Sweet home, Alhambra: Builder sells diabetes clinic for $15M

New space has a 15-year net lease with DaVita

Jan.January 30, 2019 02:00 PM
DaVita CEO Kent Thiry and an aerial shot of 1237 East Main Street

A new dialysis clinic in Alhambra has sold for $15 million, showing the strength of a niche market catering to the chronically ill.

The seller was an Alabama-based developer named B2 Partners (pronounced “B-squared”), which bought the block-through site at 1237 E. Main Street in 2016 for $5.5 million.

B2 redeveloped the 14,125-square-foot property last March and signed up dialysis giant DaVita, Inc. to a 15-year triple-net lease that started in June. The clinic sits on a 1.2-acre lot.

Dialysis clinics promise a good income stream for landlords who can afford to build out a specialized medical space and deal with the red tape of a regulated industry.

“We do a lot of dialysis in Southern California,” said Grady Liu, a broker with MacroReal Commercial, who represented the buyer, a local family acting through an entity named Jinbo Holdings LLC. “It’s a more stable opportunity than for office, retail, or drug stores.”

That’s partly because competition in the field is weak, Liu added. DaVita, a Fortune 500 company that runs thousands of clinics around the country, has only one real competitor: Fresenius, a German-held corporation that, coincidentally, runs a nearby clinic at 2300 W. Valley Boulevard.

And people will never stop getting older or sicker. A marketing package for the Alhambra property prepared by Preserve West Capital touted the area’s aging population, saying its 11.3-percent diabetes rate exceeds the national average. Lennar Corp. is also redeveloping a senior center on Marengo Avenue.

Rental income at the Alhambra property starts at $791,000 annually, with built-in increases every five years, according to the brochure.

Putnam Daily and Michael Maffia of Preserve West Capital marketed the property for B2.

B2 could not be reached for comment.

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