offering memorandum wellstar medical center...2024 - 3.00% expense assumptions growth rates...

WellStar Medical CenterOFFERING MEMORANDUM

4480 North Cooper Lake Road SE Smyrna, Georgia 30082

This Offering Disclaimer was prepared by Ackerman &

Co. solely for the use of prospective purchasers of the

real property listed in this offering. Neither the Broker

nor (“Owner”) makes an representation or warranty,

express or implied, as to the completeness or accuracy

of the material contained in the Offering Memorandum

Prospective purchasers of the Property are advised (i)

that changes may have occurred in the physical or

financial condition of the Property since the time this

Offering Memorandum was prepared and (ii) that the

projections contained herein were made by Broker and

not by Owner and are based upon assumptions of events

beyond the control of Broker and Owner, and therefore

may be subject to variation. No representation is made

by Ackerman & Co. or the Owner as to the accuracy or

completeness of the information contained herein, and

nothing contained herein is or shall be relied on as a

promise or representation as to the future performance of

the Property. Although the information contained herein

is believed to be correct, the Owner and its employees

disclaim any responsibility for inaccuracies, and expect

prospective purchasers to exercise independent

due diligence in verifying all such information.

Further, Ackerman & Co., the Owner and its employees

disclaim any and all liability for representations and

warranties, expressed and implied, contained in or

for omissions from the Memorandum or any other

written or oral communication transmitted or made

available to the recipient. Analysis and verification of

the information contained in the Offering Memorandum

is solely the responsibility of the prospective purchaser.

This Offering Memorandum is confidential. By accepting

the Offering Memorandum, you agree (i) that you will hold

and treat the Offering Memorandum and its contents in

the strictest confidence, (ii) that you will not photocopy

or duplicate any part of the Offering Memorandum, (iii)

that you will not disclose the Offering Memorandum or

any of its contents to any other entity without the prior

authorization of the Owner, and (iv) that you will not

use the offering Memorandum in any fashion or manner

detrimental to the interest of the Owner or Broker.

CONFIDENTIAL DISCLAIMER

01 EXECUTIVE SUMMARY Investment Summary Property Aerials Property Photographs Property Overview

02 TENANT OVERVIEW Tenant Summary Rent Roll

03 FINANCIAL OVERVIEW Financial Assumptions In-place Income Schedule

Table Of ContentsWELLSTAR MEDICAL CENTER

CONTACT

ANDREW MURPHY Ackerman Medical Senior Vice President, Investment Sales 770.913.3950 | [email protected]

WellStar Medical Center

EXECUTIVE SUMMARY Investment Summary Property Aerials Property Photographs Property Overview

01

WELLSTAR MEDICAL CENTER 5

INVESTMENT SUMMARY

Ackerman & Co.’s Healthcare Investment Sales Team is pleased to exclusively present this opportunity to acquire the WellStar Medical Center located in Atlanta, GA. This Class “A” asset is 14,218 square feet and is 100% leased.

WellStar Medical Center is 68% occupied by WellStar Hospital. WellStar hasthe following practices in the building: WellStar Urgent Care, WellStar Allergy & Immunology, and WellStar Rheumatology.

The tenants enjoy a successful practice because of the locations strong demographics, superior payer mix in the area, and the large patient basewithin the market.

Investment Highlights: • Exceptional Credit - WellStar Hospital• Superior Location and High Barriers to Entry• Strategic Location for WellStar Hospital• New Construction / Limited Physical Responsibilities

Exceptional Credit – WellStar Hospital

WellStar Medical Center, located in Atlanta, Georgia is leased primarily to WellStar Hospital, an not-for-profit healthcare leader for patients living in all areas of Atlanta. WellStar is one of the largest employers in the Atlanta area with 12,000 employees and services roughly 600,000 patients a year. WellStar currently operates five hospitals in the Atlanta area and their Cobb location is just down the road from the WellStar Medical Center.

01 Executive Summary

Square Footage: 14,218 SF

Occupancy: 100%

Purchase Price: $3,400,000

NOI: $276,548

Cap Rate 8.13%

Debt Structure: Market, Free and Clear

INVESTMENT OVERVIEW:


Paces Ferry Rd NW

Atlanta Rd SE

Windy Hill Rd SE

Rid

ge Rd

C

umbe

rlan

d

Pwky

SE

East-West Con nector

S Cobb Dr

S Cobb Dr

Cobb Pkwy

3

41

285

285 75

75

280

WELLSTAR MEDICAL CENTER4480 NORTH COOPER LAKE SMYRNA, GEORIGA 30082

INVESTMENT SUMMARY, CON’T.


Superior Location and High Barriers to Entry

WellStar Medical Center is located in the heart of many new and expanding subdivisions in the west Cobb County area. Within a five mile radius, the population is over 195,000 comprised of 76,000 households. That being said, WellStar Medical Center is services the medical needs of this in-town, affluent submarket with an outstanding payer mix.

