NNN Tenant of the Quarter Q1 2023: Fresenius Medical Care Dialysis Centers

Feb 2, 2023


The medical sector is highly sought-after in the net lease investment marketplace. Regardless of world events, whether it’s a pandemic, global unrest, or economic uncertainty, medical care is essential for people who need urgent and ongoing care. Fresenius Medical Care, a dominant player in the US dialysis market, offers such medical care while offering triple net (NNN) investors a reliable, low-risk, long-term, income-producing investment with inflation protection.

Coupled with investor benefits, Fresenius Medical Care has a long history of providing quality healthcare and stands out in terms of financial strength. Its net profits are impressive, as is the number of properties the company owns. For these reasons and more, Fresenius is Westwood Net Lease Advisors NNN Tenant of the Quarter, Q1, 2023.

Fresenius Medical Care History

Fresenius Medical Care was founded in Germany in 1912 by Eduard Fresenius as a chemical manufacturing business, which then expanded into healthcare services and treatments for kidney diseases. In addition to dialysis services, the company also provides dialysis treatment products.

Fresenius clinics provide emotional, medical, dietary, financial, and well-being resources for patients with Chronic Kidney Care (CKD) and End Stage Renal Disease (ESRD). Over the years, its success has been built on delivering high-quality care tailored to each patient’s individual needs and staying competitive through innovation while focusing on remaining financially sound.

Fresenius Medical Care has invested heavily in research and development to stay at the forefront of its field, developing new treatments and technologies to improve care for dialysis patients. This includes artificial intelligence, remote monitoring systems, customized dialyzers, as well as new treatments and technologies that improve patient outcomes while keeping costs low.

As of September 30, 2022, Fresenius Medical Care treated 344,593 patients in 4,153 dialysis clinics in 30 countries. The company runs approximately 2000 clinics in 48 US states, plus Washington D.C. Its North American Health Care Services headquarters is in Waltham, Massachusetts.

Dialysis chairs and equipment inside a medical clinic

Fresenius Financial Strength

In 2022, Fresenius responded to some residual Covid-19 market issues and the stressed US labor market by investing in cost-reduction initiatives, such as eliminating administrative functions that can be automated. These efforts have enabled Fresenius Medical Care to remain financially competitive.

The company expects to have $3.8 billion in 2022 revenue and a net income of approximately $873 million. This makes Fresenius Medical Care one of the largest players in the dialysis market and one of the most successful companies in healthcare.

Fresenius is an investment-grade company with a BBB Standard & Poor’s rating and a Baa3 Moody’s rating with a stable outlook.

A Fresenius Financial Outlook Press Release states, “Based on the Company’s new operating model, which will come to life in January 2023, Fresenius Medical Care will not only simplify its organization and significantly reduce overhead costs but rigorously optimize its portfolio in both — the future Care Delivery (Health Care Services) and Care Enablement (Health Care Products) segments. The subsequent capital allocation will focus on profitable growth businesses and improving operational leverage.”

Why Fresenius Kidney Care Centers Make Great NNN Investments

Investing in a Fresenius Kidney Care NNN lease property offers a number of advantages for investors. Triple net lease investors are attracted to Fresenius Medical Care due to its reasonable price point, the inherent security that comes with the build-to-suit nature of the property, and the reliable income stream for each location — the aging baby-boomer population is raising demand for kidney dialysis, which requires clients to visit routinely and consistently. For these reasons, it is also less likely that the tenant will leave at lease expiration.

Not only does a Fresenius property provide an opportunity to generate passive monthly income from a reliable source, but it also provides the potential for long-term capital appreciation. Additionally, Fresenius Kidney Care NNN lease properties are often located in prime locations that offer great visibility and patient access. Investing in this type of property can be an excellent way to diversify your portfolio and create a steady stream of income.

Fresenius NNN Lease Attributes

  • Prices range from $2M–5M.
  • Cap rates, caring for market fluctuations, range from 5.50–6.50%.
  • Building sizes vary from 7,000–16,000 sq. ft.
  • Lot sizes typically range from 1.0–2.5 acres.
  • Most are NNN leases with built-in rent escalations; the amount varies by location.
  • New leases are long-term, 15-year, corporate-guaranteed triple net or double net leases.
  • Properties are custom-built with high-end medical equipment and specialty fixtures, contributing to the likelihood of lease longevity.

Fresenius Kidney Care centers make excellent net lease investments due to their strong financial performance in any economy. The company’s consistent cash flow makes the properties attractive for investors looking for steady returns with minimal risk.

"Road to Wealth" sprayed on a road into a sunset

To Wrap it Up — Fresenius Dialysis Centers are Solid NNN Investments

The financial strength, US market share, and the array of NNN investor benefits make Fresenius Medical Care Westwood’s NNN Tenant of the Quarter. Investing in a triple net Fresenius dialysis center is an attractive option for high-net-worth investors who want monthly income and a steady overall return with minimal risk.

Moreover, this investment comes with several additional benefits such as very low or no maintenance required, inflation protection built into the lease, a high probability of lease renewal, tax opportunities, and a valuable tangible asset.

Depending on your financial and lifestyle goals, risk tolerance, and budget, investing in one or more Fresenius Kidney Care Centers can be a smart decision that will yield reliable returns far into the future.

Whether you’re a seasoned CRE investor or just entering the triple net lease market, our advisors are here to help you purchase your ideal NNN property. We work with you from before the property search through closing and thereafter, at no cost to you. Contact our team today for a no-obligation conversation to learn more about Fresenius NNNs and other net lease investment options. 314-997-5227


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