INVESTMENT HIGHLIGHTS
5+ Year NNN Lease
There are over 5 years remaining on a 10-year NNN lease, plus an option to extend at a Landlord provided Renewal Rate, providing an investor with long-term, passive cash flow.
3% Annual Rent Increases
Both leases feature rare 3% annual rent increases during their lease terms, providing an investor with compounded NOI growth and a strong hedge against inflation.
High-Yield Investment
With available loan programs at up to 70% LTV and interest rate at 7.00%, the property offers an investor a 11.37% cash-on-cash return in the first year of ownership and a 14.94% return on equity. Coupled with 3% annual rent increases, an investor’s return will continue to grow throughout their ownership.
Minimal Landlord Responsibilities
Both Properties operate on NNN leases, featuring very minimal Landlord management or repair responsibilities. The Landlord is only responsible for Capital Expenditures for the roof, foundation, parking lot & structure.
Recent Property Renovations
In 2020 the property underwent a $300,000+ property renovation which included replacing all windows, full exterior/interior paint, new flooring, new door frames and baseboards, and staircase refinishing.
No Urology Competition
Fairbanks Urology is the only urology practice in Fairbanks and within 600 miles, providing vital services to all of central and northern Alaska, and ensuring long-term stability for an investor. The Fairbanks Urology practice operates out of two buildings, with the subject property housing the Fairbanks Urology’s administrative operations.
Strong Tenant Backing - 80% Cardinal Health (2024 Revenue $226.8B) / 20% Founding Physician Owned
The Tenant, Fairbanks Urology, LLC, is wholly owned by Denali United, LLC which is owned 80% by Cardinal Health and 20% by the founding physician of Fairbanks Urology, Dr. Tony Nimeh. Cardinal Health is a multinational health conglomerate which generated $226.8B in revenue in 2024.
Strong Rent Growth, Low Vacancy, and High Barrier-To-Entry Market
Fairbanks office market rents have increased annually by an average of 3.2% for the past ten years, per CoStar. The Fairbanks office market vacancy rate is currently 2.0%, well below the national office vacancy rate of 19.8% at the end of 2024. With less than 5.0% office footprint growth in the past decade, no new office building deliveries since 2019, and zero square feet of new office buildings currently under construction, the development lull creates a high barrier-to-entry and demand for space remains high.
Affluent Demographics
The average household income within a 5-mile radius of the Property is in excess of $101,000, well above the national average.
INCOME TAX-FREE STATE
Alaska State is an Income Tax-Free State.
Listing Agents:
CLAYTON J. BROWN
Trevor Lane
425.233.9522
trevor.lane@marcusmillichap.com
