CS1031 Ashland MOB, DST
There are 13.5 years remaining on the absolute triple net lease, with annual rent escalations of 1.5% and three five-year renewal options. Under the absolute triple net lease, the tenant is responsible for all operating expenses, taxes, insurance, maintenance and repairs.
The lease is guaranteed by five practice physician/owners with a combined net worth of approximately $19.4 million. The building was built to suit for BetterMed Urgent Care in 2016. A recipient of the Certified Urgent Care designation from the Urgent Care Association of America, BetterMed provides premium care at impressive speed. The company has six locations in greater Richmond, Virginia. Medical real estate has proven to be a stable asset class, with health care expenditures expected to reach 19.7 percent of GDP by 2026.1
1 Centers for Medicare and Medicaid Services. “National Health Expenditure Projections 2017-2026.”
Securities offered through WealthForge Securities, LLC, the managing broker-dealer for the CS1031 Ashland MOB, DST offering and member FINRA/SIPC. Capital Square and WealthForge are not affiliated.
Consider the Risks An investment in the Interests involves substantial investment and tax risks, including, without limitation, the following risks:
- Past performance is not a guarantee of future results.
- The economic success of the Interests will depend upon the results of operations of the Property. Fluctuations in vacancy rates, rent schedules, and operating expenses can adversely affect operating results or render the sale or refinancing of the Property difficult or unattractive.
- The Master Tenant’s capitalization is supported solely by the cash flow from the underlying tenant lease. The Sponsor is not under any obligation to contribute capital to the Master Tenant.
- No assurance can be given that future cash flow will be sufficient to make the debt service payments on any borrowed funds and also cover capital expenditures or operating expenses.
- No assurance can be given that Beneficial Owners of Interests will realize a substantial return (if any) on their investment or that they will not lose their entire investment in the Trust.
- The Interests are not freely transferable by the Beneficial Owners.
- There are various risks associated with owning, financing, operating, and leasing commercial properties in California.
- The Interests do not represent a diversified investment.
- Beneficial Owners must completely rely on the Master Tenant to collect the rent and operate, manage, lease, and maintain the Property.
- The Beneficial Owners have no voting rights with respect to the management or operations of the Trust or in connection with the sale of the property.
- There are various conflicts of interest among the Trust, the Sponsor, the Signatory Trustee, and their Affiliates.
- The Interests are illiquid.
- There are tax risks associated with an investment in the Interests.
- There are risks related to competition from properties similar to and near the property.
- There may be environmental risks related to the property.
Newly developed 5,100-square-foot medical office building located in the greater Richmond, Virginia area