OFFERING MEMORANDUM. FRESENIUS MEDICAL CARE W. Eight Mile Rd, Livonia, MI CONTACT US DANIEL H. KUKES KEVIN J. BAKER JASON GREENSPAN

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1 OFFERING MEMORANDUM FRESENIUS MEDICAL CARE W. Eight Mile Rd, Livonia, MI CONTACT US DANIEL H. KUKES Principal (248) KEVIN J. BAKER Principal (248) JASON GREENSPAN Associate (248) Halsted Road, Suite 150 Farmington Hills, MI Phone: (248) landmarkinvestmentsales.com

2 CONFIDENTIALITY DISCLAIMER Landmark Commercial Real Estate Services, Inc. d/b/a Landmark Investment Sales ( BROKER ) has been retained by the Owner to sell the 100% fee simple title of this asset. The Broker is the exclusive agent for the sale of this asset. The Broker has prepared the Property Information with information provided by the Owner, from sources deemed to be reliable. The Potential Purchaser will conduct its own due diligence of The Property, independently and without reliance upon BROKER of the Owner. Information furnished herein, the Offering Memorandum (the OM ) is intended solely for the Potential Purchaser and its affiliates ( Recipients ) for its review of the acquisition of Fresenius Medical Center at W. Eight Mile Rd, Livonia, Michigan ( Property ). All information in the OM ( Confidential Information ) shall be deemed confidential. Confidential Information shall not include any information which is generally available to the public or which becomes available to the Recipients on a non-confidential basis from a source that is or was under no obligation not to disclose such information. In consideration of Broker and disclosure of the confidential information, the recipient shall not at any time, attempt in any manner to deal directly in any manner or circumvent Broker. Unless otherwise agreed in writing or required by law, the Recipients will not use, disclose, or reveal any Confidential Information for any purpose other than in connection with the proposed transaction to any persons or entities other than those employees, officers, directors, bankers, advisors, representatives, or agents (collectively, Representatives ) who clearly need such access to perform their employment, fiduciary or contractual duties to the Recipient and to actively and directly participate in the evaluation of the Confidential Information. Additionally, Recipients shall not directly contact anyone directly associated with the Property without the express written consent of the Owner or Broker. Recipients agree not to contact or initiate contact with the Tenants, at any time, either directly or indirectly. Unless such approval is specifically granted in written from the Owner or Broker. This agreement shall be governed by the laws of the Michigan, and in any action brought to enforce the terms hereof, Recipients hereby irrevocably consents to jurisdiction and venue in the Circuit Court for the County of Oakland, State of Michigan, or the United States District Court, whichever the Owner may elect. The invalidity or unenforceability of any provision of this agreement as applied to a particular occurrence or circumstance shall not affect the validity of or enforceability of any of the other provisions of this agreement or the applicability of such provisions as the case may be. This agreement shall inure to the benefit of and may be enforced by the Owner and its successors and assigns and shall be binding on the Recipients, its officers, directors, partners, agents, members, representatives and successors in interest. If any portion of this agreement becomes the subject of litigation or arbitration, the prevailing party in such suit or proceeding shall be entitled to reimbursement for its reasonable costs, expenses and attorney s fees incurred, including those incurred in connection with any appeals. A copy of this agreement delivered by facsimile transmission shall be binder on both parties. 2

3 TABLE OF CONTENTS Executive Summary 4 Investment Highlights 5 Offering Summary 10 NOI Projections 11 Tenant Profile 12 Location Map 13 Market Aerial 14 Property Outline 15 Lease Plan 16 Survey 17 Top Employers 18 Market Summary 19 Property Condition Summary 20 Demographics 21 Our Team 22 3

4 EXECUTIVE SUMMARY W. Eight Mile Road, Livonia, MI, commonly known as Fresenius Medical Care Botsford Park was built by Botsford General Hospital as an ancillary medical office building located in close proximity to Botsford General Hospital (the Property ). In 2015, Beaumont Medical System merged with Botsford Health System and Oakwood Health System. The Property sits on over 4.00 acres of prime real estate located across the street from a major hospital system. The 16,217 SF building was previously owned and occupied by Botsford General Hospital and leased to its affiliate, Botsford Kidney Center, Inc. who used 13,216 SF and Botsford General Hospital occupied the remaining 2,601 SF. In 2009, Botford Kidney Center, Inc. sold its business and assigned its lease to Bio-Medical Applications of Michigan, Inc., a wholly owned subsidiary of Fresenius Medical Care North America Fresenius. Fresenius leases 84% of the building and pays for 84% of all operating costs, including property taxes, insurance, and common area maintenance. The Property is being offered based on the Net Operating Income of $162,734 which includes zero value on the vacant 2,601 SF. This unique opportunity allows an Investor to acquire a property leased to a best in class medical tenant, in close proximity to a major hospital. In addition to the location, the Tenant is paying a below market rent of $13.50/SF compared to recent area medical office rents for new construction which range from $20.00-$30.00/SF. 4

