Hanley Investment Group Sells Portfolio of Four Single-Tenant Properties Leased to Fresenius Kidney Care for $9.8 Million in Indiana and Texas

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MARKETWATCH

INDIANA & TEXAS – Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has arranged the sale of four properties that will remain occupied under lease by single-tenant Fresenius Kidney Care, the dialysis services division of Fresenius Medical Care North America and the nation’s leading network of dialysis facilities. The four properties are located in Auburn, Fort Wayne and Marion, Indiana and Dayton, Texas and sold for a combined consideration of $9.8 million, representing 99% of the original asking prices. 

Hanley Investment Group’s Executive Vice Presidents Bill Asher and Jeff Lefko, and President Ed Hanley, in conjunction with ParaSell, Inc., represented the seller in the four separate transactions, a private partnership based in the Midwest. These transactions do not impact the operations of Fresenius Kidney Care, which had recently negotiated lease extension at all four properties before the sale.

Brian Appel, founder and managing partner of Appel & Henick, LLP in Los Angeles, handled legal affairs on behalf of the seller for the four sales transactions and negotiated lease extensions for the three Indiana properties prior to formally going to market for sale. Appel helped structure the most favorable lease extension terms that put each property in the best possible position to maximize value upon sale.

“Hanley Investment Group did an outstanding job executing four separate sales and achieving 99% of the total original asking price for all four net-leased assets,” said Appel. “Hanley facilitated a very efficient sales process over approximately four months from start to finish, that exceeded the seller’s expectations.”

In Auburn, Indiana, Hanley Investment Group arranged the sale of a 7,176-square-foot single-tenant net-leased investment occupied by Fresenius Kidney Care at 1144 W. 15th Street in DeKalb County, located 20 miles north of Fort Wayne in northeast Indiana. Built in 2002 on 1.80 acres, the medical care center is located adjacent to a Walmart Supercenter in the heart of the Auburn retail corridor and approximately 2.5 miles from Parkview DeKalb Hospital, a 56-bed state-of-the-art facility. Fresenius has operated at the location since 2003. The buyer, a private investor based in St. Louis, Missouri, was represented by Vince Vatterott and Michael Kocur at Westwood Net Lease Advisors of St. Louis, Missouri.

In Fort Wayne, Indiana, Hanley Investment Group arranged the sale of a 7,580-square-foot single-tenant net-leased investment occupied by Fresenius Kidney Care at 10204 E. Dupont Circle Drive in Allen County, in northeast Indiana. Built in 2001 on 1.59 acres, the medical care center is located near two major hospitals, Dupont Hospital and Medical Park, a 131-bed acute care facility and medical office business park located adjacent to the property, and Parkview Regional Medical Center, a 712-bed facility located just one mile from Fresenius. Fresenius has operated at the location since 2002. The buyer, an institutional group from Marin County, California, was represented by Daniel Barnes of Lee & Associates of St. Louis, Missouri.

In Marion, Indiana, Hanley Investment Group arranged the sale of a 9,300-square-foot single-tenant net-leased investment occupied by Fresenius Kidney Care at 1797 W. Kem Road in Grant County, in
northeast Indiana. Built in 1998 on 1.50 acres, the property is located four miles from Marion General Hospital, a non-profit 99-bed acute care facility and healthcare organization. Fresenius has operated at the location since 1998. The buyer, a private investor based in the Denver metro area, was represented by Brad Canova with Horvath & Tremblay in Boston. 

In Dayton, Texas, Hanley Investment Group arranged the sale of a new construction, 5,931-square-foot single-tenant net-leased investment occupied by Fresenius Kidney Care at 1003 N. Cleveland Street in Liberty County, 35 miles northeast of Houston. Built in 2018 on 2.14 acres, Fresenius had approximately 13 years remaining on an original 15-year lease. The buyer, a private investor from Santa Cruz County, California, was represented by Chris Shoemaker with Shoemaker Commercial Real Estate of Capitola, California.

Hanley Investment Group generated a total of 36 offers including 12 offers in the first week of marketing the Fresenius location in Dayton, Texas.

“The market showed an overwhelming demand for these types of net-leased assets, after a challenging year due to Covid-19,” said Asher.

“The depth of the buyer pool for net-leased dialysis centers was as ample as we’ve seen compared to any other single-tenant triple-net lease investment during the entire pandemic. A combination of each price point being less than $3 million, the asking cap rates at a 6.0% cap or higher, and absolute net leases, attracted multiple offers in a short period of time,” Asher continues. “We created such a competitive bidding environment on Dayton that we negotiated and secured a buyer at 25 basis point better than list price, a two-week contingency period and a closing in less than 30 days.”

Asher notes that medical services are widely regarded as the most stable product type in the face of growing online sales and economic instability. “Furthermore, as the baby boomer generation, born between 1946 and 1964, reaches retirement age, the need for age-related health care services will continue to rise. The number of baby boomers is estimated to be about 73 million people with roughly 10,000 people per day turning 65 until 2030, which will continue to make medical care centers like Fresenius in high demand – from both patients and investors,” Asher added.

Fresenius Medical Care North America (FMCNA) is the premier healthcare company focused on providing the highest quality care to people with renal and other chronic conditions. Through its industry-leading network of dialysis facilities and outpatient cardiac and vascular labs, Fresenius Medical Care North America provides coordinated healthcare services at pivotal care points for hundreds of thousands of chronically ill customers throughout the continent. As the world’s largest fully integrated renal company, it offers specialty pharmacy and laboratory services, and manufactures and distributes the most comprehensive line of dialysis equipment, disposable products, and renal pharmaceuticals.

“We expect the market to remain hot for single-tenant net-leased investments occupied by dialysis centers like Fresenius, with anticipated future cap rate compression in 2021,” said Asher.