Elliott Bay Capital Trust Sells Dialysis Portfolio for $143M

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Seattle-based Elliott Bay Capital Trust has sold a 50-property portfolio of dialysis clinics to a publicly traded REIT for $142.9 million, according to JLL, which represented the seller and procured the buyer. The investment-grade portfolio spans about 430,000 square feet across 22 states and consists of single-tenant clinics leased to the two largest dialysis providers in the U.S., Fresenius Medical Care and DaVita.

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Located in major metropolitan areas, the net lease properties are fully occupied and backed by investment-grade credit or public companies listed on the New York Stock Exchange. The properties have high retention rates and inelastic, long-term tenancy owing to their significant fit-out and exacting Medicare certification and state licensing.

The dialysis industry commands $21 billion in annual revenue with nearly 500,000 patients and benefits from high barriers to entry with stable reimbursement. Driven by the aging of the baby boomer generation and rising rates of end-stage renal disease, the segment is expected to see long-term growth and profitability regardless of overall economic trends.

JLL noted in a statement that the medical office sector has registered consistent annual sales of $9 to $10 billion and that 2019 is expected to keep pace with recent years, as appetite for the properties remains robust. Managing Director Mindy Berman, Senior Vice Presidents Peter Bauman and Tivon Moffitt and Vice President Brannan Knott led the interdepartmental team at JLL that sold the portfolio.

Elliott Bay notches another deal

Privately held real estate firm Elliott Bay Capital Trust invests in health-care properties in segments such as cancer treatment, multispecialty clinics, imaging and ambulatory surgery centers. The assets are net leased to leading health systems, national sector-leading companies and regional care providers.

In February, the company purchased three buildings in a four-building medical office portfolio sold by Southwest Atlanta Nephrology P. C. (SWAN) in metro Atlanta. The 80,116-square-foot portfolio changed hands for a total of $18.9 million.