APPROACH to investments
Walz Kraft actively invests as a principal in medical office buildings and alternative net leased real estate across the United States. Walz Kraft employs a syndication strategy (described below) raising capital with family offices, qualified individual investors, and investment funds.
why medical office buildings? |
- Stability. The medical office sector has a diverse tenant base who typically operate with strong revenue streams. Some tenants within our portfolio include opthamology, imaging centers, OBGYN & women's health, surcigal centers, dental, and others.
- Longevity. By acquiring a medical leased property with robust patient counts and an attractive location for healthcare providers, long term growth is achievable.
- Resilience. Healthcare is an essential business much less susceptible to the headwinds caused by pandemics or recessions. While several sectors such as retail, general office, and hospitality tend to suffer in these times, the demand for medical office space remains stable.
- Growth. The majority of medical office buildings have annual rent growth within their leases as a hedge against inflation. These annual increases are typically in the 2% to 3% range, or are tied to the Consumer Price Index.
Acquisition Criteria
Property Types:
Lease Structure: NN and NNN Lease Structures.
Price Range: $2mm to $20mm purchase price, individual properties or portfolios.
Tenancy: 1 to 3 Tenants.
Lease Term: Short and Long Term.
Tenant Credit: Local, Regional, or Credit Rated Tenants.
Geography: United States.
Demographics: 50,000 people or more within a 5-mile radius or tertiary markets with exceptional growth rates.
- Medical Office Building Investment Properties and Sale Leasebacks.
- Alternative Single Tenant Net Leased Properties with strong underlying fundamentals.
Lease Structure: NN and NNN Lease Structures.
Price Range: $2mm to $20mm purchase price, individual properties or portfolios.
Tenancy: 1 to 3 Tenants.
Lease Term: Short and Long Term.
Tenant Credit: Local, Regional, or Credit Rated Tenants.
Geography: United States.
Demographics: 50,000 people or more within a 5-mile radius or tertiary markets with exceptional growth rates.
THE BASICS OF TRIPLE NET LEASE INVESTMENTS (NNN)
What is a Triple Net Lease?A lease where the landlord receives rent net the three major expenses often associated with owning real estate. These expenses are paid by the tenant.
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the three net expensesThe three net expenses are Common Area Maintenance, Property Taxes, and Property & Liability Insurance.
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Why invest in NNN Leased Properties?By having the tenant cover the three nets, the landlord receives monthly rent payments with reduced responsibilities.
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investing in real estate via syndication
Walz Kraft works with groups and individuals who want to diversify or increase the value of their investment portfolios by providing the opportunity to invest in real estate without the large up-front costs and property management hassles, thereby creating a truly passive income stream. This is done through a strategy known as Syndication.
- Walz Kraft (Sponsor) sources a property to acquire.
- Walz Kraft creates a separate business entity to acquire the property usually as a Limited Liability Company (LLC) or similar entity.
- Walz Kraft becomes the General Partner (GP) or Manager of the entity and courts investors who participate passively as Limited Partners (LP). These investors are often referred to as Class A Members.
- An Operating Agreement is then drafted outlining the rights and duties of the Sponsor and Limited Partners, these rights and duties include but are not limited to:
- Expected returns due to you, the investor
- How and when distributions are provided
- Voting rights of the Limited Partners and Sponsor
- Sponsor’s fees for acquiring and managing the investment
LPs do not participate in the management of the Partnership.
LP liability is limited at his/her investment and LPs are not personally liable for partnership debts.
GP can be personally liable for the partnership debt.
