We’re back in the medical office space, and this time, we’re heading to Cherry Hill, NJ.
This will be our second medical office acquisition, and it follows the same playbook that’s worked well for us before: a well-located, undervalued building with a strong lease structure and a clear path to a near-term refinance exit.
Here’s a snapshot of the opportunity:
- Property: A professional office building in Cherry Hill’s high-income trade area, with a healthcare tenant already lined up
- Total project basis: $1,165,900 (includes renovation and closing costs)
- Lease: Triple Net (NNN), the tenant covers taxes, insurance, and maintenance, with a 4% annual rent escalation built in
- Going-in cap rate: 11.2%, a strong entry point relative to the broader market
- Leverage: Conservative bank financing at roughly 65% LTV, with a 2.34x debt service coverage ratio, well above lender minimums
- Investor return: Targeted 10% preferred return, paid monthly (~$4,166/month on a $500K raise)
- Upside: Investors also participate in 10% of refinance proceeds above principal
- Projected IRR: 12%
- Hold period: ~24 months, with the property expected to appraise at approximately $1.8M after the new tenant is in place, generating a refinance exit that returns full investor capital plus upside return
- Minimum investment: $50,000
We’re still finalizing the details, but wanted to give our investor community a first look before we open this up more broadly.
If a medical office deal like this sounds interesting to you, hit reply or grab time on my calendar, I’d love to walk you through the full pro forma and answer any questions.
This opportunity is for accredited investors only. All projections are estimates based on current assumptions and subject to change.
Have a great week.