WellStar Medical is located on the East-West Connector and is highly visible with a traffic count of over 35,000 cars per day. The East-West Connector is a heavily traveled highway allowing quick and easy access from surrounding major submarkets. With such quality visibility and superior access, Wellstar medical center is one of the premier medical office buildings servicing patients in this area.

Strategic Location for Well Star Hospital

WellStar Medical Center has been identified by WellStar as both a strategic location for their healthcare brand and a location that can service a strong patient base. In fact, the immediate area surrounding the building has been recognized for its superior demographics and its outstanding patient base. This location is one of five hospital locations in which Well Star has focused on its efforts to growing their already expansive healthcare presence. Well Star has committed themselves to the building in a number of ways – one being the substantial capital invested by the hospital and secondly, their desire to expand their foothold in this bustling market.

New Construction / Limited Physical Responsibilities

WellStar Medical Center is a Class A medical office building that was built in 2007 and sits on 1.017 acres. Recently constructed, this asset will require minimal capital exposure over the hold period due to the current age of the building and the superior construction. The building is two-stories, brick and glass with a steel frame.


RESIDENTIAL

RESIDENTIAL

WELLSTAR MEDICAL CENTER 4480 NORTH COOPER LAKE RD SE SMYRNA, GEORGIA 30082 N Cooper Lake Rd

East-West Connector

Coop

er L

ake

Rd

East-West Connector

PROPERTY AERIAL



PROPERTY OVERVIEW


Location: NE corner of East-West Connector and North Cooper Lake Road Smyrna, GA 30082

Address: 4480 North Cooper Lake Road SE Smyrna GA 30082

Building Size: 14,218 SF, 2-story all-brick medical building

Year Built: Constructed in 2007

Major Tenants:WellStar Allergy & Immunology CenterWellStar Urgent CareWellStar Rheumatology

Occupancy: 100%

Location Summary:

WellStar Medical Center fronts the East-West Connector in Cobb County. The East-West Connector is a divided lane highway designed to give commuters from West Cobb quicker access to Interstate 75, Marietta GA, and the Cumberland Mall Area.

Area Hospitals:

WellStar Medical is located approximately three miles south of WellStar’s Cobb County Hospital at Austell Road. The property also is in the vicinity of Emory Adventist Hospital, which is located two miles away on South Cobb Drive.


PROPERTY PHOTOGRAPHS



TENANT OVERVIEW

Tenant and Hospital Summary Rent Roll

02


TENANT AND HOSPITAL SUMMARY

WELLSTAR HOSPITAL

Well Star is a not-for-profit healthcare provider with over 11,000 medical professionals to meet the health demands of the ever expanding population needs.

For more than half a century and three generations, WellStar has grown to a superior network and has received accolades from some of healthcare’s top organizations such as the Joint Commission on Accreditation of Healthcare Organizations (JCAHO).

In Atlanta, WellStar Health Systems provides quality healthcare to the northwest portion of the city in Bartow, Cherokee, Cobb, Douglas, and Paulding counties. Hospitals in these counties include WellStar Cobb Hospital in Austell,WellStar Douglas Hospital in Douglasville, WellStar Kennestone Hospital in Marietta, WellStar Paulding Hospital in Dallas, and WellStarWindy Hill Hospital in Marietta.

In close proximity to these Hospitals, satellite health care providers such as WellStar Unguent Care, WellStar Allergy & Immunology Center, WellStar Physicians Groups,WellStar ObGyn and other WellStar specialists are located to provide medical care to the neighborhoods surrounding the Hospitals.

The Atlanta WellStar has been consistently spotlighted by leading publications and organizations, including:

• “Atlanta’s Top 25 Employers” by the Atlanta Business Chronicle• “Top Companies forWomen in 2006” by Woman Magazine• “Top 100 Integrated Health Networks” by Modern Healthcare Magazine and Verispa

02 Tenant Overview


RENT ROLL

02 Tenant Overview

TENANT NAMETYPE & SUITE NUMBER

LEASE DATE & TERM

FLOOR SQUARE FEET

BUILDING SHARECHANGES ON CHANGES TO

CPI & CURRENT PORTERS’ WAGEMISCELLANEOUS

MONTHS TOABATE

PENT TO ABATE

DESCRIPTION OF OPERATING EXPENSE

REIMBURSEMENTS

IMPRVMNTS RATE

AMOUNT

COMMSSNS RATE

AMOUNT COMMENTS

Well Star Urgent Care Office, Suite: 100

Jan-2007 to Dec-2016 120 Months

5,00035.17% Jan-2014 $22.97

- - - Modified Gross - -

One year renewal option - all termination options have

been removed from the lease

Well Star Allergy & Immunology

Office, Suite: 101 Jan-2007 to Dec-2016

120 Months

2,11014.84%

Jan-2014 $26.80 - - - Modified Gross - -One year renewal option -

all termination options have been removed from the lease

Well Star RheumatologyOffice, Suite: 201

Apr-2008 to Dec-2016 105 Months

2,52617.77%

Jan-2014 $26.26 - - - Modified Gross - - One year renewal option -

all termination options have been removed from the lease

Patrick Family DentistOffice, Suite: 210

Jun-2008 to Nov-2018 126 Months

2,69218.93%

Dec-2013 Dec-2014 Dec-2015 Dec-2016 Dec-2017

$23.34 $23.80 $24.28 $24.76 $25.26

- - - Base Year Stop - - None


RENT ROLL, CON’T.

