Case Study- Edgewood

Edgewood
(Surgical Hospital)

Prevail Real Estate Opportunities is pleased to present Edgewood Investors LLC (“EI”), an exclusive acquisition of and leaseback to, the operating physicians of a surgical hospital in Transfer, PA.

EI intends to acquire, then construct an additional 8,000 sq ft expansion, operate and then exit the property in 2032.

If you have any questions, please reach out to your advisor or contact Regan Smith at rsmith@prevailiws.com

Investor Return Summary*

  • Pre-Expansion IRR Targeted:  10.46%
  • Pre-Expansion Cash on Cash:    7.48%
  • Post-Expansion IRR Targeted:  11.81%
  • Post-Expansion Cash on Cash:   7.85%
  • Proforma Hold:                          10 Yrs

 

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Investment Snapshot

  • Initial Project Cost                 $17,598,126
  • Equity                                      $6,848,126
  • Initial Loan                              $10,750,00
  • Minimum Investment 1%            $72,500
  • Sq Ft of Hospital                           23,700
  • Surgical Rooms                                      4
  • Private patient rooms:               10 Suites

Property Information

  • EI is a physician-owned surgical hospital, fully accredited by the Centers for Medicare and Medicaid Services and grandfathered under the ACA for CMS reimbursement.
  • Located in western Pennsylvania, it serves surrounding Mercer, Lawrence, Crawford and Venango counties with a draw population of over 500,000.
  • One of few surgical hospitals in the region, the selling physician group has entered a number of partnerships that have driven increased revenue and are on track to perform 1,400 joint replacements in 2021. Several doctors are contributing capital to the new ownership.
  • The hospital is in-network with all major commercial payors, including Highmark Blue Cross Blue Shield, Cigna, TRICARE, United Healthcare, UPMC Health Plans, providing a sustainable income stream and lower earnings volatility going forward.
  • EI is planning to add on 8,000 sq ft to include additional operating rooms, procedure rooms, pre-op bays, and inpatient suites with a new 15 year lease thereafter.

*These are all preliminary estimates, with no guarantee of performance, and involve risk.

Important Information

This communication is neither an offer to sell nor a solicitation of an offer to buy any security. An offer may only be made via a written offering document by Prevail Alternative Assets, LLC (“Prevail”). Prevail will provide such offering documents (“Documents”) only to qualified accredited investors and has prepared this communication solely to enable you to determine whether you are interested in receiving additional information about it or the real estate project summarized above (the “Project”). This communication must be read in conjunction with the Documents prior to making any investment decision. Information about the Project contained herein has not been audited or reviewed by any third party. While projections about the Project’s future performance is based on Prevail’s experience and good faith judgments, the recipient should understand that projections are based on numerous assumptions, including that the current economic environment continues, that existing asset performance trends will continue to track business plans, that historical behavior of the Project’s property type will not change, that perception of market opportunities for disposition will hold true, and that the competitive landscape within which the Project operates will not change. Returns to investors would be contingent upon numerous events occurring and subject to considerable risks. Significant assumptions were made by Prevail to calculate the presented projections, including assumptions on the amount of leverage used by the Project, the Project having sufficient assets and cashflows, debt service and capital expenditures, the continuation of favorable leasing terms, the operating costs for the Project, the costs of taxes and insurance, the absence of claims against the Project, that lease terms (including rental rates) continue, that projected occupancy and rollover rates continue, that management and other expenses remain constant, and that property-level debt will not need to be refinanced at less favorable terms.

The Project’s future capitalization will be contingent upon numerous events occurring and subject to considerable risks. The occupancy and rollover rates of the Project will be dependent upon many factors beyond the control of the Project or Prevail. Any expression of targeted rates is merely a statement of a goal. Significant assumptions were made by Prevail to calculate the presented occupancy and rollover rates. Many factors can impact the Project’s after-tax returns, including the risk that tax laws may change. A myriad of factors may impact the Project’s ability to achieve any returns. Any number of factors could contribute to results that are materially different. All investment opportunities presented by Prevail involve substantial risk and may result in the loss of some or all of your investment. Please do not forward this email.

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