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Real Estate Forward

Northwestern Memorial Hospital

Evanston, Illinois

Winstead helped a private equity real estate investment client in acquiring a medical office building comprising 21,185 square feet of rentable space.

ESTIMATED VALUE:
$13.2 million

LEAD ATTORNEYS:

OTHER TEAM MEMBERS:

STATUS:
Deal completed March 2023

Winstead helped a private equity real estate investment client acquire a medical office building comprising 21,185 square feet of rentable space. Northwestern Memorial Hospital occupies 95% of the space, while the remaining 5% is leased to a national cellular carrier.

The acquisition process required a specialized and intensive title review. The building was part of a condominium development and was subject to various declarations that stipulated its rights and obligations concerning the acquired parcels. The building was also subject to several parking agreements and redevelopment agreements with the municipality.

Furthermore, the acquisition involved a significant tenant whose lease had unfavorable material provisions for the landlord, including ambiguity regarding the tenant’s triple-net proportionate share. Lastly, a tax proration issue arose at the last hour due to a governmental delay in issuing the second tax installment bill for the previous year. The taxes were not easy to estimate due to property assessment changes that year.

Winstead worked with the seller and the title company to obtain various estoppels and signed agreements to resolve issues and discrepancies identified in the recorded documents. They also removed many items as exceptions to coverage in the title policy. Winstead helped engineer a creative solution to resolve discrepancies in the major tenant’s lease agreement, as the tenant had no incentive to sign a lease amendment. One solution included adding estoppel-type language into the acceptance memorandum, which the tenant was required to sign before closing. Lastly, Winstead helped negotiate a tax proration agreement with the seller to address the tax issues that arose at the last minute.

By displaying unwavering dedication, Winstead unraveled the legal complexities and enabled the client to close the transaction successfully without delay. Winstead carefully addressed the lease, title, and tax issues, clearing the way for future transactions with respect to the property without any obstacles.