Related Midwest Capital Healthcare Sell Med Offices for $38M

Two developers are cashing out and taking advantage of Chicago’s hot medical office market.

Chicago-based megadeveloper Related Midwest sold a piece of land in South Shore to Advocate Medical Group for $15 million, public records show, which the healthcare provider plans to use to build a 40-bed hospital adjacent to Related’s forthcoming $9 billion South Side quantum computing campus.

The 23-acre land sale at 7931 South Brandon Avenue serves as a benchmark in the South Side neighborhood where property values may soon start seeing a boost from the forthcoming quantum computing campus and the Obama Presidential Library, which is set to open later this month.

Advocate Medical Group also bought a property in the suburbs that was transformed from a Planet Fitness into an outpatient medical facility by developer Capital Healthcare Properties.

Capital Healthcare Properties is a medical office-specific developer formed by former colleagues at Chicago-based development firm Hubbard Street Group in 2023.

CHP was founded by Daniel Ahlering, Jack Sullivan and Jay Heald and partners with a Hubbard Street affiliate called HSG Medical on projects including the Planet Fitness redevelopment at 1836 Freedom Drive in Naperville.

The facility serves as an ambulatory surgery treatment center that includes one procedure room and provides cardiac services as well as pre- and post-recovery care, Aherling previously told The Chicago Tribune.

The two Advocate Medical Group deals come on the heels of a slew of activity in Chicago’s medical office sector.

Most recently, Toledo, Ohio-based firm Welltower sold a nursing home in Hinsdale to Lincolnwood-based Pearl Healthcare for $21.5 million.

That came shortly after the company sold a pair of medical ground leases in the Chicago suburbs for $57 million.

In April, Atlanta-based Meadows & Ohy purchased a University of Chicago primary care office, also in Hinsdale, for $18 million from Chicago-based MedProperties.

And in March, Pearl Healthcare bought The Grove at Evanston at 500 Asbury Avenue in Evanston for $16.8 million and The Grove at The Lake at 2534 Elim Avenue in Zion, near the Wisconsin border, for $16.1 million. Both properties operate as post-hospital rehabilitation centers that offer outpatient services and long-term stays.