Acquired by private equity healthcare real estate investor IRA Capital
CHICAGO, April 18, 2018 – Cushman & Wakefield announced today that Gino Lollio and Scott Niedergang of the firm’s Healthcare Capital Markets team have facilitated the sale of the Fletcher Drive Medical Center located 40 miles northwest of Chicago in Elgin, Illinois, to California-based private equity real estate investor IRA Capital.
Fletcher Drive Medical Center consisted of ten medical office condominiums totaling 40,000 Square Feet that were individually owned by various physician groups. Prior to sale, Scott and Gino consulted the condo association to maximize the value of their individual units by pursuing a portfolio sale of all the units simultaneously. At closing, IRA Capital collapsed the condo association and converted the asset to a standard multi-tenant medical office building.
As part of the sale, each physician group agreed to lease back their units at lease terms ranging from 5 to 10 years. Tenants in the facility included Advocate Health Care, Illinois Gastroenterology, Urology, Ltd., Elgin Internal Medical Associates, and Elgin Gastroenterology Endoscopy Center. Elgin Gastroenterology Endoscopy Center is an ambulatory surgery center (ASC) with a certificate of need (CON) in-place. The building was 100% occupied at time of sale.
“By agreeing to pursue a sale together, the condo owners at Fletcher Drive Medical Center were able to realize a pricing premium. The buyer pool for this asset in its entirety is much larger than a one-off medical office condo sale,” says Niedergang. “Our team was able to add significant value by creating a streamlined process that allowed for valuation consultation, new lease structuring, marketing, offer negotiation, and a due diligence process for each condo unit owner simultaneously.”
Lollio adds, “Opportunities to acquire 100% occupied medical office buildings with a strong mix of synergistic tenants are few and far between in the Chicagoland market. The inclusion of an ambulatory surgery center combined with the strategic location between Advocate Sherman Hospital and Presence Saint Joseph Hospital made this a unique investment that saw significant interest from the market.”
“IRA Capital has been an active investor in the healthcare real estate space, which represents approximately 25% of the firm’s portfolio,” says Amer Kasm, principal and co-founder of IRA Capital. “We were most attracted to the building because of its synergistic mix of successful medical practices. Our firm understands that there are major changes occurring within the healthcare landscape, and part of our acquisition strategy includes identifying opportunities where we can best position our tenants to be the most successful as the delivery model continues to shift.”
About Cushman & Wakefield’s Healthcare Advisory Practice
Cushman & Wakefield’s Healthcare Advisory Practice provides healthcare organizations with strategic and transformational real estate services that directly affect positive business outcomes. More than 300 real estate specialists help clients make decisions that enhance patient care and accessibility, generate efficiencies across their platforms, and maximize the value of their real estate. In short, we assist in aligning real estate with healthcare missions, whether that focus involves executing on a single specialty, planning for new care delivery models, or combining multiple practices. Our expertise in the healthcare industry, combined with deep local market knowledge, strong relationships with health systems, physician practices, and other healthcare providers, allows for rapid response to our healthcare clients’ needs.
About Cushman & Wakefield
Cushman &Wakefield is a leading global real estate services firm with 45,000 employees in more than 70 countries helping occupiers and investors optimize the value of their real estate. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
About IRA Capital
IRA Capital is a real estate private equity company based in Irvine, California. The company is focused on creating and maximizing value for its investors through the strategic acquisition and management of assets. IRA Capital has acquired in excess of $1 billion of commercial real estate throughout the country over the past eight years, with a current portfolio of approximately 5 million square feet under management. To learn more, visit www.iracapital.com.