Cadence Health gets back into Illinois commercial real estate

When the real estate market crashed back in 2008, many hospitals pulled back from being directly involved in the real estate market. Now that the market it beginning to rebound, hospitals are once again looking to own real estate outright. Cadence Health owned Delnor Community Hospital is getting back into the Illinois commercial real estate market in a big way.

 Delnor Community Hospital formed a joint venture back in 2004 with a Hammes Co. subsidiary. Hammes Co. is a health care developer that has now agreed to sell its 80 percent interest in the joint venture to Cadence Health for a reported $22.9 million. Cadence is also looking to acquire ProCure Treatment Centers Inc.'s ownership interest in an outpatient facility for $25 million. In the meantime, Hammes Co. is still developing multimillion dollar health care facilities.

These and similar deals are being brokered by hospitals around the country, not just in Illinois. Now that there is greater access to funds, hospitals are becoming more eager to regain control of their real estate holdings. Many executives believe they no longer need third parties in order to manage their assets and liabilities.

 The biggest commercial real estate transactions are for medical office buildings and outpatient facilities, especially if they are already located on a hospital's campus. As the economic recovery continues, there could be more health care providers such as Cadence Health owning real estate again. It remains to be seen how this will affect the continuing recovery of the real estate market, if at all.

Source: Crain's Chicago Business, "As some hospitals sell real estate, Cadence buys," Kristen Schorsch, July 23, 2013

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