FORT LAUDERDALE, FL—Memorial Hospital Pembroke, a 179,745-square foot hospital in Pembroke Pines, is up for sale again. Marcus & Millichap just listed the asset for $54 million with a 8.58% cap rate.

M&M listed the hospital about three and a half years ago at $62 million with a 7% cap rate. The hospital’s ownership entity and the hospital itself are both nonprofits.

“We are targeting either high net worth individuals who possibly have a foundation or are philanthropic in nature,” Adam J. Tiktin, a vice president investments in Marcus & Millichap’s Miami office, tells GlobeSt.com. “This is a zero cash flow transaction.”

Built in 1975 on 8.6 acres, the hospital is located at 7800 Sheridan St. on the southeast corner of the intersection of Sheridan Street and University Drive in Pembroke Pines. Memorial Hospital Pembroke joined Memorial Healthcare System in 1995.

Tiktin says a buyer needs to come in with $9 million, which is 17% of the purchase price, to acquire the hospital. The hospital is leased by an AA- credit-rated tenant, South Broward Hospital District, through June 30, 2025. The lease contains 1.5% annual increases and one 25-year renewal option.

“In 13 years the mortgage will be paid off,” Tiktin says. “If the tenant stays it’s an absolute homerun for the buyer. A $9 million investment today could be $5.5 million a year of free cash flow after 13 years, ever year for the next 25 years.”

The Memorial Healthcare System is a community-owned health services network that provides health services to residents of Florida’s Broward, Dade and Palm Beach counties. The hospitals provide primary care, diagnostic, emergency, surgical and rehabilitative care services. The system also has nursing home facilities, community clinics, a network of primary care physicians, a cardiac and vascular medicine institute, a cancer treatment center, and a women’s health center. Memorial Hospital Pembroke is licensed for up to 301 beds.

“It typically cost about a million per licensed bed, so it would coast about $300 million to rebuild this hospital versus the $54 million that someone can buy it for,” Tiktin says. “The hospital is spending millions of dollars currently renting the property, which shows their commitment to the location.”