Millcreek Commercial Properties has partnered with American Development Partners to develop $50 million in single-tenant triple-net lease assets throughout the US in the fourth quarter. Millcreek will serve as the capital partner for American Development, which will build multiple single-tenant properties, including two facilities for Healthcare Solutions Holdings.
Millcreek was introduced to the American Development Partners while scouting an opportunity in Houston. "They have an extensive background in single-tenant net lease product across the US," Kevin Long, president and CEO at Millcreek Commercial, tells GlobeSt.com. We spent a number of months exploring a venture together. We have come together and are excited about the synergy that these two companies bring together for the American public."
Millcreek is bullish on the single-tenant net lease market and in serving a specific demographic of investors, average citizens who do not have access to quality, stable investment opportunities. "We built a platform that allows us to acquire high quality assets and then sell them in smaller portions, 10% of the property, to a seller," says Long. "That is our business model, and we have seen exceptional growth."
Long is also attracted to specific geographic locations. Long wants strong fundamentals and diversity, but also takes a close look at state taxes. "I go market diversity," he says. "We avoid states with high income taxes and we like income tax free states or states that are below the median income tax of 6%. We invest in strong economics with good real estate fundamentals." Georgia, Arkansas, South Carolina, Illinois and Tennessee are among his favored markets at the moment.
American Development Partners and Millcreek will focus on building high-quality urgent care centers, with a completed value of $50 million expected upon resale. Millcreek's primary buyer demographic is exchange and retirement buyers, who have largely been driving demand for single-tenant assets. "We are 1031 exchange compliant, and we are retirement account qualified, so people can get out of a four-plex of a duplex that they have owned and move tax free into this type of asset," says Long. "Everyone agrees that we are looking at a market correction. This is a wonderful asset class to stabilize your retirement account and have a known amount of realized gain every month."
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Kelsi Maree Borland
