VIEW AERIAL TOUR. Freddy s Frozen Custard NORTHWEST EMERGENCY HOUGHTON TOWN CENTER FREESTANDING EMERGENCY DEPARTMENT "FSED"

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1 EPRESENTATICE VIEW AERIAL HOUGHTON TOWN CENTER FREESTANDING EMERGENCY DEPARTMENT "FSED" E OLD VAIL RD Lakewood, CO TUCSON, AZ Freddy s Frozen Custard

2 AERIAL PHOTO DESERT WILLOW 353 HOMES Walgreens McDonald s RITA RANCH MASTER PLAN COMMUNITY +/- 4,900 HOUSEHOLDS RITA COMMERCE INDUSTRIAL PARK S HOUGHTON RD +/- 6,500 EMPLOYEES +/- 1,300 ACRES OLD VAIL ROAD N 2

3 AERIAL PHOTO 2016 ESTIMATED DEMOGRAPHICS SOUTHEAST TUCSON Estimated Population 74,252 Projected Population (2021) 82,092 Average Household Income $86,768 Daytime Population 54,433 Projected Growth ( ) 10.60% SHOVEL READY PADS HTC PHASE 2 E OLD VAIL RD 3

4 AERIAL PHOTO S HOUGHTON RD McDonald s (COMING SOON) SHOVEL READY PADS HTC PHASE 2 E OLD VAIL RD 4

5 DRIVE AERIAL TIMES PHOTO SYCAMORE PARK +/- 1,024 HOMES 10 MINUTES CORONA DE TUCSON +/- 4,247 HOMES 15 MINUTES SITE RITA RANCH +/- 4,900 HOUSEHOLDS 4 MINUTES DESERT WILLOW +/- 353 HOUSEHOLDS 5 MINUTES MESQUITE RANCH CIVANO SIERRA MORADO +/- 2,391 HOUSEHOLDS 9 MINUTES MOUNTAIN VAIL +/- 650 HOUSEHOLDS 4 MINUTES RINCON VALLEY +/- 1,333 HOUSEHOLDS 18 MINUTES RANCHO DEL LAGO +/- 2,163 HOUSEHOLDS 12 MINUTES 5

6 FINANCIAL ANALYSIS FREE STANDING EMERGENCY DEPARTMENT "FSED" E. Old Vail Rd. Tucson, AZ FINANCIAL SUMMARY Price $6,825,000 Net Cash Flow $376,392 (1) Cap Rate 5.51% Building SF 11,500 SF Year Built 2015 Lot Size LEASE SUMMARY Lease Type 1.49 Acres Absolute Triple-Net (NNN) Tenant Northwest Hospital, LLC (subsidiary of Community Health Services) Lease Guarantor - Public Company Community Health Systems, Inc. (CYH) Roof & Structure Tenant Responsible Rent Commencement Date November 1, 2015 Lease Expiration Date October 31, 2030 Lease Term Remaining Rental Increases 13 Years 1.75% Annually Renewal Options 2, 5 Year Options (2) Footnotes: (1) Based on Year 1 cash flow, assuming a closing date of 1/1/2018. (2) Each option shall be exercised by Tenant by giving written notice to Landlord not less than 1 year prior to expiration of term or extended term. The Base Rent during each Extended Term shall be the then-prevailing Market Rental Rate as reasonable determined by Landlord and Tenant. ANNUALIZED OPERATING DATA LEASE YEARS ANNUAL RENT CAP RATE Current - 10/31/2018 $375, % 11/1/ /31/2019 $381, % 11/1/ /31/2020 $388, % 11/1/ /31/2021 $395, % 11/1/ /31/2022 $402, % 11/1/ /31/2023 $409, % 11/1/ /31/2024 $416, % 11/1/ /31/2025 $423, % 11/1/ /31/2026 $431, % 11/1/ /31/2027 $438, % 11/1/ /31/2028 $446, % 11/1/ /31/2029 $454, % 11/1/ /31/2030 $462, % BASE RENT $376,392 Net Operating Income $376,392 Total Return 5.51% $376,392 SUBJECT PROPERTY IS AVAILABLE TO BE PURCHASED WITH THE ADJACENT MEDICAL OFFICE BUILDING. CONTACT THE LISTING AGENT FOR DETAILS. 6