02 Tenant Overview

TENANT NAMETYPE & SUITE NUMBER

LEASE DATE & TERM

FLOOR SQUARE FEET

BUILDING SHARECHANGES ON CHANGES TO

CPI & CURRENT PORTERS’ WAGEMISCELLANEOUS

MONTHS TOABATE

PENT TO ABATE

DESCRIPTION OF OPERATING EXPENSE

REIMBURSEMENTS

IMPRVMNTS RATE

AMOUNT

COMMSSNS RATE

AMOUNT COMMENTS

Physicians Weight LossOffice, Suite: 220

Oct-2007 to Jan-2016 100 Months

1,43610.09%

Nov-2013 May-2014 May-2015

$26.50 $27.49 $28.50

- - - Base Year Stop - - None

Physicians Weight LossOffice, Suite: 221

Sep-2009 to Jan-2016 77 Months

4543.19%

Oct-2013 $22.50 - - - Base Year Stop - - None


FINANCIAL OVERVIEW Financial Assumptions In-place Income Schedule

03


GLOBAL

Analysis Period

Commencement Date January 1, 2014

End Date December 31, 2023

Term 10 Years

Area Measures

Building Square Footage (RSF) 14,218 SF

Consumer Price Index (CPI) 3.00%

Vacancy Loss[1] 5.00%

REVENUE ASSUMPTIONS

Market Rent Growth

2015 - 3.00%2016 - 3.00%2017 - 3.00%2018 - 3.00%2019 - 23.00%

2020 - 3.00%2021 - 3.00%2022 - 3.00%2023 - 3.00%2024 - 3.00%

EXPENSE ASSUMPTIONS

Growth Rates

Operating Expenses 2.00%

Capital Reserves 2.00%

Property Taxes 2.00%

Property Taxes Reassessed No

Management Fee (% of EGR) 3.00%

Operating Expense Source 2014 P&L

2014 Capital Reserves $0.10 PSF

MARKET LEASING - 2ND GENERATION

Retention Ratio 80%

Lease Term 7 Years

2014 Annual Market Rent

Suites 101, 201 $30.00 PSF

Suites 100, 220 $28.00 PSF

Suites 210, 221 $24.00 PSF

Rent Adjustment 2.00% Annually

Expense Recovery Type Gross

2014 Tenant Improvements

New $19.00 PSF

Renewal $8.00 PSF

Weighted Average $10.20 PSF

Commissions

New 6.00%

Renewal 3.00%

Weighted Average 3.60%

Downtime

New 6 Month(s)

Weighted Average [2] 1 Month(s)

WELLSTAR MEDICAL CENTER 1603 Financial OverviewFINANCIAL ASSUMPTIONS

TENANT SQUARE FEETLEASE

COMMENCEMENTLEASE

TERMINATION 2014

BASE RENT PSF2014

BASE RENT

2014 OPER. EXP.

RECOVERIES

2014GROSS RENT

Well Star Urgent Care 5,000 1/07 12/16 $22.97 $114,850 $14,925 $129,775

Well Star Allergy & Immunology 2,110 1/07 12/16 $26.80 $56,548 $6,299 $62,847

Well Star Rheumatology 2,526 4/08 12/16 $26.26 $66,333 $7,541 $73,874

Patrick Family Dentistry 2,692 6/08 11/18 $23.38 $62,934 $62,934

Physicians Weight Loss Clinic 1,436 10/07 1/16 $27.16 $39,002 $3,589 $42,591

Physicians Weight Loss Clinic 454 9/09 1/16 $22.50 $10,215 $10,215

Total 14,218 $349,882 $32,354 $382,236

Vacant 0WellStar Electrical & Real Estate TaxReimbursement

$51,192

Total Square Footage 14,218 Effective Gross Income $433,428

Vacancy Loss ($8,347)

EXPENSES

Operating Expenses

Property Taxes 49,215

Insurance 3,104

Jaintorial Service 8,528

Trash Removal 2,676

Elevator Maintenance 2,990

HVAC Maintenance 1,968

Electrical Maintenance 300

Fire & Life Safety 1,060

Pest Control 540

Landscaping 8,200

Electricity 48,500

Water/Sewer 4,800

Telephone/Internet 3,900

Management Fee 12,752

Total Expenses ($148,533)

Net Operating Income $276,548

offering memorandum wellstar medical center...2024 - 3.00% expense assumptions growth rates...

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