Spotlight on DaVita Dialysis
DaVita Dialysis, also known as DaVita Kidney Care, is a division of DaVita HealthCare Partners Inc., a Fortune 500 company that, through its operating divisions, provides a variety of healthcare services to patient populations throughout the United States and abroad. A leading provider of dialysis services in the United States, DaVita Kidney Care treats patients with chronic kidney failure and end stage renal disease. Founded in 1999 under the name Total Renal Care, the company was quickly restructured and renamed DaVita, Italian for “giving life.” Services offered by DaVita include Home Peritoneal Dialysis, Home Hemodialysis, In-Center Dialysis, In-Center Nocturnal Dialysis as well as others.
As of September, 2015, DaVita Kidney Care operated and provided administrative services at 2,225 outpatient dialysis centers located in the United States serving approximately 174,000 patients. The company also operated 104 outpatient dialysis centers located in 10 countries outside the United States. The company employs more than 50,000 workers across the nation.
DaVita has been constantly ranked well among Fortune 500 companies. In 2011, DaVita was ranked 359 and by 2014 reached 230 and was rated one of the “World’s Most Admired Companies” by Fortune from 2005-2011. Furthermore, DaVita has been recognized by Modern Healthcare, Newsweek, and WorldBlu as well.
DaVita is a publicly traded company (NYSE: DVA) and was assigned an investment grade rating of (BB-) by Standard & Poor’s and (Ba3) by Moody’s. In the fiscal year 2014 ending December 31st, DaVita’s net income was $863.33 million, almost doubling its 2010 net income at $484.22 million. Total revenue for 2014 was $12.8 billion increasing at a rate of 8.9%. In the first quarter of 2015, DaVita brought in total revenue of $3.29 billion reflecting a strong year going forward.
DaVita’s facilities are leased by the corporation for fifteen year terms, with renewal options of five to ten years. The leases offer periodic rent escalation clauses, typically every five years of lease term. Outpatient dialysis centers average around 7,000 square feet and clinics are approximately 9,000 plus square feet. All DaVita Dialysis leases are corporately guaranteed and usually are NN leases, with landlords being responsible for roof and structure. The tenant makes a significant investment in buildout and installation of specialty fixtures making it more likely that they will renew at the end of the lease term. And in general, since diabetes leads to around 44% of kidney failures, dialysis centers are treating a growing number of patients each year.