7 TENANT AERIAL OVERVIEW PHOTO Northwest Emergency Center (NEC) is an emergency room (ER) just like any ER in a hospital except it is not attached to a hospital. The staff at NEC is available to treat patients 24 hours a day, seven days a week for urgent and emergency medical conditions. NEC has board-certified emergency room physicians, nurse practitioners and registered nurses along with the same diagnostic equipment found in most emergency rooms. NEC is a 12-bed center. Unlike most urgent cares, NEC is open 24/7 and can treat patients with lifethreatening conditions. NEC will care for patients with heart attacks, strokes, head injuries, fractures, abdominal pain, respiratory issues and more. These treatments are typically not provided at urgent care facilities. Lease Guarantor: About Community Health Systems, Inc. Community Health Systems, Inc. is one of the largest publicly traded hospital companies in the United States and a leading operator of general acute care hospitals in communities across the country. The Company, through its subsidiaries, owns, leases or operates 137 affiliated hospitals in 21 states with an aggregate of approximately 22,000 licensed beds. The Company s headquarters are located in Franklin, Tennessee, a suburb south of Nashville. Shares in Community Health Systems, Inc. are traded on the New York Stock Exchange under the symbol CYH. Community Health Systems Inc. is a Fortune 500 company. NEC offers CT scan, digital x-ray and ultrasound capabilities along with lab services. At Northwest Emergency Center, patients can expect: Faster access to emergency care for Vail and surrounding community residents Convenience (will be open 24/7) Board-certified Emergency Physicians, Nurse Practitioners and Registered Nurses Full-service lab Digital x-ray, CT scan and ultrasound Complete range of emergency diagnostic services ER 30-minute pledge 7

8 AERIAL PROPERTY PHOTO DESCRIPTION INVESTMENT HIGHLIGHTS Absolute Triple-Net (NNN) Lease - Tenant Constructed Building Under Reverse Build to Suit Annual Rental Increases 13+ Years Remaining Strategically Located Next to Northwest Healthcare - Properties May be Purchased Together Northwest Emergency Center Provides Faster Access to Emergency Care for Vail and Surrounding Community Residents - 24 Hour Facility Hospital Grade Construction- Tenant Hired Layton Construction Company, One of the Largest Health Care Construction Companies in the U.S., to Build the Emergency Center In Addition to Landlord s Construction Costs, Tenant Spent in Excess of $5 Million for Construction Costs and FF&E Easily Accessible from Interstate-10 - The Primary Connector Between Southern Arizona and Phoenix Ideally Located Serving a Captive Trade Area - The Closest Emergency Center is 16 Miles Away Trade Area Population of 74,252 In Proximity to UA Tech Park (+/- 6,500 Professionals), Home to Numerous Employers Including IBM, Raytheon, Citi, United Healthcare and More Houghton Town Center is the Only Power Center Serving the Southeast Tucson Submarket There are Currently about 22,000 Single Family Homes in the Trade Area with Current Growth Potential Expected to More Than Double to 48,000 Over Time Located Within the Vail School District (12,000 K-12 Students) - One of the Best School Districts in the State of Arizona Raytheon Missile Systems Announced Last Year It Plans to Add at Least 1,900 Jobs on Land Near its Current Plant at Tucson International Airport, Potentially Drawing Other Suppliers to the Site as Well Houghton & Old Vail Intersection Has Been Expanded and Improved TRADE AREA DEMOGRAPHICS 2016 ESTIMATED DEMOGRAPHICS TUCSON OVERVIEW SOUTHEAST TUCSON Estimated Population 74,252 Projected Population (2021) 82,092 Average Household Income $86,768 Daytime Population 54,433 Projected Growth ( ) 10.60% Tucson is the second largest metropolitan area in Arizona with just over one million residents and serves as an anchor to businesses located in the Southern Arizona corridor. Tucson offers its community an outstanding quality of life along with a low cost of doing business. Tucson is known for an innovative manufacturing industry in a variety of different sectors such as biotech, aerospace, healthcare, defense, optics, solar, information technology and water. Raytheon Missile Systems, IMB, Texas Instruments, Intuit Inc., Universal Avionics, and the University of Arizona are some of the top employers in Tucson where each has a significant presence within the community. Raytheon just announced 2,000 new hires to their facility. Furthermore, Caterpillar Inc. announced in May 2016 that they are going to locate their Surface Mining Equipment and Technology headquarters to downtown Tucson, which will add 600 high paying jobs to the local Tucson community over the next few years. In addition to Caterpillar, Comcast and Home Goods, all Fortune 500 companies have added Tucson locations recently. The University of Arizona is an integral part of Tucson. It has been named a Top 15 US public research institution, and enjoys a large student enrollment of 40,600 students and 11,000 administration staff members and faculty. The University of Arizona s science center in Tucson continues to graduate more students in the optics field than any other similar program in the world. Tucson International Airport (TUS) serves as an international port of entry and offers non-stop service to Phoenix, Los Angeles, San Diego, Las Vegas, San Francisco, Seattle, Salt Lake City, Denver, Minneapolis, Milwaukee, Chicago, Atlanta, Houston, Dallas and Albuquerque. 8