5 INVESTMENT HIGHLIGHTS INVESTMENT HIGHLIGHTS Value Add Opportunity a) 2,601 SF of the building is currently vacant which presents an upside component opportunity for a landlord to lease the additional space and increase the assets Net Operating Income; and b) building is on four acres providing room for significant expansion of the building. Irreplaceable Location Subject property is situated within a dense medical corridor consisting of Beaumont Botsford Hospital (330 beds), Beaumont Cancer Center, and Grifols Medical. PRICING Price (In-Place NOI): $2,410,874 Cap Rate (on In-Place NOI): 6.75% Price Per SF: $ Rental Increases: Substantial NOI Increase with Vacant Lease Up: Relative to increase in the CPI past 12 months Potential to significantly increase NOI by leasing vacancy within building Strong Performing Clinic Fresenius is open six days a week, running three shifts, Monday/Wednesday/Friday. Annual Rent Bumps Rent increases annually by an amount equal to the increase in the Consumer Price Index during the immediately preceding 12 month period. Low Price Per Square Foot - Subject property boasts a low sales price per square foot ($132/SF) compared to similarly situated medical office buildings with national credit tenants. National Recession Resistant Tenant As of December 31, 2015, Fresenius Medical Care (NYSE: FMS) reported total revenue of more than $16.73B, net income of $1.02B, and a net worth in excess of $9.8B. 5

6 BEAUMONT MEDICAL CAMPUS 6

7 VIEW NORTH 7

8 VIEW WEST 8

9 VIEW EAST 9

10 OFFERING SUMMARY NET OPERATING INCOME Vacant Lease Up In Place Year 2 Annual psf Annual psf Revenue Base Rental $ 197,691 $ $ 230,204 $ CAM 149, , Real Estate Taxes 33, , Total Revenue $ 380,690 $ $ 454,698 $ Operating Expenses CAM 178, , Property Taxes 39, , Total Expenses $ 217,956 $ $ 224,495 $ Net Operating Income $ 162,734 $ $ 230,204 $ Years Annual Base Rent Present 2/28/2021 $162,734 Annual Increases Base rent increases based on CPI Index, not to exceed three percent (3%) Option Period 1 3/1/2021-2/28/2026 Base Rent is equal to Fair Market Value ($ /SF medical space) LEASE DETAILS Lease Term: Remaining Lease Term: Lease Type: PROPERTY DETAILS Year Built: 1976 (renovated 1995) Rentable Square Feet: Land Area: Ownership: Taxes: Insurance: 10 years 4 years, 5 months NN Rent Commencement: 3/1/2011 Lease Expiration: 2/28/2021 Tenant: Landlord Responsibilities: Bio-Medical Applications of Michigan, Inc. d/b/a Fresenius Medical Care Roof & structure 16,217 SF 4.82 acres Fee simple Tenant pays 84% of total Tenant pays 84% of total Option Period 2 3/1/2026-2/28/2031 Base Rent is equal to Fair Market Value Repairs & Maintenance: Tenant pays 84% of total 10

11 NOI PROJECTIONS Minimum Rent Reimbursements Tenant Name Pro Rata Share Square Feet Monthly Annual psf CAM Real Estate Taxes Total Reimb. Total Gross Revenue psf Fresenius Medical Care 83.96% 13,616 $ 16,474 $ 197,691 $ $ 149,696 $ 33,302 $ 182,999 $ 380,690 $ Vacant 16.04% 2,601 Total % 16,217 $ 16,474 $ 197,691 $ $ 149,696 $ 33,302 $ 182,999 $ 380,690 $ Vacant 83.96% 13,616 Occupied 16.04% 2,601 Vacant Lease Up Year 2 Minimum Rent Reimbursements Tenant Name Pro Rata Share Square Feet Monthly Annual psf CAM Real Estate Taxes Total Reimb. Total Gros Revenue psf Prospective Tenant 16.04% 2,601 $ 2,709 $ 32,513 $ $ 29,454 $ 6,552 $ 36,006 $ 68,519 $ Total 2,601 $ 2,709 $ 32,513 $ $ 29,454 $ 6,552 $ 36,006 $ 68,519 $ Vacant Lease Up In Place Year 2 Annual psf Annual psf Revenue Base Rental $ 197,691 $ $ 230,204 $ CAM 149, , Real Estate Taxes 33, , Total Revenue $ 380,690 $ $ 454,698 $ Operating Expenses CAM 178, , Property Taxes 39, , Total Expenses $ 217,956 $ $ 224,495 $ Net Operating Income $ 162,734 $ $ 230,204 $

