PGIM Signs Chicago MOB Lease Renewal
The outpatient facility came online in 2012.
Silver Cross Hospital has signed a long-term lease renewal for 87,461 square feet at Pavilion A, a medical outpatient facility in New Lenox, Ill., a Chicago submarket. PGIM Real Estate owns the Class A, 174,855-square-foot property.
The deal closed nearly two years ahead of the original lease’s expiration. Following the renewal, the tenant will benefit from a net rental rate reduction and improvement allowance. NAI Hiffman negotiated on behalf of Silver Cross, while NexCore Group represented the landlord.
The health-care provider’s space includes the first two levels of the six-story building, as well as eight suites on the upper four stories. Other tenants at the facility include Shirley Ryan AbilityLab.
The average vacancy rate of medical office buildings clocked in at 9.8 percent in the first quarter of this year, rising 18 basis points quarter-over-quarter, according to a CBRE national report. The average asking rate during the same period was $25 per square foot, up almost 1 percent compared to the first quarter of last year.
A Chicago medical office building
PGIM purchased the asset in December 2013 for $72.5 million from NexCore Group, according to Yardi Research Data. At the time, the firm operated as Prudential Real Estate Investors. A $37.2 million loan from Regions Bank financed the acquisition.
NexCore developed the facility as a build-to-suit for Silver Cross Hospital and completed it in 2012. RTKL Associates was the project’s architect, while Mortenson served as general contractor.
Pavilion A is at 1890 Silver Cross Blvd., within the Silver Cross Hospital campus and close to Interstate 355. Downtown Chicago is 39 miles away, while Chicago O’Hare International Airport is 40 miles northeast. Other medical providers in the area include New Lenox Dental Group and Hutton Family Dental.
NAI Hiffman Executive Vice President Perry Higa represented the tenant. NexCore Group Vice President Steve Brooks and Property Manager Katie McReynolds brokered the deal on behalf of the landlord.
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