Lehigh Valley Health Network Portfolio

High Caliber Operator: On August 1st, 2024, Lehigh Valley Health Network completed its merger with Jefferson Health (S&P: A), 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.
Strong Corporate Guarantee: Each lease is backed by a full corporate guarantee from Lehigh Valley Health Network, Inc., a Pennsylvania non-profit corporation that was acquired by Jefferson Health (S&P: A).
Absolute Net Lease Structure: The lease agreements are absolute NNN with the tenant responsible for all operating expenses and reimbursing for amortized capital costs.
Long-Term Commitment: All the properties except for the St. Clair location feature a fifteen (15) year initial term with over 14 years remaining, providing long-term stability and cash flow across the portfolio.
Attractive Rent Growth: The leases include 2.5% annual rental escalations throughout the lease term, offering investors consistent rent growth and a great hedge against inflation.
Mission-Critical Medical Facilities: Some of the sites are specifically used as Permitted Facilities for medical offices, including surgical, clinical, and diagnostic testing services.
Strong MSA Demographics: The portfolio is located across multiple established Pennsylvania MSAs and secondary markets that collectively serve large and stable population bases. These markets benefit from above average concentrations of residents aged 65 and older, supporting sustained demand for outpatient medical services and reinforcing long term healthcare utilization trends across the portfolio.
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.
Portfolio Diversification: The portfolio is comprised of multiple outpatient medical locations across different markets and specialties, reducing reliance on any single site, provider, or service line.

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Kyle Matthews