Healthcare Portfolio 3
Inland
Investment Highlights
Overview
Healthcare Portfolio 3 from Inland Private Capital is an all-cash investment in three medical office buildings. The tenants are Fresenius Medical Care (Chicago, IL) and Starling Physicians (Hartford, CT & New Britain, CT). Fresenius operates a chain of well known dialysis centers across the United States and internationally. Starling Physicians is a specialty physician practice in Connecticut and is a well known practitioner in their local market.
- Year 1 Cash Flow 5.00%
- Initial Occupancy 100.00%
- Est. Time Horizon None
- Yr 1. Cap Rate to Investors 5.72%
- Investor Purchase Price $29,121,408
- Total Offering Size $29,121,408
Loan Information
N/A
- Yr. 1 DSCR 0.0
- Loan-to-Value 0.00%
- Hold Period DSCR None
Key Benefits
The Illinois property, which is operated by Fresenius Medical Care has an investment grade credit rating and a guaranteed lease from their corporate company.
Inland has placed $1.4 Million is a reserve account. This is a significant amount that can be used for tenant improvements as well as capital expenditures at the properties. The anticipated needs over a 12 year period is $1.1 Million.
There is no risk of foreclosure from a lender due to the offering not having a loan.
Population averages above 6 figures across the portfolio.
Annual rent bumps are contracted into the leases at the properties which have a long 15 year term.
Key Risks
The Connecticut properties are older builds, being completed in 1950 and 1966. Because they are older there may be more needed capital improvements. The leases are NNN at the CT properties which places these expenses under the responsibility of the tenant.
The CT tenants (Starling Physicians) do not have a credit rating from Standard and Poor's or Moody's. This increases the risk of default on rent payments for this tenant.
Starling Physicians is a newly formed corporation in 2016, however was formed from well known corporations in CT.
The CT properties have been found to have Asbestos containing materials present. These were found in good condition, but represent a threat if they are not maintained properly.
About Inland
The Inland Real Estate Group of Companies, Inc. ("Inland"), is an industry leader and one of the nation's largest commercial real estate and finance organizations. As a business incubator, we specialize in creating, developing and supporting Inland member companies that provide commercial real estate-related services and alternative investment funds, including limited partnerships, institutional funds and non-listed and listed REITs.