Mercy Clinic Primary Care Ground Lease
Office | 5.00% CAP | 6,267 SqFt
Marketing description
Porthaven Partners, is pleased to present the opportunity to acquire a long-term, absolute NNN ground lease investment occupied by Mercy Health Fort Smith Communities, located in Fort Smith, Arkansas.
The property consists of a 6,267 square foot primary care clinic situated on approximately 0.97 acres. Mercy has occupied the site since 2020 and is committed through February 2050, with nearly 24 years of remaining lease term and four (4) five-year renewal options. The lease features 2.0% annual rental increases and is structured as an absolute NNN ground lease, providing passive ownership with no landlord responsibilities.
The asset operates as a mission-critical outpatient facility within Mercy's Fort Smith network and is directly integrated with Mercy Hospital Fort Smith, the region's primary acute care provider serving western Arkansas and eastern Oklahoma.
Mercy has demonstrated a significant long-term commitment to the Fort Smith market through a recently completed $186 million hospital expansion, including a 162,000-square-foot addition that expanded emergency and critical care capacity and increased patient capacity. In addition, Mercy is developing a new 40,000-square-foot cancer center, further expanding specialty care services and strengthening long-term patient demand within the region.
As part of Mercy's integrated care model, the subject property functions as a key feeder clinic, supporting patient acquisition, continuity of care, and referrals to the hospital and specialty services.
This offering provides investors with the opportunity to acquire a long-term, healthcare-oriented net lease investment with a low rent and operated by a dominant regional operator actively investing in the market, featuring stable cash flow, contractual rent growth, and a passive ownership structure.
Investment highlights
- Long-Term Absolute NNN Ground Lease (±24 Years Remaining) - Mercy Health operates under a long-term ground lease with approximately 24 years remaining and zero landlord responsibilities, providing durable, passive income.
- Annual Rent Growth - 2.0% Increases - Contractual 2.0% annual rent escalations provide consistent NOI growth and an embedded hedge against inflation.
- Dominant Regional Health System - Mercy - Operated by Mercy Health Fort Smith Communities, part of one of the largest nonprofit healthcare systems in the U.S., with 40+ hospitals and 800+ outpatient facilities.
- Direct Affiliation with Mercy Hospital Fort Smith - $185M Expansion - The property is integrated within Mercy's Fort Smith healthcare network and benefits from proximity to Mercy Hospital Fort Smith, which recently completed a $185 million expansion, significantly increasing patient capacity and reinforcing long-term system investment in the market. Mercy is also developing a new 40,000 SF cancer center, expanding oncology services and increasing long-term patient capture within the region.
- Mission-Critical Healthcare Facility - 6,267 SF primary care clinic serving as a key outpatient node within Mercy's Fort Smith network, supporting patient referrals and ongoing care. Operated by a dominant regional health system actively investing over $225 million in the Fort Smith market, the asset benefits from long-term demand drivers, expanding patient capacity, and mission-critical integration within Mercy's healthcare network.
- Recession-Resistant Healthcare Use - Primary care services are non-discretionary, supporting stable occupancy and long-term tenant commitment.
- Located in a Regional Economic & Medical Hub - Fort Smith is the third-largest city in Arkansas (~90,000 population; ~280,000 MSA) and serves as a key healthcare, manufacturing, and logistics hub for western Arkansas and eastern Oklahoma.
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