Overview
Matthews Real Estate Investment Services is pleased to present an opportunity to acquire the fee simple interest in a freestanding net lease surgery center and medical office. The property is tenanted by Vision Institute of Michigan, a strong local operator who has been practicing in the area for over 49 years. The site is a 16,709 square foot property located in Sterling Heights, Michigan. Sterling Heights is the second largest suburb of Detroit and the fourth largest city in Michigan. It has been named the safest big city in Michigan for the last 4 years and has also been ranked as the 6th safest city in the country.
The property is composed of a 12,634 SF eyecare office, and a 4,075 SF state of the art surgery center. Surgery Centers in general are very sticky investments because the buildout and regulatory process involved in establishing a surgery center is extensive and time consuming. Michigan specifically has additional barriers to entry because it is a Certificate of Need state, which requires government approval and regulatory review for any new ambulatory surgery centers. The practice’s surgery center, Surgery Center of Michigan, is AAAHC accredited, features 2 ORs, and can be utilized for multiple specialties. In total, the Vision Institute grossed over $11 million dollars of combined revenue between the eyecare practice and surgery center in 2021.
This site is strategically located near two hospitals at the intersection of a major roadway and major Michigan highway, placing it in a high traffic area with great real estate fundamentals. The area is home to the Golden Corridor, a stretch of roadway between M-53 and I-94 designated as “golden” because of its immense economic impact in Macomb County and Metro Detroit. The 5-mile stretch of freeway sees over 100,000 vehicles per day, has over 6 million square feet of commercial space, and attracts $2.6 billion in annual consumer spending.
Vision Institute of Michigan has served the community for nearly 50 years, establishing a dominant market presence. It is ranked as the 2nd highest performing ophthalmology practice in Macomb County, which is the 3rd largest county in the state with over 875,000 people. The site features a long-term net lease with 2% annual rent increases, providing investors with a secure income stream and a hedge against inflation for many years to come.
Investment Highlights
Very Passive Lease Structure
There are minimal landlord responsibilities throughout the lease term, offering a passive investment for both local and national investors.
Stable Long-Term Investment
There are just over 9 years remaining on the lease with 2% annual increases and four (4)- five (5) year options to extend. This will provide the owner with guaranteed stability and revenue growth for nearly the next decade and built in options to extend the lease even farther into the future.
Top Performing Practice
The Vision Institute of Michigan is consistently ranked as one of the top practices for number of procedures by Medicare.
Affluent Area with High Incomes
The asset caters to over 248K residents within a 5-mile radius who boast an average household income of over $93K.
#1 Safest City in Michigan
A suburb of Detroit, Sterling Heights has been ranked #1 safest city in Michigan for four consecutive years.
Limited Competition Due to Certificate of Need (CON)
Michigan is a Certificate of Need (CON) state for surgery centers. This means any surgery center must get approval and certification from the state, showing that the additional care provider is necessary to the area. This limits competition and means that tenants with CONs are more sticky, as a CON can be difficult and time consuming to obtain.
Long-Term Operating History
Founded in 1974, Vision Institute of Michigan has been serving the community for over 49 years. With a team of more than 50 staff members and 6 doctors, VIM provides comprehensive treatment planning by following strict standards and utilizing advanced state-of-the-art technology and procedures.
Multiple Streams of Revenue
Along with optometry care and cataract surgery, VIM provides laser eye surgery, diagnostic imaging, audiology, and oculoplastic procedures.
Robust Growth in Outpatient Surgery
Ambulatory Surgical Centers perform more than half of all US outpatient surgical procedures, and the number of outpatient procedures is estimated to increase 15% by 2028.
Tenant Investment in Location
Surgery Centers rarely relocate due to high cost of build-out, difficulty retaining the same patients in a new location, and the high cost of moving, which provides an extra level of security to a future landlord.
Cost Effective Procedures
The trend to develop outpatient surgical centers is increasing given the cost-effectiveness and convenience for patients. As the cost of healthcare continues to rise and patients look for more affordable options, the demand for outpatient surgery is growing rapidly.
Located in the Golden Corridor
The site is located in “The Golden Corridor”, an area of Sterling Heights known for its substantial economic impact. The area sees over 100,000 vehicles per day, has over 6 million square feet of commercial space, and sees over $2.6 billion in consumer spending.
Growing Healthcare Specialty – 6% Annual Growth - $84B Market
The Ophthalmology industry is expected to grow at over 6% annually from 2023 to 2030. It is projected to be an $84.6B market by 2030. This is a benefit to investors in ophthalmology and eyecare real estate because it suggests the demand for the business located here and the services they provide will be strong for many years to come.
Proximity to Major Hospitals
The property is strategically located in close proximity between the Henry Ford Macomb Hospital and the Beaumont Hospital of Troy.
Retail Corridor with Access to Major Highways
Located just off of the M-53 highway, which boasts vehicle counts of over 59,000 per day at this exit, the area has a strong retail presence. The Lakeside Mall located just down M-59 has recently been revamped by Miami based investment firm Box Ventures. National tenants in the area include Macys, JCPenney, Kohl’s, Target, AT&T, BestBuy, Sam’s Club, Dave & Buster’s, Olive Garden, etc.
Investment Summary
Photo Gallery
Sales Team
