3540 N PINE ISLAND RD Sunrise FL 33351-6637

Marcus & Millichap is pleased to present the fee simple ownership of 3540 North Pine Island Road in Sunrise, Florida. The subject property is 100 percent leased to Steward Medical Group – Advanced Neuroscience Institute and there will be five years of lease term remaining at close of escrow. Steward Healthcare System is headquartered out of Dallas, Texas and is the largest physician-owned healthcare network which includes over 5,500 providers, 43,000 healthcare professionals, and cares for more than 12.3 million patients per year. It is a global network of hospitals, urgent care centers, skilled nursing facilities, behavioral health services, and multi-specialty physician practices.

In August of 2021, it was announced that Steward Health Care, “successfully completed the acquisition of five hospitals in South Florida from Tenet Healthcare Corporation (NYSE: THC) including North Shore Medical Center, Coral Gables Hospital, Hialeah Hospital, and Palmetto General Hospital in Miami Dade County, and Florida Medical Center in Broward County. Under the terms of the agreement, Steward will purchase these five hospitals and their associated physician practices from Tenet for approximately $1.1 billion.” Even though the lessee is Steward Medical Group, the guarantor on both leases is Tenet Florida, Inc. Tenet Healthcare is a Fortune 500 Company and according to their 2Q 2023 Earnings Report, the FY 2023 adjusted EBITDA outlook is going to be in the range of $3.310-$3.460 billion.

Steward Advanced Neuroscience Institute is a neurological and ancillary services organization, led by a team of neurologists, interventional neurologists, neurosurgeons, and therapists, offering advanced neurologic, diagnostic, and therapeutic care. The practices offer outpatient services in Broward County. The team of experienced physicians at SMG offer a range of neurological services and physical therapy. Treating conditions requiring specialized care, such as movement disorders, neuromuscular diseases, nervous system infections, behavioral neurology, and neuropsychology. The subject property is split up into two suites, one being suite 100 which is dedicated to clinic space (15,028 SF) and suite 101 which houses the C-Arm X-Ray machine (1,773 SF). Steward Medical Group is operating under an “Absolute Net Lease” structure which extinguishes ALL landlord responsibilities. This desirable lease structure translates into the property being extremely passive for a prospective investor since it will shield the lessor from a future rise in annual operating expenses that would adversely impact their cash flow. Additionally, this lease features rare annual rent increases of the greater of 3 percent or the CPI increase which provides an excellent hedge against inflationary pressure. In December of 2022, ownership paid $150,000 for a GAF roofing system membrane overlay with a 15-year transferable warranty but this capital expenditure is amortized over the useful life and billed into the tenant’s monthly CAM statements for reimbursement.

The property benefits from excellent visibility and accessibility located near the corner of North Pine Island Road (35,000 VPD) and Oakland Park Boulevard (40,000 VPD). Sunrise is situated in a South Florida submarket just ten miles west of Fort Lauderdale, and thirty miles north of downtown Miami. This outpatient facility is 3 miles from the 459-bed acute care medical-surgical facility that is now operated by Steward (Florida Medical Center). Given its close proximity to the hospital campus, this outpatient facility benefits from the affiliation with the Steward-Florida Medical Center which allows this healthcare network to provide one single continuum of care. The population within ten miles is over 1,140,000 million earning an average household income of $87,000. Thanks to year-round warm weather, favorable tax laws, and growing cities; South Florida has been experiencing significant growth and the state is projected to grow by 32 percent by 2040.

No State Income Tax

National Medical tenant

Recent renovations

Strong annual increases-3%

New roof in 2022

Infill location in Florida, close to Miami