Oak Brook Medical Office Space Purchased by its Tenant

A Northwestern Medicine affiliate bought a seven-story medical office in Oak Brook, upgrading from tenant to owner.

Chicago-based Harrison Street and Hinsdale-based MedProperties Group, the developers of the building, sold the building at 1001 Commerce Drive for $58 million. The building opened in January 2024. DuPage County property records peg the building’s size at around 78,000 square feet, according to CoStar. Development costs were unlisted, but the developers purchased the site for $4.2 million in 2021 and took out about $37 million for a construction loan that year.

Across Chicagoland, deals for property that specializes in medicinal offices and labs are growing by the week. In May, notable transactions totaled over $600 million. Office properties writ large have struggled with vacancy issues following the hybrid work trend, but demand for outpatient space has remained consistent.

In May, Atlanta-based Meadows & Ohy bought the University of Chicago primary care offices at 11 Salt Creek Drive for $18 million. In January, IRA Capital bought the ground lease for 3000 North Halsted in Lakeview for $56 million. The list continues in March, with Landes Group in combination with Farpoint Development purchasing a building in Silver Cross Hospital Campus for $88 million.

Developers have also been repurposing unused suburban retail property for medical purposes. Advocate Health shelled out $23 million for a Naperville medical facility that used to be an LA Fitness. The buyer was also a tenant, another example of healthcare providers looking to capitalize on the market stability by securing long-term control of the places they call home. The seller and redeveloper was a joint venture of HSG Medical and Capital Healthcare Properties, according to the outlet..

The medical office market is remaining stable as the country’s population ages and demand for outpatient offices coincides with a relatively low supply. Investors are still treading carefully with offices that receive federal funding from Medicare and Medicaid, but the overall momentum remains strong.

— Hunter Cooke