US Renal Care - Laredo, TX

Asset Type

Retail

Address
10502 Sandia Dr Laredo, TX United States 78045-6631
Asking Price

S$4,057,000

Sq Footage

9,607

Year Built

2017

Cap Rate

6.50%

Additional Attributes
Current / Passing Rent S$263,700
Escalations 2.0% annually
Lease Expiration 2027-10-31
Lease Type NNN
Options 2 x 5-year options
Tenant US Renal Care Incorporated

Property Description

JLL is pleased to offer for sale the fee simple interest in a build-to-suit single-tenant US Renal Care property located in Laredo, Texas. The property is operating on an absolute triple-net lease with over eight years of primary term remaining and contractual rental growth throughout the primary term and in each renewal option. Leased to US Renal Care, the property features tenancy from the third largest dialysis operator in the country with over 335 facilities across 32 states. This offering presents the opportunity to purchase a dialysis center operating on a long-term lease with absolutely zero landlord responsibilities, contractual rent growth, industry-leading tenancy, and real estate with long-term intrinsic value.

Investment Highlights

10-YEAR ABSOLUTE TRIPLE-NET LEASE

  • The asset is operating on a ten-year absolute triple-net lease with eight and one-half years of term remaining and absolutely zero landlord responsibilities.
  • The lease features contractual rental growth throughout the primary term and in each of the two, five-year renewal options.


INDUSTRY-LEADING DIALYSIS TENANT

  • US Renal Care is the third largest dialysis operator in the United States with approximately 25,000 patients in 335 facilities across 32 states.
  • In February 2019, US Renal Care entered into an agreement to be acquired by a leading private investor group that included Bain Capital, Summit Partners, Revelstoke Capital Partners, and more. The acquisition creates strategic partnerships that will help US Renal Care’s future expansion.


MEDICARE CERTIFIED FACILITY IN GROWING LAREDO MARKET

  • The property recently received Medicare certification, allowing for a larger patient base to visit the facility for dialysis treatment.
  • Medicare certification often takes years for dialysis facilities to obtain, creating high barriers-to-entry and an extremely limited patient base for dialysis facilities that lack this certification. The difficulty in obtaining Medicare certification reflects the tenant’s competitive advantage and long-term commitment to this location.
  • This is the third US Renal Care facility to come to Laredo and was built to meet the high and growing demand for dialysis treatment in the Laredo market.


RECESSION AND INTERNET-RESISTANT INDUSTRY WITH POSITIVE OUTLOOK

  • Dialysis facilities require in-person treatment methods and provide essential and non-cyclical healthcare services that are life sustaining with no sufficient alternatives.
  • The dialysis industry has grown substantially over the past fifteen years and there are over 511,000 end stage renal disease (ESRD) patients in the United States. The number of dialysis patients has grown at an annual compound rate of 3.7% over the last fifteen years, including approximately 121,609 new dialysis patients in 2016.
  • Advancements in healthcare have lowered mortality rates and increased prevalence of renal diseases are projected to drive demand in the dialysis industry for the foreseeable future.


NEW BUILD-TO-SUIT DIALYSIS CLINICS

  • The property was built-to-suit in 2017 to US Renal Care’s specifications, offering brand new, top-of-the-line facilities to best serve its patients.
  • The asset possesses the tenant’s optimal building layout, demonstrating US Renal Care’s commitment to this location on a long-term basis.
  • The tenant invested significant capital and infrastructure into developing these facilities.


STRONG ANNUAL RENT GROWTH AND LOCATED IN TAX FREE STATE

  • The lease features attractive contractual annual rental escalations during the lease period.
  • The state of Texas does not have individual state income tax.


Broker of Record: Marti Scruggs

License: 463645

Listing Contacts
Peter Bauman
Peter Bauman
SVP, Capital Markets
+65 3159 4021
AZ - SA647389000 NV-186153
Brian Shanfeld
Brian Shanfeld
Managing Director, Captl Mkts
+65 3159 4021
IL - 475158824
Tivon Moffitt
Tivon Moffitt
SVP, Capital Markets
+65 3159 4021
AZ - BR639369000 NE - 20170674 NC - LC673 UT - 11178542-AB00 NV - 186027
Alex Sharrin
Alex Sharrin
SVP, Capital Markets
+65 3159 4021
IL - 475.170243
Nicholas Kanich
Nicholas Kanich
SVP, Capital Markets
+65 3159 4021
IL - 475147401
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