FAQs

Assuming that the asset receives maximum exposure through a credible brokerage representative, net leased property's trade much like any commoditized asset. In other words, the property will trade relative to other recent comparable sales.

Considering that a net leased property's future value of cash flows is easily quantifiable, the present value is more transparent; therefore, these assets are significantly more stabilized relative to other types of real estate investments.

While net-lease structures are now considered the industry norm throughout the dialysis industry as well as the overarching single tenant real estate market, investors compare an individual facility’s value to others in the marketplace by deriving value from two prominent variables: (i) the property's lease terms, and (ii) the property's physical & geographical attributes. 

For more information, please see the additional FAQ answers below.

With some exceptions, the parameters of each dialysis clinic’s lease predominately represent the differences in cap rate values throughout the country. These factors include:

• The number of lease years remaining in the primary term; 

• The creditworthiness of the Lessee and/or Guarantor; and

• The presence & type of rental rate escalations in both the primary & option term periods.

As noted above, physical aspects of the property are generally less heavily weighted in comparison to the provisions found in each clinic’s respective lease; however, some institutional investors require the presence of specific geographical metrics in order to recognize the clinic as a viable acquisition opportunity.  These factors include:

• Population & income demographics within a 3-mile radius of the facility;

• Proximity to the nearest hospital or referring medical center; and,

• The clinic’s original construction date and/or renovation date.

We’ve created database of over 6,000 ESRD facilities across the US which allows us to verify sales, identify qualified buyers, and price each asset at the proper cap rate to maximize exposure.

We are the only firm in the nation that exclusively specializes in this specific real estate sector. By creating an auction-like market environment, we incentivize competition between each prospective buyer to drive demand.

Net Operating Income (or "NOI") is the annual income a Landlord receives from the property after expenses, but before taxes and debt service. Considering that a net leased property has very minimal to zero expenses, the Net Operating Income is usually equal to the Tenant's annual Base Rent payments.

A Capitalization Rate, often referred to as "Cap Rate," is a ratio formula used to identify a property's value. Considered to be the most fundamental metric of net leased real estate transactions, it consists of the following equation: (Net Operating Income ÷ Purchase Price) = Cap Rate. For example, if a property's current NOI is $100,000, and it sold for $2,000,000, then the Cap Rate would be equal to 5.00%.

The nomenclature of Net & Triple Net, are both used loosely within the industry. As a general rule, in order for a lease to be considered "net," it must require the Tenant to pay for the three major expense categories: (1) Taxes; (2) Utilities; and (3) Insurance.

 In contrast, a true Triple Net lease (otherwise known as an "Absolute Net" lease) means that the Tenant is obligated to pay for ALL expenses. This is inclusive of capital expenditures such as HVAC, Roof, and Parking Lot replacement. True triple net leases are seen as highly attractive to the real estate investment community; and therefore, usually sell at higher prices.