9 PROPERTY PHOTOS PROPERTY FINANCIAL PHOTOS ANALYSIS 9

10 AERIAL SITE PLAN PHOTO 10

11 AERIAL SITE PLAN PHOTO OLD VAIL ROAD HTC PHASE 2 McDonald s (COMING SOON) S HOUGHTON RD 11

12 HOUSING AERIAL PHOTO STUDY MASTER PLANNED HOUSING MAP 10 Rincon Mountains SOUTHEAST TUCSON/ I 10 CORRIDOR Rita Ranch Houghton Corridor/Vail Totals: Existing: 12,437 Lot Inventory: 775 Platted: 2,642 Planned: 5,164 HOUGHTON CORRIDOR/ VAIL Rocking K Ranch Southeast Tucson / I 10 Totals: Existing: 4,970 Lot Inventory: 83 Platted: 512 Planned: 9, Verano 47 Pima County Fairgrounds Rancho del Lago 19 Villages at Vigneto, Benson: 28,000 homes planned destination retirement 18 Construction proposed start early year potential absorption of +/ 1,500 homes per year starting in New Tucson West Housing Totals: Existing: 3,113 Lot Inventory: 158 Platted: 2,392 Planned: 2, Hook M New Tucson (West) CORONA DE TUCSON +/- 4,247 HOMES New Tucson (East) New Tucson East Housing Totals: Existing: 1,329 Lot Inventory: 309 Platted: 160 Updated August 2017 Santa Rita Mountains 12

13 HOUSING AERIAL PHOTO STUDY MASTER PLANNED HOUSING MAP MAP # COMMUNITY NAME EXISTING HOMES ACTIVE SELLING SUBDIV'S VACANT LOTS AVG BASE PRICE PLATTED HOMES NOT ACTIVE TOTAL HOMES HOUGHTON CORRIDOR/VAIL HOUSING DEVELOPMENTS 1 RITA RANCH 4,990 4,990 2 EMPIRE HEIGHTS DESERT WILLOW MOUNTAIN VAIL ESTATES BY LENNAR $ MOUNTAIN VAIL ESTATES BY RICHMOND AMERICAN $ MOUNTAIN VAIL ESTATES BY KB HOME $ MESQUITE RANCH SAGUARO TRAILS BY MATTAMY HOMES SIERRA MORADO BY PULTE HOMES 1,100 1, CIVANO I & II RANCHO DEL LAGO 1, , DEL WEBB AT RANCHO DEL LAGO $ RANCHO DEL LAGO BY MERITAGE HOMES ACACIA/PALO VERDE RIDGE BY D R HORTON $ RINCON KNOLLS RIVERWALK AT RANCHO DEL LAGO BY PEPPER-VINER RANCHO SALADO ESTATES VAIL VISTA ESTATES BY MESQUITE HOMES 2 22 $ VAIL RIDGE ESTATES BY A F STERLING VISTAS DEL SOL BY SOMBRA HOMES RINCON TRAILS/LOMA ALTA COMMUNITIES RINCON TRAILS BY MESQUITE HOMES 2 5 $ ESTATES AT OLD SPANISH TRAIL CUSTOMS CUS COYOTE CREEK CUSTOMS BLUFF CREEK BY PEPPER-VINER HOMES ACADEMY VILLAGE BY MIRAMONTE HOMES $ ROCKING K RANCH 1,100 5,064 6,164 HOUGHTON CORRIDOR/VAIL TOTALS 12, ,642 5,164 21,018 13