12 TENANT PROFILE Fresenius Medical Care North America is the premier health care company focused on delivering the highest quality care to people with renal and other chronic conditions. Worldwide, more than 2.5 million patients with this disease regularly undergo dialysis therapy, a vital blood cleansing procedure that substitutes the function of the kidney in the case of kidney failure. TENANT OVERVIEW Founded: 1912 Headquarters Bad Homburg, Germany Stock Ticker: NYSE: ADR Locations: 2,200+ Employees: 60,000 in US; 223,000 global Website: Through Fresenius s industry-leading network of more than 2,200 dialysis facilities, outpatient cardiac and vascular labs, and urgent care centers, as well as the country s largest practice of hospitalist and post-acute providers, Fresenius Medical Care provides coordinated health care services at pivotal care points for hundreds of thousands of chronically ill customers throughout the continent. As the world s only vertically integrated renal company, Fresenius also offers specialty pharmacy and laboratory services, as well as manufacturing and distributing the most comprehensive line of dialysis equipment, disposable products and renal pharmaceuticals. 12

13 LOCATION PONTIAC BRIGHTON NOVI SOUTHFIELD WARREN LIVONIA DETROIT ANN ARBOR WOODHAVEN TRAVERSE CITY CADILLAC GRAND FLINT RAPIDS LANSING LIVONIA DETROIT KALAMAZOO ANN ARBOR JACKSON FRESENIUS MEDICAL CENTER W. Eight Mile Rd, Livonia, MI 13

14 MARKET AERIAL 14

15 PROPERTY OUTLINE 8 MILE ROAD (28,200 CPD) 15

16 LEASE PLAN 2,601 SF 13,616 SF 16

17 SURVEY 17

18 LIVONIA S TOP EMPLOYERS COMPANY # OF EMPLOYEES Ford Motor Company 3,553 Trinity Health 1,900 NYX, Inc. 1,850 Livonia Public Schools 1,845 St. Mary Mercy Livonia 1,688 ZF-TRW Automotive 1,323 Schoolcraft College 1,109 Roush 1,000 Mastronardi Produce USA (Sunset) 900 Comerica Bank

19 MARKET SUMMARY BEAUMONT BOTSFORD MEDICAL CAMPUS Beaumont Health System recently acquired Botsford Hospital and Oakwood Healthcare Inc. for $3.8B. Since the merger, Beaumont Health will control about 30% of the inpatient market with eight hospitals and 3,337 beds, 153 outpatient sites, 5,000 physicians, and 33,093 employees. Click here for merger details. LIVONIA, MI As the ninth largest city in Michigan and the third largest in Wayne County, Livonia boasts over 4,000 businesses. Major local employers include Ford Motor Company, United Parcel Services (UPS), Roush Enterprises, NYX Inc., Phillips Service Industries, Inc., McLaren Performance Technologies, and Beaumont Health System. The city is also home to seven institutions of higher education, including the main campuses of Madonna University and Schoolcraft Community College and a recently built site for Davenport University. STRONG DEMOGRAPHICS The area accounts for a population of over 234,000 and an average household income of over $69,000 in a five (5) mile radius. STRONG RETAIL CORRIDOR Immediate trade area showcases several national credit tenants including Walgreens, AutoZone, 7- Eleven, Dollar General, Pep Boys Auto Parts, O Reilly Auto Parts, White Castle, and several regional tenants as well. 19

