Class A Medical Office | Sherman, Texas

A Class A Medical Office NNN Transaction: Basis, Tenant Profile and Exit Discipline

A Class A medical-office acquisition with three medical tenants and a Triple Net lease structure, selected based on purchase basis, tenant profile, income characteristics, and market opportunity.

A Class A Medical Office NNN Transaction: Basis, Tenant Profile and Exit Discipline — Class A Medical Office — NNN

$1.1M

Acquisition

$1.7M

Disposition

18 mo

Hold

3

Medical Tenants

Case Study Questions

Key Questions This Case Study Answers

What was the project?

Class A Medical Office — NNN. A Class A medical-office acquisition with three medical tenants and a Triple Net lease structure, selected based on purchase basis, tenant profile, income characteristics, and market opportunity.

What was Meetu Bhatnagar’s role?

Meetu Bhatnagar, Ph.D., CCIM participated across feasibility, coordination, and execution. The full scope of responsibilities is detailed in the Strategy and Execution sections below.

What was the historical outcome?

The outcome is described in the Outcome section below. All results are presented as historical transaction performance for educational context only. Past performance does not guarantee or predict future results.

What does this case teach commercial owners and buyers today?

The most competitive market is not always where the best basis exists. Expanding the opportunity set beyond obvious locations can identify properties with stronger purchase basis and tenant quality. The key lesson is: The obvious market is not always where the best basis exists.

Project Overview

Class A Medical Office — NNN

An investor group was seeking a commercial property in the Dallas-Fort Worth region offering a combination of income, tenant stability, and appreciation potential.

Rather than limiting the search to the most competitive locations, the opportunity set was expanded. A Class A medical office property in Sherman, Texas was identified.

The property was occupied by three medical tenants under a Triple Net lease structure.

The Opportunity

Identifying the Right Asset

Expanding the search beyond the most competitive DFW submarkets identified a Class A medical office in Sherman, Texas with strong tenant profile and NNN lease structure.

Strategy

Value Creation Approach

What NNN Means

Under a typical Triple Net — or NNN — lease, tenants are responsible for many property-level expenses such as property taxes, insurance, and maintenance. Actual obligations are governed by the individual lease.

Challenge

Transaction

The property was acquired for $1.1 million with approximately $220,000 in initial equity and sold for $1.7 million approximately 18 months later.

$1.1M

Purchase Price

$1.7M

Sale Price

~18 mo

Hold Period

Execution

Execution

Based strictly on the stated purchase, financing, and sale figures — and before transaction costs, taxes, financing costs, fees, or other adjustments — the increase represents approximately a 273% gross gain relative to the initial $220,000 equity contribution.

The obvious market is not always where the best basis exists.

Outcome

Outcome

The property was acquired and disposed within approximately 18 months. The historical transaction performance reflects the combination of purchase basis, tenant quality, and market selection.

Historical transaction performance. This figure is a gross calculation before transaction costs, taxes, financing costs, fees, and other adjustments. Past performance does not guarantee or predict future results.

The obvious market is not always where the best basis exists.

Key Takeaway

Key Takeaway

The most competitive market is not always where the best basis exists. Expanding the opportunity set beyond obvious locations can identify properties with stronger purchase basis and tenant quality.

The obvious market is not always where the best basis exists.

Explore Your Deal

Before You Fall in Love With the Deal, Test the Assumptions.

Every commercial property has a story. The asking price tells you what the seller wants. The pro forma tells you what someone hopes will happen. The real question is: what happens when the assumptions meet reality?

Start with the complimentary Deal Room Check.

Case Study Questions

Frequently Asked Questions

Important Disclosure

The transactions described above are historical case studies provided for educational and informational purposes. Individual transaction outcomes vary, and past performance does not guarantee or predict future results. Figures may be rounded and, where indicated, represent gross transaction-level calculations before applicable financing costs, transaction expenses, taxes, fees, and other adjustments. Tax treatment depends on individual circumstances; consult an appropriately qualified tax professional regarding tax matters. JMD Signature Real Estate Group provides commercial real estate brokerage and related real estate services and does not provide legal, tax, securities, or individualized investment advice.