Fresenius Medical Care

Fresenius Medical Care

Fresenius Medical Care Holdings, Inc.

Rent increases: 1.7% annual increases

Building Size: 7,495 square feet

Fresenius Medical Care is an ideal tenant for several reasons. First and foremost, they are an extremely profitable, well run, multi-national corporation. Additionally, Fresenius is a classic industry leader, as they own the lion’s share of their market, with the number two player being their largest client. Furthermore, they dominate a truly non-cyclical industry.

Fresenius Medical Care Holdings, Inc.

Fresenius Medical Care has committed to lease the property for an initial term of 15 years, which expires August 2030. During the initial term of the lease base rent shall increase each year by 1.7%. The lease also includes three consecutive options to extend the lease for a period of five years each.

The Tenant

Fresenius Medical Care is an ideal tenant for several reasons. First and foremost, they are an extremely profitable, well run, multi-national corporation. Additionally, Fresenius is a classic industry leader, as they own the lion’s share of their market, with the number two player being their largest client. Furthermore, they dominate a truly non-cyclical industry. Because kidney dialysis is an essential, life-sustaining medical service their business is almost completely unaffected by economic fluctuations which can decimate other fields. With more than 3,000 clinics around the globe, Fresenius is the world’s largest integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than two million individuals worldwide. It services approximately 300,000 patients around the globe each year.

Since the foundation of the company more than 18 years ago, Fresenius Medical Care has been able to quadruple its sales and increase its earnings tenfold. With its strong performance in 2014, Fresenius is looking to deliver its 18th consecutive dividend increase to its shareholders.

Financial and Operating Highlights:

  • Operating Income – For the first half of 2015, operating income was $556 million in the first quarter..
  • EBITDA – In 2014 the earnings before interest and taxes, depreciation and amortization increased by 2% from 2013 to $2.9 billion.
  • Net Revenue – For the year ending in 2014, net revenue increased 8% to $15.83 billion, compared to $14.31 billion in 2013.
  • Outlook – Fresenius expects revenue to grow at an average annual growth rate of approximately 10% through 2020.

The Lease

Fresenius Medical Care has committed to lease the property for an initial term of 15 years, which expires August 2030. During the initial term of the lease base rent shall increase each year by 1.7%. The lease also includes three consecutive options to extend the lease for a period of five years each.

One of the more appealing aspects of this lease is that Fresenius Medical Care pays directly or reimburses all of the taxes, insurance premiums and maintenance costs of the building. Fresenius pays the Tenant’s share of the operating expenses incurred by the Landlord during the term of the lease. Therefore, the property co-owners have very few active management duties rendering this triple-net lease property a passive, hassle-free, real estate investment.

ABOUT ROCKWELL

ROCKWELL DEBT-FREE PROPERTIES

8494 S. 700 E. Ste 200 · Sandy, UT 84070

Toll Free: 1-877-568-1031 | Phone 801-568-1031

Info@rockwelltic.com | www.rockwelltic.com

Disclaimer

1031Sponsors.com is a web portal owned by Investment.Net, LLC. The company is functioning in the 1031 exchange market for more than 15 years. Neither Investment.Net nor 1031Property intend to act as a broker or sell any goods or services. 1031Sponsors does not offer legal or tax advice. Tax topics discussed are for educational purposes only and should not be considered professional tax advice. It's recommended that you discuss your situation with your tax or legal advisor. Distributing an investment in different assets or choosing alternative investments involves higher risks than traditional investments and shouldn't be taken for granted. All alternative investment strategies are sold along with a prospectus that discloses all risks, fees, and expenses. These investments are not tax-efficient, and an investor should consult with his/her tax advisor before investing. The investor should be prepared to bear loss knowing that financial risks are attached to such investments.

1031Sponsors help investors residing in the United States complete their 1031 exchanges by providing them well-researched and authentic information related to 1031 exchanges. Services listed on the website 1031Sponsors.com can be modified to make them relevant to the present investment situation in the United States. For additional information, please contact 888-876-6005.