Canadian REIT Drops $120M On Chicago Medical Offices

A Canadian health care real estate investor spent $120 million on five Chicago-area medical office buildings as part of its $602 million entrance to the U.S.

The Triangle Office Building at 1700 West Van Buren Street in Chicago, occupied by Rush University, was the highlight of the Illinois portion of the 27-property, 1.2 million square-foot portfolio that Toronto’s NorthWest Healthcare Properties picked up in deals that closed last week.

NorthWest Healthcare paid $67 million for the Triangle parcel, a five-story building of almost 215,000 square feet completed in 1985, public records show.

The firm’s bet on Rush University comes amid big development plans for Chicago’s Near West Side and the Illinois Medical District in particular. The district, a state commission, is trying to attract more housing and retailers to give health care workers more options to live and shop nearby.

An apartment building and hotel are being built near the intersection of Ogden and Damen Avenues, part of a long-stalled 1.2 million-square-foot mixed-use project known as the Gateway, and Naperville developer Marquette is building a 279-unit apartment building on Damen next to a 272-unit property it revamped and and reopened last year.

Investors are targeting the area after Chicago developer John Murphy invested $140 million to transform the derelict former Cook County Hospital building into a 210-room hotel that opened in 2020, just south of Interstate 290 from the Rush office.

The Canadian investment firm, which has a $10 billion portfolio of 224 properties across Canada, Brazil, Europe, Australia and New Zealand, also purchased four properties in suburban Chicago as part of its first acquisition package in the U.S.

It paid $22.1 million for the Fox Valley Center for Health, a two-story, 46,000-square-foot building at 3310 West Main Street in St. Charles, while spending $22.4 million on a pair of adjacent medical properties at 2500 and 2580 West Fabyan Parkway in Batavia, a total of 39,800 interior square feet. It also picked up the 12,000-square-foot Salt Creek Surgery Center at 530 North Cass Avenue in suburban Westmont for $8.8 million.

NorthWest’s U.S. portfolio includes properties across nine other states, including Indiana, Colorado, Texas and Arizona It consists of seven hospitals, five micro-hospitals and 15 medical office buildings, and is 97 percent occupied with average lease expirations of 10.7 years, the company said.