VA Outpatient Clinic
Office | 7.25% CAP | 14,801 SqFt
Marketing description
Newmark, on behalf of Ownership, is pleased to present qualified investors with the opportunity to acquire a newly constructed, purpose-built medical outpatient clinic leased by the U.S. Department of Veterans Affairs ("VA") in Indiana, Pennsylvania (the "Property"). The Property is a single-story, 14,801 NUSF Community-Based Outpatient Clinic ("CBOC") built to VA specifications under a fifteen (15) year lease with a ten (10) year firm term and a five (5) year soft term, with lease commencement in July 2025. The lease features contractual 7.25% shell rent escalations every five years and annual 1.85% increases to operating cost reimbursements. The facility serves as a primary care hub for the James E. Van Zandt VA Medical Center, providing comprehensive outpatient services to veterans across Indiana County and the surrounding region, including PACT team primary care, mental health, audiology, women's health, eye care, physical therapy, laboratory services, and telehealth capabilities.
Investment highlights
- PURPOSE-BUILT VA MEDICAL FACILITY - The Property is a newly constructed, 14,801 NUSF Community Based Outpatient Clinic ("CBOC") purpose-built to VA specifications, serving as a primary care hub for the James E. Van Zandt VA Medical Center. The facility delivers comprehensive outpatient services including PACT team primary care, mental health, audiology, women's health, eye care, physical therapy, laboratory, and telehealth capabilities - all designed to the VA's latest EHRM Design Guide standards.
- INVESTMENT-GRADE CREDIT & FUNDING RESILIENCE - The lease is guaranteed by the full faith and credit of the United States government (AA+, S&P). The VA is the second-largest federal agency by budget with over $400 billion in annual funding and overwhelming bipartisan support - the FY2026 VA funding bill passed the U.S. Senate 87-9. VA medical care is funded through advance appropriations one full year ahead, ensuring lease obligations continue uninterrupted even during government shutdowns. During the 43-day federal shutdown in late 2025, 97% of VA employees continued working and all medical facilities remained fully operational.
- CONTRACTUAL RENT GROWTH & INFLATION PROTECTION - The lease features contractual 7.25% shell rent increases every five years and annual 1.85% escalations to operating cost reimbursements, providing predictable income growth throughout the 15-year term. Additionally, the VA is contractually obligated to pay for all expenses related to janitorial (contract and supplies), further reducing Landlord's exposure to NOI deterioration.
- NEW CONSTRUCTION & SIGNIFICANT TENANT INVESTMENT - The Property was purpose-built to the VA's detailed clinical specifications, featuring ~$4.8 million in tenant improvements. New construction eliminates deferred maintenance risk, with capital items - including the roof, HVAC, and building systems - remaining under manufacturer warranty. The VA's substantial buildout investment and the specialized nature of the clinical space underscore the Tenant's long-term commitment and significantly reduce vacancy risk.
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