IRA Capital has acquired a South Loop medical facility from an affiliate of lender Ares Management.
The California-based commercial real estate investor paid $21.8 million, or $525 per square foot, for the five-story, 41,500-square-foot outpatient facility at 1411 South Michigan Avenue, which is currently leased to Rush University Medical Center, Crain’s reported.
The South Loop acquisition serves as a good fit for the firm’s growing real estate portfolio, given its investment strategy targeting “essential medical facilities occupied by leading health systems.”
It was previously owned by Chicago-based developer Russland Capital Group, which defaulted on a $76.3 million mortgage for the medical building and adjacent apartments. Ares Commercial Real Estate Management took control of the property in April following a foreclosure suit filed in January.
Ares subdivided it, selling only the medical office while retaining ownership of the adjacent 199-unit apartment tower, which has yet to be sold.
So far this year, IRA Capital, led by principal and co-founder Mohannad Malas, has invested over $600 million in healthcare real estate, according to the firm’s website. It owns the 15,200-square-foot Hawthorn Surgery Center in Vernon Hills and has previously bought and sold medical properties in Washington Heights, Oswego and Downers Grove.
While IRA Capital saw a good investment opportunity in the medical facility, many would-be commercial property investors have stayed on the sidelines due to high interest rates.Nationally, medical office building sales decreased to just under $7.4 billion last year, a drop from the record-high $19.1 billion in 2022, according to Colliers.
Despite the slowdown in healthcare-related real estate, there is still interest. In September, MCB Science + Health purchased a medical office building in Naperville for $28 million from DynaCom Management. The four-story property, developed in 2015 and spanning 72,500 square feet, is 96 percent leased, with Endeavor Health occupying nearly half.
— Andrew Terrell
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