INVESTMENT HIGHLIGHTS
Long-Term NNN Leases
Both Properties feature long-term NNN leases, providing an investor with long-term, passive cash flow. The 1211 Cushman Street property features 8 years of lease term remaining, plus an option to extend at a Landlord provided Renewal Rate. The 819 1st Avenue property features 6 years of lease term remaining, plus an option to extend at a Landlord provided Renewal Rate.
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 properties offer an investor a 10.21% cash-on-cash return in the first year of ownership and a 13.78% return on equity. 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.
NO UROLOGY COMPETITION / LONG-TERM STABILITY
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. In addition, 1211 Cushman St. was the only location large enough within Fairbanks for the practice to expand into when it had outgrown 819 1st Ave. Now, with patient facing operations at 1211 Cushman St. and administrative operations at 819 1st Ave, Fairbanks Urology has the ideal amount of space, ensuring both properties will stay leased for the long-term.
Strong Tenant - Strong Tenant - 60% Integrated Oncology Network / 40% Founding Physician Owned
The Tenant is Denali United, LLC dba Fairbanks Urology which is owned 60% by Integrated Oncology Network and 40% by the founding physician of Fairbanks Urology, Dr. Tony Nimeh. Integrated Oncology Network is backed by private equity firm Silver Oak Service Partners, which manages $1.1B in investments.
1211 Cushman St. $3.85M+ Property Renovation in 2022
In 2022, the 1211 Cushman Street property underwent a more than $3.85M property renovation bringing the facility up to be a top-of-the-line medical clinic. The extensive renovation included plumbing and mechanical systems, electrical systems, exterior siding, exterior/interior paint, interior ceilings, exterior/interior signage, exam/procedure room upgrades, insulation, hardware throughout, and additional items.
819 1ST AVE PROPERTY RENOVATION IN 2020
In 2020, the 819 1st Ave. 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.
STRONG RENT GROWTH (9.4%), LOW VACANY (2.0%), AND HIGH BARRIER-TO -ENTRY MARKET
Fairbanks office market rents have increased 9.4% over the past three years, per CoStar. The Fairbanks office market vacancy rate is currently 2.0%, well below the national office vacancy rate of 13.7%. 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
