Project Description

Dermatology Associates of Wisconsin Portfolio

Northern Wisconsin (10 Locations)
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Property Type:
Single Tenant Net Lease Portfolio

Portfolio Sale Price:
$28,339,280

Square Footage:
93,142

Major Tenants:
Dermatology Associates of Wisconsin

Highlights

•  93,142 Square-Foot, Medical Office Building Portfolio | Ten Medical Office Buildings Located Throughout Wisconsin

•  All Located were Developed as Built-to-Suit for Dermatology Associates of Wisconsin, S.C. | Leading Dermatology Group in the Industry for 15 Plus Years with 37 Locations Throughout Wisconsin, Iowa, and Michigan

•  Dermatology Associates 2012 Revenue Exceeded $55 Million

•  Tenant’s Long-Term Occupancy in the Area, Recent Development for New Locations, and Commitment to New Long-Term Leases Contributed to the Success of this Transaction

Print Details

Contact Agents:

Scott Niedergang Managing Director Direct: (312) 338-7060 Cell: (312) 342-4495 scott.niedergang@cushwake.com
Gino Lollio Managing Director, Healthcare Advisory Practice | Capital Markets Direct: (312) 338-7061 Cell: (239) 810-4714 gino.lollio@cushwake.com

Wisconsin Broker of Record:

Matthew Fitzgerald

Summary

The Dermatology Associates of Wisconsin, also known as Forefront Dermatology, portfolio consisted of 10 single-tenant, net-leased medical buildings totaling 93,142-square -feet located throughout northeast Wisconsin.  Every location was built-to-suit for the tenant, which is one of the largest dermatology practices in the country.  The Downtown Chicago Healthcare Real Estate Group represented the physician owners that included the founder of the practice and his two partners. 

Dermatology Associates of Wisconsin, launched in 2004 with one clinic in Manitowoc, Wisconsin, grew to over 40 clinics by the end of 2014.  After partnering with a healthcare-focused private equity firm in 2015, they began an aggressive growth plan and now have in excess of 80 locations throughout the Midwest. 

After meeting with ownership to discuss their goals and objectives with a disposition, our team presented pricing scenarios under a multitude of different sale-leaseback structures.  An agreement was made to execute brand new 10-year, absolute triple-net leases at each location upon close of escrow.  Those leases accounted for annual 3.00 percent increases, had zero landlord expense responsibilities, and provided the tenant three, five year renewal options. 

Within two weeks on the market, our team procured over 10 offers from both private and institutional capital sources.  The bidding process that was created forced buyers to submit offers at record setting price per square foot figures.  The winning bidder was a privately traded Real Estate Investment Trust (REIT) that closed on an all-cash basis.  During the due diligence phase of the transaction, our team was able to assist and add-value to the lease form negotiation between the attorneys representing the Buyer, Seller, and private equity partner.

Seller Profile: General Partnership of Founding Physicians – Manitowoc, WI

Buyer Profile: Non-Traded, Private Healthcare Real Estate Investment Trust (REIT) – Tampa, FL

Additional Photos

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