SUBJECT PROPERTY EXCLUSIVE OFFERING $2,703,000-6.75% CAP 214.915.8890 JOE CAPUTO joe@exp1031.com BOB MOORHEAD bob@exp1031.com RUSSELL SMITH russell@exp1031.com property. Building renovated in 2013, 6,514+ SF building on 1.2+ acres. tenant. First Choice Emergency Room is based in Lewisville, TX and is the leading freestanding emergency room system. $78.2 million in sales in 2012. lease structure. Brand new, 10-year, NNN lease with 10% rent increases in year 6 and each option period. location. First Choice Emergency Room is located along Gus Thomasson Road (24,794 Cars / Day). Gus Thomasson is a main north/south arterial road in Mesquite that is directly accessible via Interstate 30 (122,837 Cars / Day). Major area retailers include Macy s, Dillard s, Sears, JC Penny, Kroger, Minyard s Food Store, 7-Eleven, Subway, Wendy, Red Lobster, Outback Steakhouse, Olive Garden, TGI Friday s, and Whataburger. Mesquite has long been recognized as a major retail area within the Dallas/Fort Worth Metroplex. Mesquite is located 15 minutes east of Dallas. J. GRADY FIELD gfield@tarantino.com 512.785.6566
Table of contents Disclaimer PAGE 1: PAGE 2: PAGE 3: PAGE 4: PAGE 5: PAGE 6-7: PAGE 8: PAGE 9: PAGE 10-11: PAGE 12: COVER TABLE OF CONTENTS DISCLAIMER INVESTMENT TENANT LEASE OVERVIEW SITE PLAN AERIAL PHOTO PROPERTY PHOTOS LOCATION OVERVIEW IPO PRESS RELEASE LOCATION MAPS DEMOGRAPHICS SUBJECT PROPERTY Disclaimer EXP Realty Advisors, Inc. ( Agent ) has been engaged as an agent for the sale of the property located at by the owner of the Property ( Seller ). The Property is being offered for sale in an as-is, where-is condition and Seller and Agent make no representations or warranties as to the accuracy of the information contained in this Offering Memorandum. The enclosed materials include highly confidential information and are being furnished solely for the purpose of review by prospective purchasers of the interest described herein. The enclosed materials are being provided solely to facilitate the prospective investor s own due diligence for which it shall be fully and solely responsible. The material contained herein is based on information and sources deemed to be reliable, but no representation or warranty, express or implied, is being made by Agent or Seller or any of their respective representatives, affiliates, officers, employees, shareholders, partners and directors, as to the accuracy or completeness of the information contained herein. Summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of some of the principal provisions contained therein. Neither the Agent nor the Seller shall have any liability whatsoever for the accuracy or completeness of the information contained herein or any other written or oral communication or information transmitted or made available or any action taken or decision made by the recipient with respect to the Property. Interested parties are to make their own investigations, projections and conclusions without reliance upon the material contained herein. Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. Seller and Agent each expressly reserves the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time, with or without notice. This offering is made subject to omissions, correction of errors, change of price or other terms, prior sale or withdrawal from the market without notice. Agent is not authorized to make any representations or agreements on behalf of Seller. Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing additional investigation and/or making an offer to purchase the Property unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered, and approved by Seller and any conditions to Seller s obligations hereunder have been satisfied or waived. By taking possession of and reviewing the information contained herein, the recipient agrees that (a) the enclosed materials and their contents are of a highly confidential nature and will be held and treated in the strictest confidence and shall be returned to Agent or Seller promptly upon request; and (b) the recipient shall not contact employees or tenants of the Property directly or indirectly regarding any aspect of the enclosed materials or the Property without the prior written approval of the Seller or Agent; and (c) no portion of the enclosed materials may be copied or otherwise reproduced without the prior written authorization of Seller and Agent. 2
