Challenge

This property is located in Mesa, AZ, the largest suburban city by population in the United States. Dental properties are highly sought-after investments for their insulation from e-commerce competition and resistance to economic downturns. Further, dentistry is one of the largest healthcare industries and has grown by an average of 2.4% annually. By combining these factors, this property is a prime investment opportunity.

The seller was a private client looking to capitalize on the value of current real estate conditions after recently purchasing the property in February 2020 for $850,000 and aimed for a closing date at the beginning of March 2021. Their goal was to complete a sale leaseback transaction with their business and real estate.

Strategy

Within the first two weeks of marketing the property, the Matthews™ deal team sourced multiple offers and quickly moved to open escrow with a qualified buyer. However, the appraisal came in below the asking price, and the buyer backed out of the deal. The Matthews™ representatives worked closely with the seller, and through Matthews™ proprietary marketing, sourced another round of offers. The second buyer was an exchange buyer who was able to close all-cash on March 3^rd, following the seller’s closing contingencies.

Results

This absolute NNN lease provided the buyer with a very passive investment vehicle. The lease featured 10% rental increases every five years, providing the buyer with a strong hedge against inflation. Dental Innovations would also be executing a 10-year NNN lease upon closing through a sale leaseback, showing the seller’s  commitment to the location. By utilizing Matthews™, the seller profited $950,000 from the sale in just one year.