Investor Acquires Three Tenant Medical Office Building
(July 14, 2022) WATERLOO/CHICAGO – Physician Real Estate Capital Advisors (“PRECAP”) announces the $16.4 million closing of the two-property UnityPoint Health Portfolio located at 2413 West Ridgeway and 419 Donald Street in Waterloo, Iowa. PRECAP Managing Principal Scott Niedergang and JDS Real Estate Services, Inc. represented both the seller, a physician partnership, and the all-cash buyer, a net leased fund structured as a Delaware Statutory Trust (DST).
The 30,235 square-foot portfolio is 100% occupied by Allen Memorial Hospital, a subsidiary of UnityPoint Health (Moody’s A1). Prior to sale, Allen Memorial Hospital acquired the Cedar Valley Cardiovascular Center operations at the Donald Street location. PRECAP consulted the physician real estate ownership on the negotiation of new 12-year NNN leases with annual rent escalations based on the consumer price index (CPI).
The Donald Street location is utilized as a cardiovascular center and is adjacent to the 204-bed UnityPoint Health – Allen Hospital. The hospital includes a “Top 50 Cardiovascular Hospital in the USA” and is the only facility of its kind within an eight-county region. Physicians utilizing the subject property have an exclusive agreement to perform heart procedures at the hospital.
“In addition to consulting on the portfolio sale, PRECAP was engaged to assist in the lease negotiations during the sale of Cedar Valley Cardiology to Allen Memorial Hospital,” says Niedergang. “Our client received significantly higher sale proceeds due to our negotiation of longer-term leases, attractive CPI rent escalations, and a NNN structure that minimized landlord expense responsibilities.”
Dr. Kalyana Sundaram, a cardiologist and managing member of the seller, added, “Scott Niedergang played a critical role throughout the entire process of selling our two medical office buildings. He acted as a trusted partner throughout the negotiation of new leases with the hospital, marketing the portfolio, and presenting competitive offers from qualified investors. He was a great advocate for sellers’ interests while maintaining a transparent process with the potential buyers. His transparency made both the seller and the buyer very comfortable in every stage of the transaction. He was a great asset to us and was actively involved in the due diligence and closing. I plan on keeping Scott heavily involved on my next development.”
About Physical Real Estate Capital Advisors, LLC:
Physician Real Estate Capital Advisors, LLC (“PRECAP”) provides sale-leaseback and investment sale healthcare real estate advisory services to physicians, private equity sponsors, investors, and developers. Company principals have executed more than $1.1 billion of transactions throughout the United States. Learn more by visiting www.precap.us.
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