Investment overview PRICE: $2,703,000 CAP RATE: 6.75% NET OPERATING INCOME: $182,392 BUILDING AREA: 6,514+ Square Feet Lease overview Initial Lease Term: 10-Years*, Plus 4, 5-Year Options to Renew Rent Commencement: September 2013 Lease Expiration: September 2023 Lease Type: NNN LAND AREA: 1.2+ Acres Rent Increases: 10% in Lease Year 6 & Every Option Period YEAR BUILT / RENOVATED: 1994 2013 LANDLORD RESPONSIBILITY: None OWNERSHIP: Fee Simple Interest OCCUPANCY: 100% Tenant overview Guarantor: First Choice ER, LLC Year 1-5 Annual Rent (Current): $182,392 Year 6-10 Annual Rent: $200,631 Year 11-15 Annual Rent (Option 1): $220,694 Year 16-20 Annual Rent (Option 2): $242,776 Year 21-25 Annual Rent (Option 3): $267,074 Year 26-30 Annual Rent (Option 4): $293,781 *Tenant Has Right To Terminate At End Of Year 7 With 6 Months Prior Notice www.fcer.com First Choice Emergency Room is based in Lewisville, TX and is the leading freestanding emergency room system; it is both the largest and the oldest. First Choice Emergency Room is revolutionizing the delivery of emergency medical services for adult and pediatric emergencies, both major and minor. First Choice Emergency Room facilities are innovative, freestanding, and fully equipped emergency rooms with state of the art diagnostic technology (CT Scanners, Ultrasound, Digital X-ray) and on-site labs. All First Choice Emergency Room locations are exclusively staffed with board-certified emergency physicians and emergency trained registered nurses. With locations in Houston, Dallas/Fort Worth, Austin, and Colorado Springs, patients receive high-quality care and have an alternative to today s overburdened hospital system. Inc. Magazine ranked First Choice as one of the fastest growing businesses in the U.S. in 2010, 2011, and 2012. The company SUBJECT was named PROPERTY as one of the 2013 Best Companies to Work for in Texas. The company s current growth plans are backed by Sterling Partners, which has invested PRIOR $59 million TO PANDA in theexpress business. EXPANSION First Choice generated $78.2 million in revenue in 2012, up from $37 million in 2008. First Choice was established in 2002 by Dr. Jack Novak, and Thomas S. Hall is the company s current CEO. First Choice plans to build more Freestanding Emergency Rooms, as stated in 2012. The company has plans to invest over $100 million over the next few years by developing many more facilities. As stated in a Dallas Morning News article in March 2013, CEO Tom Hall stated that First Choice plans to add 6 to 8 new DFW facilities in the next 12 to 18 months. 3
Site plan 4
Aerial photo Gus Thomasson Road (24,794 Cars / Day) Kimbrough Middle School Eastfield College Town East Mall Poteet High School TH McDonald Middle School 5
Property PHoto 6
Property PHoto 7
Location overview IMMEDIATE TRADE AREA First Choice Emergency Room is located along Gus Thomasson Road (24,794 Cars / Day) on the southern side of the intersection with N Town E Blvd. Gus Thomasson is a main north/south arterial road in Mesquite that is directly accessible via Interstate 30 (122,837 Cars / Day). Interstate 30,.8 miles from the subject property, is a major east/west thoroughfare that leads commuters east to Dallas (12 Miles) and west to Rockwall (15 Miles), while Interstate 635 (167,311 Cars / Day),.7 miles from the subject property, also provides traffic to the immediate area via N Town E Blvd and is a major north- west/south-east thoroughfare that connects commuters to Lake Highlands, north and Balch Springs, south. Major area retailers include Macy s, Dillard's, Sears, JC Penny, Kroger, Minyard s Food Store, 7-Eleven, Subway, Wendy, Red Lobster, Outback Steakhouse, Olive Garden, TGI Friday s, and Whataburger. The immediate trade area is predominately composed of multi-family communities, retail space, and office buildings. Directly across from the subject property, to the east of Interstate 635, is Town East Mall (1,220,000 SF), a huge draw for Dallas Ft. Worth residents and a large contributor to the local retail market. MESQUITE, TX Mesquite has long been recognized as a major retail area within the Dallas/Fort Worth Metroplex. From the construction of Big Town Mall in 1968, retail space in Mesquite has grown to over 4 million square feet of retail space. More than 6 million square feet of total business space along with 2 restaurant rows offering over 30 restaurants and 42 movie screens have solidified Mesquite s reputation as a retail, restaurant, and entertainment destination. The robust industrial sector in Mesquite provides the local economy with a sound foundation. The Skyline Industrial Park, located 4 miles south of the subject property, is over 300-acres in size and is home to the largest concentration of industries on the east side of the Metroplex. Companies with operations in this complex range in size from small manufacturers employing fewer than 10 people to industrial stalwarts such as United Parcel Service that employ over 2,000 people. Additionally, Union Pacific Railroad operates an intermodal operation within the Skyline Industrial Park which is one of the largest intermodal facilities in the country. The convenience and shipping economies of scale provided by the intermodal suite is an inner ring suburb of Dallas, with a population of 139,824. facility amplify the desirability of the Skyline Industrial Park. In order to meet demand for operating space, recent projects have added