Overview
Matthews™ is pleased to present the opportunity to acquire a ±14,370 square foot multi tenant medical office building located at 11540 E University Dr, Apache Junction, Arizona. The property is anchored by Fresenius Kidney Care (S&P:BBB), which occupies approximately 80% of the building on a NNN lease with term through May 31, 2031. The asset offers investors a combination of stable in-place income and near-term upside through lease up of the remaining vacancy.
Fresenius Kidney Care operates as part of Fresenius Medical Care, one of the largest dialysis providers in the world with thousands of treatment centers globally. Fresenius Medical Care maintains investment grade credit ratings and is a publicly traded healthcare company with significant scale, operational infrastructure, and long term presence in the dialysis sector. Dialysis treatment is an essential, recurring medical service, which supports consistent patient demand and durable tenancy in outpatient locations such as this.
The remaining 20 percent of the building consists of two vacant medical suites, creating a clear value add component for investors looking for upside. The existing layout and medical infrastructure provide an opportunity to backfill with complementary medical tenants, potentially increasing NOI and lowering the overall basis upon stabilization.
Constructed in 2005 on approximately 2.78 acres, the property benefits from a functional medical layout, strong visibility along East University Drive, and ample surface parking. The site serves the growing Apache Junction community, located approximately 35 miles east of Phoenix within the expanding East Valley corridor. The area continues to experience population growth driven by affordability relative to Phoenix, strong senior demographics, and increasing healthcare demand.
This offering presents the opportunity to acquire a medical asset anchored by a nationally recognized dialysis operator with institutional scale, while also providing near term upside through lease up of the remaining suites.
Investment Highlights
- Medicare Spends $55 Billion on Dialysis Annually: Medicare, the primary payer for dialysis services in the United States, spends approximately $55 billion annually on end stage renal disease care. The vast majority of this spending is attributable to recurring dialysis treatments. This substantial federal reimbursement commitment underscores the essential nature of dialysis services and provides a durable reimbursement backdrop for operators.
- Large and Growing Dialysis Patient Population: More than 800,000 Americans are living with end stage renal disease, with over 500,000 patients receiving ongoing dialysis treatment each year. Dialysis is a life sustaining therapy that typically requires treatment multiple times per week, creating consistent, recurring demand for outpatient dialysis centers.
- Largest Global Dialysis Provider with Investment Grade Profile: Fresenius Kidney Care operates as part of Fresenius Medical Care, the largest dialysis provider in the world, with thousands of treatment centers and a substantial U.S. presence. The company is publicly traded and maintains investment grade credit ratings from major agencies, reflecting significant scale, diversified revenue streams, and institutional operating infrastructure. The strength of the broader Fresenius platform enhances the overall credit profile behind the tenancy and supports long term operational stability.
- Arizona’s Aging Demographics Support Long Term Demand: Arizona continues to experience strong population growth, particularly among residents aged 65 and older. Apache Junction specifically has a median age of approximately 52 years, with roughly 33% of residents aged 65+, significantly above national averages. Seniors represent the highest risk demographic for kidney failure and dialysis dependency. As Arizona’s senior population expands, long term demand for outpatient dialysis services is expected to remain stable and grow, supporting durable occupancy for facilities such as the subject property.
- Growing Phoenix East Valley Corridor: Located approximately 35 miles east of Downtown Phoenix, Apache Junction is positioned within the rapidly expanding East Valley, one of the most active growth corridors in the Phoenix MSA. The region continues to benefit from inbound migration, residential development, and employment expansion as residents seek affordability and suburban accessibility. As population density increases in these outer Phoenix submarkets, demand for neighborhood based outpatient medical services continues to rise, supporting long term healthcare tenancy in well located community facilities such as the subject property.
- Clear Value Add Opportunity: Approximately 20% of the building is currently vacant, comprised of two medical suites. Investors have the opportunity to lease the remaining space to complementary medical users and increase NOI, enhancing overall yield and lowering basis upon stabilization.
- Scheduled 2% Annual Rent Increases: The Fresenius lease features 2% annual rental increases, providing built in NOI growth throughout the remaining lease term and natural yield compression over time without relying on lease up assumptions.
- NNN Lease Structure with Limited Landlord Responsibilities: Fresenius occupies approximately 80% of the building pursuant to a NNN lease, providing a landlord friendly structure with predictable base rental income. Under the lease, the tenant is responsible for their proportional share of real estate taxes, insurance, and common area maintenance expenses, reducing ownership oversight and operating exposure. The majority of the building is secured by a nationally recognized dialysis operator under a NNN format, offering investors a stable and relatively passive income stream.
- Owner Operator Opportunity: The two remaining vacant suites total approximately 2,800 square feet—offering an ideal opportunity for an owner-operator to acquire the asset and occupy the remaining space with their own business while benefiting from existing cash flow. Located in Apache Junction within the strong and growing Phoenix-Mesa-Scottsdale MSA, the property enjoys solid submarket fundamentals and access to a consistent and expanding customer base.
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