20 PROPERTY CONDITION SUMMARY Property Description: Fresenius Medical Care Address: Eight Mile Road, Livonia, MI Building SF: 16,217 SF Occupancy: 84% Tax Parcel: Year Built: 1976 (renovated 1995) Land Area: 4.82 acres Trade Area Statistics 1 MILE 3 MILE 5 MILE 2016 Population: 11,834 82, , Households: 4,844 35, , Avg. HH Income: $53,324 $65,311 $69, Median HH Income: $46,527 $54,339 $56, Total Businesses: 533 3,692 12, Total Employees: 6,870 39, ,257 Traffic Counts: Grand River Ave = 50,800 CPD Eight Mile Rd = 28,600 CPD 20

21 DEMOGRAPHICS DESCRIPTION 1 MILE 3 MILE 5 MILE POPULATION HOUSEHOLDS RACE 2016 Estimated Population 11,834 82, , Projected Population 11,656 82, , Census Population 12,147 85, , Census Population 13,137 91, ,988 Projected Annual Growth 2016 to % -0.2% - Historical Annual Growth 2000 to % -0.6% -0.6% 2016 Estimated Households 4,844 35, , Projected Households 4,885 35, , Census Households 4,821 35,235 97, Census Households 5,040 37, ,796 Projected Annual Growth 2016 to % 0.3% 0.5% Historical Annual Growth 2000 to % -0.3% -0.2% 2016 Est. White 74.4% 64.7% 52.2% 2016 Est. Black 19.3% 28.6% 40.1% 2016 Est. Asian or Pacific Islander 2.3% 3.5% 4.7% 2016 Est. American Indian or Alaska Native 0.5% 0.3% 0.3% 2016 Est. Other Races 3.5% 2.9% 2.7% INCOME BUSIN ESS 2016 Est. Average Household Income $53,324 $65,311 $69, Est. Median Household Income $46,527 $54,339 $56, Est. Per Capita Income $21,905 $28,036 $29, Est. Total Businesses 533 3,692 12, Est. Total Employees 6,870 39, ,257 21

22 OUR TEAM DANIEL H. KUKES PRINCIPAL Daniel Kukes is a Principal and Co-Founder of Landmark Investment Sales. Daniel specializes in the sale of retail shopping centers, medical office, and single tenant net lease investment properties across all property types. He currently represents some of the nation s largest institutional real estate funds, private equity group, and high net worth investors in acquiring and listing investment properties all over the country. Since 2010, Daniel has closed deals totaling over 5,000,000 SF valued at over $500,000,000. Daniel joined Landmark in 2009 as an Associate Broker. He began his real estate career at NAI Farbman where he focused on shopping center leasing and retail tenant representation. After five years at NAI Farbman, Daniel joined DAP Investments as a partner responsible for retail development, acquisitions and leasing. While there, he developed several single tenant and shopping center projects in Michigan and Illinois. Daniel is a graduate of Michigan State University with a Bachelor of Arts degree in Pre-Law & Society. dkukes@landmarkcres.com KEVIN J. BAKER PRINCIPAL Kevin Baker is a Principal and Co-Founder of Landmark Investment Sales. Kevin specializes in the sale of retail shopping centers and single tenant net lease investment properties across all property types. He currently represents some of the nation s largest institutional funds, private equity funds, and high net worth investors in listing investment properties all over the country. Since 2010, Kevin has closed deals totaling over 5,000,000 SF valued at over $500,000,000. Prior to 2010, Kevin worked extensively at Landmark as a broker specializing in tenant representation and landlord representation completing in excess of 100 lease & sale transactions. Kevin joined Landmark in 2005 as a Sales Associate. Prior to Landmark, Kevin attended Michigan State University and University of Michigan-Dearborn where he studied finance. Kevin began his real estate career in 2001 when he founded Baker Real Estate Holdings, specializing in acquisition and management of a student housing portfolio at Michigan State University. kbaker@landmarkcres.com JASON GREENSPAN ASSOCIATE Jason Greenspan graduated from The University of Michigan in 2012 with a Bachelor of Arts degree in Political Science and Sociology. Jason also received a Juris Doctor in 2015 from Michigan State University College of Law where he concentrated in business and corporations. He passed the Michigan Bar Examination in July Starting in 2011, and while in law school, Jason interned at Landmark Investment Sales identifying, sourcing, and underwriting investment grade properties. As an intern, Jason has successfully participated in the closing of over $40,000,000 in single tenant and power center closings all across the country. With law school behind him and four years of experience in real estate investments sales, Jason has earned a full time Associate salesman position in Landmark s growing Investment division. Jason specializes in the representation of buyers and sellers of institutional grade single tenant properties, high profile unanchored retail centers, grocery anchored centers, and power centers. jgreenspan@landmarkcres.com 22