over 3.5 million square feet of industrial and office space. A 500-acre business park is under development at the intersection of I-20 and the future State Highway 190 / Loop 9 interchange. The Dallas Business Journal named the Skyline Business Park the winner of the Best New Industrial Project 2000. The industrial ascendancy of Mesquite is due in large part to its opportune location. The city is served by 5 major highways: I-20, I-30, I-635, State Highway 352, and U.S. Highway 80. DALLAS-FORT WORTH-ARLINGTON MSA The Dallas Fort Worth Arlington Metropolitan Statistical Area encompasses 12 counties within the U.S. state of Texas. It is the economic and cultural hub of the region commonly called North Texas or North Central Texas and is the largest land-locked metropolitan area in the United States. The 2010 U.S. Census has the Dallas-Fort Worth Metroplex at 6,371,773. During the 12-month period from July 2008 to July 2009, the Dallas-Fort Worth- Arlington metropolitan area gained 146,530 new residents, more than any other metropolitan area in the United States. The area's population has grown by about one million since the last census was administered in 2000. The Dallas Fort Worth Arlington MSA is, by population, the largest metropolitan area in Texas, the largest in the South, the fourth-largest in the United States, and the tenth largest in the Americas. The metropolitan area has the sixth largest gross metropolitan product (GMP) in the United States, and approximately tenth largest by GMP in the world. Dallas and its suburbs have one of the highest concentrations of corporate headquarters in the United States. As such, one of the largest industries in the Metroplex is conducting business. The Metroplex also contains the largest Information Technology industry base in the state (often referred to as Silicon Prairie or the Telecom Corridor), due to the large number of corporate IT projects and the presence of numerous electronics, computing and telecommunication firms such as Texas Instruments, HP Enterprises Services, Dell Services, i2, AT&T, Ericsson, CA and Verizon in and around Dallas. On the other end of the business spectrum, and on the other side of the Metroplex, the Texas farming and ranching industry is based in Fort Worth. Several major defense manufacturers, including Lockheed Martin, Bell Helicopter Textron, and Raytheon, maintain significant operations in the Metroplex. ExxonMobil, the #1 corporation on the Fortune 500 listings, is headquartered in Irving, Texas. 8
IPO PRESS RELEASE First Choice Emergency Room has tapped Goldman Sachs Group Inc and Deutsche Bank AG to prepare an initial public offering that could come in the second quarter of this year, people familiar with the matter said on Friday. First Choice, the largest freestanding emergency room network in Texas and backed by private equity firm Sterling Partners, is the latest in a string of private equity-owned healthcare services companies looking to go public this year. Representatives for First Choice, Sterling Partners and Goldman Sachs did not immediately respond to requests for comment. Deutsche Bank declined to comment. First Choice, founded in 2002 and headquartered in Lewisville, Texas, had around $100 million of revenues in 2012. It offers emergency medical services for adult and pediatric patients, and has locations in Houston, Dallas/Fort Worth, Austin and Colorado Springs. The company, which competes against traditional hospital emergency rooms, says its facilities are equipped to serve both major and minor emergency needs, and its business model helps cut down on patient wait times. Oran, Olivia, and Soyoung Kim. "First Choice Emergency Hires Goldman, Deutsche for IPO -sources." Reuters. Thomson Reuters, 09 Apr. 0011. Web. 17 Apr. 2014. 9
Location map 10
Location map 11
Demographics Demographic snapshot Radius 1 Mile 3 Mile 5 Mile Population: 2017 Projection 12,392 120,204 327,107 2012 Estimate 11,862 115,366 315,148 2010 Census 11,751 114,379 312,966 Growth 2012-2017 4.50% 4.20% 3.80% Growth 2010-2012 0.90% 0.90% 0.70% Households: 2017 Projection 4,550 42,474 113,550 2012 Estimate 4,419 41,065 110,158 2010 Census 4,402 40,761 109,489 Growth 2012-2017 3.00% 3.40% 3.10% Growth 2010-2012 0.40% 0.70% 0.60% DOWNTOWN DALLAS, TX Owner Occupied 2,066 21,366 60,968 Renter Occupied 2,353 19,700 49,190 2012 Avg Household Income $60,172 $57,167 $56,644 2012 Med Household Income $46,793 $42,815 $41,708 2012 Per Capita Income $22,439 $20,423 $19,985 2012 Households by Household Inc: Income Less than $15,000 382 4,822 14,724 Income $15,000 - $24,999 504 5,603 15,006 Income $25,000 - $34,999 681 5,380 14,491 Income $35,000 - $49,999 767 7,754 20,208 Income $50,000 - $74,999 991 8,312 21,479 Income $75,000 - $99,999 530 4,069 10,177 Income $100,000 - $149,999 371 3,533 9,483 Income $150,000 - $199,999 103 724 2,173 Income $200,000+ 89 867 2,416 TOWN EAST MALL, MESQUITE, TX 12