Investment Overview

Marcus & Millichap is pleased to present 417 Vance Street located in Clinton, North Carolina. This is a three-tenant medical office building that was constructed in 2007 and consists of 13,634 square feet. All three suites are leased to strong credit healthcare tenants which are UNC Physicians Network, Cape Fear Valley Health System, and Anne Arundel Dermatology. Suite A is occupied by UNC Physicians Network, LLC – wholly owned subsidiary to parent companies UNC Health Care System (Moody’s “AA3” Credit) and Rex Healthcare (Moody’s “A2” Credit). Suite B is occupied by Cumberland County Hospital System Inc. d/b/a Cape Fear Valley Health System (Moody’s “A3” Credit). Suite C is occupied and anchored by Anne Arundel Dermatology which acquired the former practice, Atlantic Dermatology P.A., in November of 2021. Anne Arundel is a national operator with over 112 locations and 268 providers in seven separate states. UNC Physicians Network has occupied their respective suite since 2018 and recently executed a five-year renewal on January 1, 2023 which takes their primary lease term until December 31, 2027. Cape Fear Valley Health System is the newest tenant within the subject property and signed a one-year lease on July 1st, 2024. The anchor tenant, Anne Arundel Dermatology, which occupies approximately 54 percent of the RBA has occupied this property since 2018 (formerly under the Atlantic Dermatology P.A. banner before being acquired). All three leases are structured as modified-gross with 3 percent annual rental escalations which acts as a hedge against inflationary pressure. All three rental rates are at or below market levels for medical office in the region. On a price per square foot basis at $199, this is well-below replacement cost for brand-new medical office buildings which can range from $375-$550 depending on the specialties being offered at the location. The subject property is strategically located less than one mile away from the 147-bed Sampson Regional Medical Center. Along with being located near other medical tenants on Beaman Street, other national tenants such as CVS, Walgreens, Sherman Williams sit near the subject property. Since the pandemic, North Carolin has added 396,000 new residents and it’s the 9th largest state by population size in the United States (10.8 million people). Clinton, North Carolina has also been designated as an “Opportunity Zone” which offers a future investor tax benefit (contact listing agents for further details).