Dialysis Center Sells in Investment Sale for $2.1 Million

Gary Connely of Gilbert, AZ purchased the Fresenius Medical Care at 1430 W Valencia Road in Midvale Park, Tucson as an investment for $2.1 million ($221 PSF) from builder, 1400 W Valencia, LLC (Walter Hoge, manager) of Tucson. The 9,500-square-foot building was constructed in 2007 and leased to Fresenius Medical Care, a dialysis center several years later. The property was not on the market when buyer approached seller. Rick Kleiner of Cushman & Wakefield | Picor had leased the building to the tenant 4-5 years earlier.

Investors like the small price point and the fact that kidney dialysis is a growth industry. Investors take security from the tenant’s investment in the build out of the property and the installation of specialty trade fixtures that make it less likely for the tenant to leave at the end of the lease term. The very nature of the business means that a steady and growing routine amongst its clients develops over time providing a reliable income stream tied to an often visited location.

Due to America’s heightened obesity – over 133,000,000 Americans are considered overweight – and aging population, the occurrence of diabetes is increasing. As diabetes leads to roughly 44% of kidney failures, the need for medical facilities offering dialysis will continue to grow. Typically, Patients require three dialysis procedures per week, each procedure taking 3-4 hours. Though a bit morbid, the reality is that dialysis centers can depend upon customers visiting frequently each week and an inelastic demand for their services. The medical industry as a whole is poised for future growth and net lease investors are only logical in recognizing the stability this lends.

Rick Kleiner of Cushman & Wakefield | Picor represented the seller in the transaction and Jeril Benedict with Keller Williams Legacy One of Chandler, AZ represented the investor.

For more information Kleiner can be reached at (520) 546.2745; Benedict should be reached at (480) 444.7200.

Login for more information. [mepr-show rules=”58038″]Sale date: 7/29/2014. Down payment: $1,863,513 with seller financing for the balance. Property was not on the market and closed in 30 days. Property sold at a 7.5% cap rate.[/mepr-show]