Net Lease Profile: Fresenius Medical Care
Fresenius Medical Care usually have 15 year leases typically with increases built in. There is a wide divergence in the cap rate spread for Fresenius centers due to the fact that many locations are subsidiaries and do not contain corporate guarantees from Fresenius itself. However, the locations with corporate guarantees are in high demand and usually trade for low cap rates. The very nature of Fresenius's business means that a steady and growing routine among its clients develops over time providing a reliable income stream tied to an often visited location.
Due to America's heightened obesity - over 133,000,000 Americans are considered overweight - and aging population, the occurrence of diabetes is increasing. As diabetes leads to roughly 44% of kidney failures, the need for medical facilities offering dialysis will continue to grow. Typically, Patients require three dialysis procedures per week - each procedure taking 3-4 hours. Though a bit morbid, the reality is that dialysis centers can depend upon customers visiting frequently each week and an inelastic demand for their services.
The medical industry as a whole is poised for future growth and net lease investors are only logical in recognizing the stability this lends.
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