Overview
CBRE’s U.S. Healthcare Capital Markets Group is pleased to exclusively offer the opportunity to acquire the Meritus Health Hagerstown Heart MOB (the “Property”). The fee simple, single-tenant medical office building is 100% leased and occupied by Meritus Health (Fitch ‘A’), western Maryland’s largest health care provider with nearly 3,000 employees, 500 medical staff members, 240 volunteers, serving a patient base of over 200,000.
Meritus Health’s cardiology practice, Hagerstown Heart leases and occupies 100% of the Property. The cardiology practice specializes and treats a variety of cardiac issues including Heart Failure, Coronary Heart Disease, Women’s Heart Disease, Heart Valve Disease, Vascular Disease, Hypertension, among other ailments. The Property features two nuclear cameras, four echocardiogram machines, and an onsite PET (positron emission tomography) scanner - the only cardiology practice in the region with an on-site PET scanner.
In 2022, Hagerstown Heart joined forces with Meritus Health, making significant strides in the region’s cardiovascular care landscape. This strategic merger addressed the increasing demand for healthcare services in Washington County, which boasts the fastest-growing population in Maryland. With a rich history spanning over three and a half decades, the practice has been a cornerstone of medical care in the area. The practice comprises seven physicians and nine dedicated practice members, collectively continuing their commitment to serving the community’s cardiac health needs.
Meritus Health delivers specialized medical care across Western Maryland, Southern Pennsylvania, and the Eastern Panhandle of West Virginia. The health system provides strong support to the Property and tenant by offering access to a large patient population and facilitating specialty referrals within its comprehensive healthcare network.
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Investment Highlights
- NNN Lease Structure - The NNN lease provides investors with limited exposure to operating expenses, and predictable and growing cash flows.
- Scheduled Rent Escalations - The lease offers 2.0% annual rent escalations providing predictable and stable NOI growth throughout the term of the lease.
- Corporate Guaranty - The lease is guaranteed by Meritus Medical Center, Inc which is the sole member of the obligated group of Meritus Health (Fitch ‘A’), the largest healthcare provider in the tri-state region. Fitch’s rating reflect “Meritus’ robust market share in a state with predictable revenue streams under Maryland’s Global Budget Revenue (GBR) reimbursement methodology.”
- Maryland’s Fastest Growing Metropolitan Area - Since 2008, the Hagerstown metropolitan statistical area has been the fastest growing MSA in Maryland, according to data from the U.S. Census Bureau. The MSA is expected to grow by 3.6% over the next five years, which is 3.3x the state average and 1.9x the national average, and the MSA’s 65+ population is expected to grow by 15.4% over the next 4 years, compared to the state average of 14.6% and the national average of 13.5%.
- Strong Referral Network - The physicians and patients alike benefit from being a part of the Meritus Health network, consisting of more than 3,000 employees, 500 medical staff members, 240 volunteers, serving Western Maryland, Southern Pennsylvania and the Eastern Panhandle of West Virginia.
- Proximity to Meritus Medical Center - Hagerstown Heart MOB is just 5 minutes away from the 327-bed Meritus Medical Center, the flagship hospital of Meritus Health and maintains 100% inpatient market share within a 10 mile radius. Meritus Medical Center reported $22.2M in inpatient revenue tied to congestive heart failure cases, ranking among the top 15% of hospitals nationwide.
- High Acuity Facility with State-of-the-Art Equipment - Hagerstown Heart, one of the leading cardiology practices in the country, provides comprehensive care with state-of-the-art equipment at this location that includes two nuclear cameras, four echocardiogram machines, and an onsite PET (positron emission tomography) scanner - the only cardiology practice in the region with an on-site PET scanner.
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