IRA Capital snags medical building from Ares after foreclosure

Previous owner Russland Capital Group defaulted on $76.3 million for the Rush University Medical Center and adjacent apartments

IRA Capital Buys Chicago Medical Asset After Ares Foreclosure
IRA Capital’s Mohannad Malas, 1411 South Michigan Avenue and Ares Management’s Michael Arougheti (IRA Capital, Google Maps, Ares Management)

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. 

Sign Up for the undefined Newsletter

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

Read more

MCB Buys $28M Medical Office From DynaCom Management
Commercial
Chicago
MCB buys $28M Naperville medical office as sector’s investments slow
Ventas Buys Riviera Beach Hospital For $37M
Commercial
South Florida
Ventas expands South Florida health care portfolio with $37M hospital purchase
IRA's Amer Kasm with 16715-16969 Von Karman Avenue
Commercial
Los Angeles
IRA Capital buys 450K sf office campus in Irvine for $102M
Recommended For You