A development company based in Jackson, Ohio constructed the Adena Health Center, a 24,988-square-foot healthcare facility, in 2003 as a build-to-suit for the Adena Health System. The esteemed health system was formed in 1985 and has been committed to providing patients with the best healthcare and personal services since then. Today, the Adena Health System includes three hospitals (Chillicothe, Waverly and Greenfield) and five regional clinics, with a total of 311 beds. Adena provides quality healthcare for the more than 400,000 people who call south central and southern Ohio home. With more than 2,500 employees, Adena serves as an economic catalyst for the region.
Knowing the market was saturated with aggressive and well-qualified buyers seeking medical office buildings leased to leading health systems, such as Adena Health, our team approached the developer about the possibility of selling the property to maximize their return on investment. As we do with every assignment, we provided the client with a pricing analysis that consists of a detailed overview of the asset, tenant, surrounding area and, most importantly, an expected sales range. All of our pricing analyses are based of the financial strength of the tenant(s), lease term, rental increases, location, quality of the building, and overall bearing of the property in the marketplace. An appropriate cap rate range which we foresee the asset trading for in the market is also provided. Information found in all of our pricing analysis are based on factual market data and supported by years of industry experience. For this particular asset, we paid particular attention to the term remaining on the absolute triple-net lease guaranteed by Adena Health System, which held an A3 credit rating from Moody’s; the immediate proximity to several nearby healthcare facilities; and the current demand for high-performing medical office buildings.
Once we were awarded with the assignment, we received immediate responses from all types of buyers, including real estate investment trust (REITs), private investors, net lease investors, 1031 trade buyers, among many others. The offers we produced were very aggressively priced due to the overall quality of the opportunity, as well as the competitive environment created by our unique process. In the end, we were able to select a buyer, execute a purchase and sale agreement (PSA), and close without an incident or delay. The property ultimately sold to a non-listed healthcare real estate investment trust (REIT) based in New York for $5,400,000 on an all-cash basis.
Seller Profile: Developer – Jackson, OH
Buyer Profile: Non-Traded, Private Healthcare Real Estate Investment Trust (REIT) – New York, NY