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Suburbs lead the way: Chicago’s medical office growth shifts outside the urban core By Brandi Smith
Silver Cross Medical Pavilion
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nvestors and developers are finding renewed opportunity in the Chicago region’s suburban medical office market, where demographic trends and delivery models are converging to reshape healthcare real estate. Silver Cross Medical Pavilion D in New Lenox and the planned Beacon Hill Medical Pavilion in Crown Point, Indiana, are more than new medical buildings. They illustrate a broader shift in regional healthcare real estate — one shaped by aging demographics, rising development costs, the decentralization of healthcare and the growing appeal of suburban access and convenience. 2025 marks the peak in the number of people who are turning 65, according to a research report by Jason Fichtner, executive director of
the Alliance’s Retirement Income Institute, said John Wilson, president of HSA PrimeCare. That surge in aging patients is driving demand for outpatient services across the region. Jonathan Swindle, president of Waveland Property Group, Inc., said this demographic shift is colliding with operational and financial changes across healthcare systems. “Demand for medical office space in the Chicago area is rising due to an aging population requiring more healthcare services, the shift toward outpatient care, and health systems decentralizing from hospitals to community-based locations,” Swindle said. Developers and investors are responding by pursuing suburban projects that prioritize longterm leases, flexible design and proximity to where patients live.
“Additionally, patients increasingly seek convenient, accessible care in suburban areas. Medical tenants are drawn to stable, long-term leases, making this sector attractive to investors seeking resilience and steady returns in a dynamic commercial real estate market,” Swindle said. “Growth is evident in both urban and suburban areas,” Wilson confirmed. “Two of HSA PrimeCare’s focus areas for development activity are the Chicago suburban markets and Northwest Indiana.” Two projects illustrate how suburban medical office strategies are being applied on the ground. In New Lenox, Silver Cross Medical Pavilion D offers nearly 42,000 square feet of outpatient services on the hospital’s campus. Fully occupied as of July 2023, the two-story facility includes urgent care, wound care, primary care, occupational health and specialized ser-
vices such as urology, dermatology and cardiac rehabilitation. It also features a patient-friendly drop-off area and reflects the strong demand for accessible suburban care. Further south in Crown Point, Indiana, HSA PrimeCare is planning the Beacon Hill Medical Pavilion. Still in the early stages, the Class-A development could span up to 60,000 square feet and would anchor a larger mixeduse community. With direct access to I-65 and proximity to providers like UChicago Medicine and Community Healthcare System, the project is designed for flexible leasing and a broad range of outpatient services, targeting one of the region’s fastest-growing population areas. Still, the suburban focus is as much about constraint as it is about opportunity.