stops at the property. The investment is consistent with the types of student housing properties that the core fund will purchase, such as a high quality asset in an irreplaceable location next to a large and growing university. 

In establishing the core fund, HSRE is seeking to capitalize on the experience and knowledge it has gained as the largest owner/manager focusing on investing in these segments of the real estate market. In addition, HSRE expects that the fund will benefit from the exclusive relationships that the firm has formed with more than 30 local and regional operating partners who are the domain experts in the day-to-day property management and leasing of student housing, senior housing, medical office and storage properties. 

Joey Lansing, a 20-year real estate industry veteran who joined the firm in early 2011, will be the fund’s portfolio manager. In this role, Lansing will supervise all aspects of the firm’s core business and the team dedicated to the core strategy including investment strategy, deal sourcing and selection, asset management, fund accounting, investor reporting, capital raising and research.

In addition, though the core fund does not expect to rely heavily on debt as a major driver of fund returns, as evidenced by the University of Central Florida acquisition, the broad availability of very attractive, long-term, fixed rate financing will help to enhance the fund’s returns.

The five-story, 274,000-square-foot Fifth Third Faculty Office Building will house support functions for the hospital, including office space for administrative staff and Indiana University School of Medicine faculty physicians who will practice at the campus, as well as work space for both research and various academic support programs.

Along with an 11-story hospital tower and a planned ambulatory care building, the new facility will enable Eskenazi Health’s physicians and staff to be consolidated on one modern campus. Currently, physician offices are located in multiple older buildings throughout Indianapolis. The new building will be jointly owned by Duke Realty and Health and Hospital Corporation of Marion County, which operates the Wishard system.

Under the terms of the agreement, holders of shares of Cogdell common stock and units of limited partnership interests in Cogdell’s operating partnership, Cogdell Spencer LP (“Cogdell LP”), will receive consideration of $4.25 per share (or unit), representing a premium of 8 percent to Cogdell’s closing price on December 23, 2011 and 13 percent to the average closing price of Cogdell common stock over the past 30 days. The consideration plus anticipated transaction expenses values Cogdell’s properties at a low- to mid- 7 percent net operating income (“NOI”) yield, or slightly over $200 per square foot. Holders of Cogdell’s preferred stock will receive consideration of $25 per share, plus accrued and unpaid dividends through the closing. Cogdell will pay its currently declared common stock dividend as scheduled on January 19, 2012, at which time Cogdell LP will pay a similar distribution on its outstanding limited partnership units. Cogdell and Cogdell LP will not pay further dividends or distributions on their common stock or units pending consummation of the transaction.

“We are delighted to announce this strategic and accretive acquisition that further broadens our footprint in the attractive MOB sector, continues to diversify our business and tenant relationships and keeps our balance sheet strong,” Ventas Chairman and Chief Executive Officer Debra A. Cafaro said in a press release. “Cogdell’s high-quality properties enhance our medical office building market presence, especially in the southeast, and provide an opportunity to scale our Lillibridge Healthcare Services subsidiary platform. We look forward to successfully integrating the Cogdell properties into the Ventas portfolio.”

Highlights of the acquired assets are:

• Acquired MOBs: 68 stabilized (92% occupied), 2 leaseup and 2 in development, 4.2 million square feet;
• Management business acquired: 44 MOBs, 2 million square feet;
• Ventas’s MOB portfolio will increase from 11% to 15% of total NOI;
• Owned MOBs are located in 15 states;
• Eighty-eight percent of the owned portfolio’s square footage (72 MOBs) is located on hospital campuses or is hospital anchored; and
• Twelve new business relationships with investment-grade rated hospitals.

“When this acquisition is completed, Ventas will have the leading MOB business in the U.S., with over 20 million square feet owned or managed, and a coast-to-coast presence that is second to none in the healthcare real estate industry,” Ventas Executive Vice President of Medical Property Operations Todd W. Lillibridge said. “We continue to build on our 25 years of experience exclusively in the medical office building and outpatient arena for the benefit of our clients and stakeholders.”

Construction is currently underway on the project which includes the full renovation of an existing single story office building to accommodate new exam rooms, cast rooms, imaging areas, rehabilitation facilities, and a physical therapy gym. A significant amount of interior demolition work has already been completed and a building addition is being constructed to accommodate waiting areas and a covered patient entrance/drop-off area.

Bob Kolcz, project manager and Fred Jennings, general superintendent, are coordinating the project for Meridian. Areté-Knight is providing single source design services including architectural, structural, MEP/FP, and interior design under separate contract with the client.

Grandview Medical Office Building

Kansas City-based Block Real Estate Services, LLC held its grand-opening Oct. 31 for the Grandview Medical Building in Grandview, Mo. The buildings serves as the new home of Encompass Medical Groups’ Hickman Mills Clinic, Carondelet Health, Carondelet Heart Institute and Albers Medical Pharmacy.

This 20,000-square-foot building will serve as an addition to the New Grandview Triangle, and will be adding more than 60 jobs to the region, including primary care and specialty physicians from outside of Grandview.

Hickman Mills Clinic, an eight-physician primary-care group; Carondelet Health System, with various specialty physicians; and Albers Pharmacy have committed to an effective and complementary medical partnership that will bring a high level of integrated outpatient health services to the community.

The two-story MOB, to be located on a 5.5-acre site at 710 S. Lincoln Rd., will replace Marquette General’s smaller Doctors Park building, and enable the system to expand healthcare services for Delta County residents.

The new building will be developed, financed, owned and managed by Duke Realty, and has been 100-percent pre-leased by Marquette General. The MOB will house laboratory, home infusion, oncology, primary care, specialty care, imaging, physical therapy and occupational medicine services, as well as a blood donor center and administrative offices.

Marquette General is expanding to complement the services offered by nearby OSF St. Francis Hospital. The new location, which fronts U.S. Highway 41 and Michigan Highway 35, will provide easier access for patients and better visibility for Marquette General. Duke Realty has a long-term ground lease for the site, which is owned by Marquette General.

“This new facility is a major commitment by Marquette General,” says A. Gary Muller, Marquette General president and chief executive officer. “It will build on our 20 years of service in Delta County and strengthen our ties to St. Francis Hospital and the entire Delta community.”

The new three-story construction is to be located adjacent to Advocate Christ Medical Center and will have 60,000 square feet of premier medical office space. It is planned as a regional outpatient and primary care facility, along with a specialized cancer treatment center.

Groundbreaking is scheduled for summer of 2012 with occupancy in mid-2013.

Designed by Anderson Mikos Architects, ltd, an award-winning healthcare architecture firm, the building’s infrastructure will support the latest medical technology. The center will have an extensive underground parking garage providing sheltered parking to patients and building occupants.

The building’s southern exposure, along with an extensive glass curtain wall, will allow abundant natural lighting for occupants and will be visually prominent along the 95^th Street medical corridor.

This site acquisition by Bluestone Healthcare Partners, a Chicago-based medical office real estate developer, is its third medical property purchase since 2010. Bluestone currently is also developing healthcare properties in Willowbrook, Highland Park and Westmont.

This loan refinanced an existing full-recourse bank loan. Located in Glendale, Wis., the 25,044-square-foot building was built in 2003.

Milwaukee-based Grandbridge vice president Rob Meister arranged the financing through American Equity Investment Insurance Company. The 10-year fixed-rate loan closed with an interest rate in the mid-5-percent range.  Grandbridge senior analyst Dean Huber assisted with the transaction.