Lehigh Valley Health Network - Bath, PA

Premier Health System Operator: On August 1st, 2024, Lehigh Valley Health Network completed its merger with Jefferson Health, forming a major regional academic health system serving Pennsylvania and New Jersey, creating a system with 32 hospitals, over 700 care sites, and approximately 62,000 employees.
Investment Grade Credit Backed Lease: The lease is backed by a full corporate guarantee from Lehigh Valley Health Network, Inc., a Pennsylvania non-profit corporation. Lehigh Valley Health Network is part of Jefferson Health (S&P: A).
Absolute Net Lease Structure: The agreement is an absolute net lease where the Tenant is responsible for all operating expenses and is responsible for reimbursing capital expenditures on an amortized basis.
Long-Term Lease: The property features a fifteen (15) year initial term with over 14 years remaining, providing long-term stability and cash flow.
Attractive Rent Growth: The lease includes 2.5% annual rental escalations throughout the lease term, offering investors consistent rent growth and a great hedge against inflation.
Direct Expense Management: The Tenant manages and pays for all operating expenses directly, including real estate taxes, insurance, and utilities.
Capital Expenditure Reimbursement: While Landlord funds or reimburses Capital Replacements, the Tenant is required to pay back the amortized cost at SOFR plus 250 basis points as Additional Rent.
Strong MSA Demographics: The facility is within the thriving Allentown-Bethlehem-Easton MSA, which supports a massive regional population of over 886,000 residents. As a key medical asset in the Lehigh Valley, it directly serves a mature demographic where nearly 19% of the population is aged 65 years or older.
Favorable Depreciation: This opportunity offers investors the ability to capture more favorable depreciation and tax savings advantages through a cost segregation study. *Investors to confirm with their own CPA.

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Kyle Matthews