Merative Office & Lab

Sentinel Opportunity Fund I, LLC (“Sentinel” of the “Fund”) acquired the Merative and Merge PAC headquarters (the “Property” or “Merative”), a Class B office building and laboratory located in Hartland, WI. The property is fully leased to Merative until November 2035. Merative, formerly IBM Watson Health, is a healthcare technology company that serves a range of clients in the healthcare and life sciences sectors. Merative is headquartered in Ann Arbor, Michigan and this location houses its hardware storage, software technology testing, and a recently upgraded training center. The company has been in the healthcare AI technology sector for decades.

The building features an attractive, mission-critical lab space with advanced power, temperature, and humidity controls and offers amenities such as a divisible training center, a cafeteria/large meeting room, and production & warehouse space. This asset has been institutionally owned and is well maintained.  Recent tenant improvements of approximately $1.65 million underscore the property’s significance to Merative, as it supports essential regulatory and operational activities, particularly FDA compliance.

The higher than market acquisition cap rate of 9.9% makes this investment profitable from day one and there could be additional value unlocked through the developable 2 acres adjacent to the East of the building.  Sentinel will acquire the asset in an all-cash transaction and look to secure accretive 5-year debt in year two utilizing modest leverage and interest only terms.