Lehigh Valley Health Network

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.
Mission-Critical Medical Facility: The site is specifically used as a Permitted Facility for medical offices, including surgical, clinical, and diagnostic testing services.
Large Strategic Land Parcel: The offering includes a 5.58-acre site with prime positioning at 1000 Alliance Drive and frontage along the S.R. 3026 Airport Beltway.
Strong MSA Demographics: The facility is located within the larger Wilkes-Barre-Hazleton MSA, which encompasses a population of 574,000 people, with roughly 20% of the population being 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