Analysis of Investments

Healthcare Portfolio 2

Inland

Inland Healthcare Portfolio 2 is an investment three medical office buildings located in three different states. 

Investment Highlights

  • Yr. 1 Cash-on-Cash 5.00%
  • Initial Occupancy 100.00%
  • Est. Time Horizon 10 years YEARS
  • Current Cash Flow
  • Yr. 1 Cap Rate to Investor 5.16%
  • Investor Purchase Price $54,858,510
  • Total Offering Size $54,858,510

Loan Information

N/A

  • Yr. 1 DSCR None
  • Loan-to-Offering 0.00%
  • Hold Period DSCR None

Tenant Information & Lease Terms

There are a total of three properties each with a different tenant. 

Memorial Hermann Health System: The operator at the Texas property. This tenant is investment grade with a rating of A1 form Moody's and has 5,500 physicians and 24,000 employees.

Jordan Valley Medical Center LP - The operator of the Utah property. A wholly owned subsidiary of IASIS Healthcare Holdings which has a non-investment grade credit rating of B2 from Moody's.

Rex Radiation Oncology, LLC which has Rex Hospital as guarantor. They have an investment grade credit rating of AA- from Standard and Poor's and A2 from Moody's.

Key Positives

  • The lease term remaining on the investment has an average term of 14.5 years.

  • There are annual rent escalations that are scheduled in the leases.

  • The population numbers surrounding the properties are strong.

  • There is no risk of foreclosure on the properties due to the investment being All-Cash.

  • The properties were built in 2012, 2016, and 2017 which decreases the chance that the trust will need to use funds to maintain the property.

Key Risks to Consider

  • The tenant that is operating out of the Utah property does not have a guarantor on the lease which increases the risk of default on their lease payments.

  • The cap rate to investors is low (5.16%). However, because there is no loan on the property, the trust can wait to sell the property until they may exit at a point that they feel will maximize value.

Investment Sponsor Information

Inland

The Inland Real Estate Group of Companies, Inc. ("Inland"), is an industry leader and one of the nation's largest commercial real estate and finance organizations. As a business incubator, we specialize in creating, developing and supporting Inland member companies that provide commercial real estate-related services and alternative investment funds, including limited partnerships, institutional funds and non-listed and listed REITs.

  PAST Investments