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Category: Case Study, Healthcare Tags: Healthcare
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Property Profile

$4,975,000
SIH Urgent Care Work Care - Marion, IL
Cap Rate
5.34%
Leasable Area
6,400 sq. ft.
Year Built
2018
Term Remaining
±19 Years
NOI
$265,732

Challenge
The subject property is a brand new, high-quality construction urgent care that was a build-to-suit development for Southern Illinois Hospitals (SIH). The property is located in a tertiary market near a vacant mall but was well-positioned within the community in a strong retail corridor. Being outparceled to a Walmart Supercenter, the building was perfectly positioned for traffic and visibility. The selling entity on the transaction was a development company with equity partners looking to achieve record pricing on a sale. Matthews™ was presented with the challenge to market an asset at a 5.00% cap rate in a non-core market with unorthodox real estate fundamentals. The rental rate was almost triple what retail rents called for in the area ($41.52/SF), and the asking price per square foot was astronomically high for a non-specialty urgent care at $830/SF. With institutional buyers out of the buyer pool for this specific asset, we needed to target private 1031 capital and secure aggressive pricing in a low-density market. Only 1,866 people reside within a 3-mile radius of the subject asset.

Strategy
Matthews™ utilized an aggressive marketing campaign to source a buyer for the property by sending out blasts to our internal database of brokers, investors, developers, syndicators, etc. The Matthews™ Healthcare Division highlighted the strong points of the deal, including the superior AA- Fitch rating, strong rental increases, and absolute NNN lease for 20 years. The buyer was intrigued and also eager to find a property, given that he had a few days left in his identification period. The buyer, an investor/developer out of Illinois, admired that the superior credit guaranteed a stable, secure, and high-growth investment and closed on the property quickly after going under contract.

Results
Both the buyer and the seller were pleased with the results. Matthews™ achieved the highest price per square foot ever recorded in Marion, IL, at $777/SF. The seller was able to achieve outstanding pricing, and the buyer was able to defer capital gains taxes and invest his money into a safe, long-term, and high income-growth investment.

Testimonial
“Our experience with Rahul Chhajed, Alex Harrold, and Michael Moreno of Matthews Real Estate Investment Services was the most professional real estate transaction our company has experienced. These brokers are aggressive, professional, and the most thorough brokers we have worked with n the sale of our properties. We look forward to working with them now and in the future.”

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