Case Study- Edgewood
Case Studies / 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:Â 10.46%
- Pre-Expansion Cash on Cash:Â Â 7.48%
- Post-Expansion IRR Targeted:Â 11.81%
- Post-Expansion Cash on Cash:Â Â 7.85%
- Proforma Hold:Â Â Â Â Â Â Â Â Â Â Â Â Â 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%Â Â Â Â Â Â Â $72,500
- Sq Ft of Hospital              23,700
- Surgical Rooms                   4
- Private patient rooms:Â Â Â Â Â Â Â Â 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.