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Transactions: Business as usual for Harrison Street

After selling 75% of firm, company resumes it acquisitive ways

By John B. Mugford

One of Harrison Street’s most recent acquisitions included this 95,000 square foot medical office building (MOB) at 430 Warrenville Road, Lisle, Ill. The price was $52 million, or $548 per square foot (PSF), for the three-story facility completed in 2012. (Photo courtesy of CBRE)

CHICAGO — According to healthcare real estate (HRE) industry sources, it will be business as usual for Harrison Street Real Estate LLC following its recent sale of a 75 percent stake in the company for $450 million to Toronto-based Colliers International Group LLC.

Harrison Street has not responded to a request by Healthcare Real Estate Insights for further information. But HRE industry sources indicate that the Chicago-based firm chose Colliers as a capital partner not only for its vast resources and its presence in most of the country’s major markets, but because it is anticipated that the company will allow Harrison Street to continue to make independent decisions concerning its portfolio.

It is likely then, that Harrison Street’s recent acquisition of another large medical office building (MOB) portfolio in Greater Chicago was a continuation of its own ongoing strategy of growing its asset base comprised of healthcare, student housing and self-storage facilities.

In a sale-leaseback deal that closed in recent weeks, Harrison Street acquired eight suburban Chicago medical office buildings (MOBs) for $240 million from Downers Grove, Ill.-based DuPage Medical Group, according to data from real estate research firms Revista, based in Arnold, Md., and Real Capital Analytics (RCA) Inc., based in New York.

The deal came to light on June 20, just hours after last week’s edition of HREIWeekly News Update was issued.

In making the acquisition, Harrison Street has gained a relationship with large, independent physicians group that’s on quite a roll. DuPage Medical Group is the largest independent physicians group in Greater Chicago – the fourth largest group overall — as it has more than 100 locations in the region and nearly 700 physicians.

The ambitious group has plans for plenty of additional growth, both regionally and perhaps nationally, fueled in part by an infusion of $1.45 billion last August from Ares Management, a Los Angeles-based alternative asset manager.

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