CRITTENDEN COMMUNITY HOSPITAL PORTFOLIO

INVESTMENT HIGHLIGHTS

• HIGH CALIBER OPERATOR: RHG’s management team has over 30 years of experience in the rural hospital market, on average. Prior to founding RHG, from 2007 to 2012, the management team built a system of 12 critical access hospitals, employed approximately 900 staff, and generated net patient revenues exceeding $90 million annually.
• CREDIT-ENHANCED LEASE: The master lease features a corporate guarantee from Rural Hospital Group. Investors can review unit-level and corporate financials with an executed NDA.
• ZERO LANDLORD RESPONSIBILITY: The master lease will incorporate an absolute NNN reimbursement structure, ensuring that the future landlord will have zero responsibilities, making this an ideal investment for both local and out-of-state investors.
• LONG-TERM, INFLATION-HEDGED LEASE STRUCTURE: The operator will execute a 20-year lease with 3% annual escalators, which will serve as a
  strong hedge against inflation.
• RECENT IMPROVEMENTS: In 2022, ownership invested approximately $1.5 million in renovations to the hospital, demonstrating their financial commitment to this location and confidence in its future success.
• IMMEDIATE SCALE: The portfolio provides an opportunity for an investor to achieve immediate scale with a two-property, three-building portfolio totaling 85,522 square feet.
• FEDERAL & STATE GOVERNMENT SUPPORT: In December 2020, Congress introduced the Rural Emergency Hospital (REH) designation under Section 125 of the Consolidated Appropriations Act of 2021, to combat the loss of critical healthcare services in rural communities. As a result, the subject property receives enhanced Medicare reimbursements in addition to a monthly supplemental payment of roughly $275,000. Separately, the property receives a quarterly Medicaid payment of roughly $600,000 through Kentucky’s Hospital Rate Improvement Program (HRIP), a directed payment program that allows Kentucky Medicaid to make enhanced payments to providers through managed care organizations to advance the goals of the Medicaid program.
• FAVORABLE MEDICAID ENVIRONMENT: Kentucky is one of the states that expanded Medicaid under the Affordable Care Act. This expansion allowed for a significant increase in coverage for low-income adults, particularly those earning up to 138% of the federal poverty level (FPL). Since the expansion, Medicaid enrollment in Kentucky has grown substantially, providing coverage for hundreds of thousands of people who previously did not qualify.
• MARKET RENT: The portfolio features a master lease rent of $12.16 per square foot which is in line with market and thus ensures an investor will have a replaceable rent.