14 HOUSING AERIAL PHOTO STUDY MASTER PLANNED HOUSING MAP MAP # COMMUNITY NAME EXISTING HOMES ACTIVE SELLING SUBDIV'S VACANT LOTS AVG BASE PRICE PLATTED HOMES NOT ACTIVE TOTAL HOMES CORONA DE TUCSON HOUSING DEVELOPMENTS 28 NEW TUCSON (EAST) 1, , ANDRADA RANCH BY CORNERSTONE HOMES $ MOUNTAIN VIEW RANCH CUSTOMS CUS J D RANCH NEW TUCSON (WEST) 997 1,178 2, SANTA RITA 1,213 1, SANTA RITA VISTAS BY KB HOME $ SANTA RITA RANCH III BY LENNAR SANTA RITA RANCH III BY RICHMOND AMERICAN SANTA RITA RANCH III FAGAN RANCH SANTA RITA FOOTHILLS ESTATES SANTA RITA TOWNHOMES BY CORNERSTONE HOMES 1 60 $ SYCAMORE CANYON SYCAMORE CANYON BY SOMBRA HOMES 40 7 $ SYCAMORE CANYON II SYCAMORE SPRINGS/SYCAMORE HILLS ESTATES SYCAMORE VISTA BY D R HORTON $ HOOK M 1,800 1, WILMOT PARK CORONA DE TUCSON TOTALS 4, ,552 2,905 10,366 14

15 HOUSING AERIAL PHOTO STUDY MASTER PLANNED HOUSING MAP MAP # COMMUNITY NAME EXISTING HOMES ACTIVE SELLING SUBDIV'S VACANT LOTS AVG BASE PRICE PLATTED HOMES NOT ACTIVE SOUTHEAST TUCSON/I-10 CORRIDOR HOUSING DEVELOPMENTS 47 SYCAMORE PARK VOYAGER HOMES SYCAMORE POINT VISTA MONTANA VISTA MONTANA BY D R HORTON $ LA ESTANCIA BY MERITAGE HOMES $ LA ESTANCIA BY RICHMOND AMERICAN LA ESTANCIA 370 1,836 2, WINDOW ROCK CANTERBURY RANCH JULIAN RANCH CORAZON DEL PUEBLO RANCHO VALENCIA 1,010 1, EMPIRE VISTA VALENCIA RESERVE DESERT VISTA ESTATES/TERRACE VERANO 8,000 8,000 SOUTHEAST TUCSON I-10 CORRIDOR TOTALS 4, ,836 15,401 TOTAL HOMES TOTAL HOMES 21,849 1,325 5,706 17,905 46,785 15

16 AERIAL SITE PLAN PHOTO MASTER PLANNED HOUSING MAP CORONA DE TUCSON +/- 4,247 HOMES 16

17 REGIONAL AERIAL PHOTO MAP Picture Rocks PHOENIX, AZ & CALIFORNIA Casas Adobes Saguaro National Park Flowing Wells Catalina Foothills Tanque Verde Tucson Mountain Park MAP South Tucson DOWNTOWN Tucson TUCSON CARONDELET ST. JOSEPH S HOSPITAL +/- 30 MINS Saguaro National Park East 10 DAVIS MONTHAN 19 KINO MEDICAL CENTER +/- 20 MINS 86 Valencia West Williams-Sonoma Rita Ranch FUTURE SONORAN CORRIDOR 10 MEXICO Vail TEXAS 19 17

18 Net Leased Disclaimer Confidentiality Agreement Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows: By accepting this Marketing Brochure, you agree to treat the information contained herein regarding the lease terms as confidential and proprietary and to only use such information to evaluate a potential purchase of this net leased property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a net leased property, it is the Buyer s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with the suitability of the property for your needs. Like all real estate investments, this investment carries significant risks. Buyer and Buyer s legal and financial advisors must request and carefully review all legal and financial documents related to the property and tenant. While the tenant s past performance at this or other locations is an important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the location of the property, and Buyer s legal ability to make alternate use of the property. The information contained in the following offering memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and it should not be made available to any other person or entity without the written consent of Marcus & Millichap. By taking possession of and reviewing the information contained herein the recipient agrees to hold and treat all such information in the strictest confidence. The recipient further agrees that recipient will not photocopy or duplicate any part of the offering memorandum. If you have no interest in the subject property at this time, please return this offering memorandum to Marcus & Millichap. This offering memorandum has been prepared to provide summary, unverified financial and physical information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCBs or asbestos, the compliance with local, state and federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this offering memorandum has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. Prospective buyers shall be responsible for their costs and expenses of investigating the subject property. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

19 Exclusively listed by: OFFICES NATIONWIDE Jamie Medress Senior Vice President Investments PHOENIX OFFICE Tel: (602) Fax: (602) Mark Ruble First Vice President Investments PHOENIX OFFICE Tel: (602) Fax: (602) Chris Lind Senior Advisor PHOENIX OFFICE Tel: (602) Fax: (602) Leasing Consultants James Eaton NAI GEIS REALTY GROUP, INC. Tel: (610) Fax: (610) Rick Kleiner CUSHMAN & WAKEFIELD Tel: (520) Fax: (520)