Medical Office Investment: Credit-rated Tenant

[Dan Hennessy]

Investment Info:

Office Space commercial investment investment.

Purchase price: $1,400,000
Cash invested: $400,000

Stable investment grade asset
Strong tenant with solid operational metrics at site
Built in 2005, the building has good bones
Long-term lease with extension options
Outstanding Location in Close Proximity to Centra Bedford Memorial Hospital
Property sits on 3.35 Acres, opening potential development opportunities

What made you interested in investing in this type of deal?

Having spent 24 years in the biomedical field and 11 years investing in RE, Medical Office Building Real Estate is a way for me to merge my passion for healthcare, bringing new technology to patients, along with real estate. As a first foray into CRE, a credit rated tenant with a long lease term provides stable and passive cash flow, income preservation, and all of the IDEAL benefits of owning real estate.

How did you find this deal and how did you negotiate it?

Working with a broker who specializes in medical office building CRE

How did you finance this deal?

A lender

How did you add value to the deal?

The potential value add lies in potential to sub-parcel 1.5-2 acres of land.

Lessons learned? Challenges?

The lessons learned is that there are certain aspects of real estate that you need to "learn by doing." Before partnering or syndicating MOB deals, it was important for me to do a deal soup to nuts from acquisition to underwriting, to on-site property inspection and meetings with clinic staff, along with the town zoning board officials. I had to put a team together: broker, lender, legal, and they did not always see eye to eye. I've learned a lot through this process.