Net Lease Medical Property For Sale

Rockford Health Physicians & Athletico Physical Therapy1747 Henry Luckow Lane | Belvidere, IL 61008

NET LEASE INVESTMENT OFFERING

TABLE OF CONTENTS

I. Executive Profile Executive Summary

Investment Highlights

Property Overview

III. Location Overview Photographs

Site Plan

Aerial

Maps

IV. Market & Tenant Overview Demographic Report

Market Overview

Tenant Overview

TABLE OF CONTENTS


II. Financial Overview Rent Roll

ProForma Analysis

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 The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group.

This Offering Memorandum has been prepared to provide summary, unverified 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. The Boulder Group has not made any investigation, and makes no warranty or representation.

The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group 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.

DISCLAIMERSTATEMENT:

DISCLAIMER STATEMENT



EXECUTIVESUMMARY:

The Boulder Group is pleased to exclusively market for sale a fully leased two-tenant property located in Belvidere, Illinois, approximately ten miles east of downtown Rockford. The property is a net leased investment occupied by Rockford Health Physicians and Athletico Physical Therapy. Rockford Health is a subsidiary of MercyRockford Health System, an investment grade rated company (Moody’s: A3).

The 10,135 square foot building was constructed in 2015 to accommodate the two tenants. The property is located on Henry Luckow Lane just northwest of the signalized intersection of State Street and Appleton Road, two primary thoroughfares in the area that experience traffic counts in excess of 34,000 VPD. State Street, which turns into US-20, gives direct access to downtown Rockford. The property is located in a heavily populated area with over 28,000 people living within a three mile radius. Retailers located in the immediate trade area include NAPA Auto Parts, Shopko, BMO Harris Bank, Arby’s, Culver’s, Pizza Hut, McDonald’s AutoZone and O’Reilly Auto Parts.

Rockford Health recently executed a 10 year lease that features two 5-year renewal options and 2.5% annual rental escalations in the primary and renewal periods. Athletico recently executed a 7 year lease that features two 5-year renewal options and 2% annual rental escalations in the primary and renewal periods.

The Rockford Health System, located in Rockford, Illinois, is the largest health system serving northern Illinois and southern Wisconsin. Their physicians and health care professionals exceed national benchmarks for quality patient care in such areas as childhood and adult immunizations, diabetes care, prenatal and postnatal care, and breast and cervical cancer screenings. This location is focused on providing primary care physicians, a variety of specialists and same-day/walk-in appointment options. As of December 16, 2014, Rockford Health Systems, Inc. operates as a subsidiary of MercyRockford Health, an investment grade rated company (Moody’s: A3).

Athletico Physical Therapy is in the field of physical therapy, orthopedic rehabilitation, sports medicine and athletic training. Athletico began in Chicago in 1991 and today has over 330 facilities throughout Arizona, Illinois, Indiana, Iowa, Michigan, Missouri, Ohio, South Dakota and Wisconsin, and employs over 4,000 clinical and administrative staff, and offers more than 40 specialty rehabilitation, outreach, and fitness services.

EXECUTIVE SUMMARY


INVESTMENT HIGHLIGHTS:

• Located in the Rockford MSA

• Newly constructed building

• Annual rental escalation in both primary and renewal terms

• Tenants are industry leaders

• Rockford Health is a subsidiary of MercyRockford Health System, an investment grade rated company (Moody’s: A3)

• Strategic location off of State Street and Appleton Road, two primary thoroughfares

• Approximately 28,000 people living within a three mile radius of the property

• Average household income within a 5 mile radius is in excess of $80,000

• Over 60% of the rental income comes from an investment grade tenant

INVESTMENT HIGHLIGHTS


PROPERTY OVERVIEW:

PROPERTY OVERVIEW

Price: $2,640,600

Cap Rate: 6.35%

Year Built: 2016

Lease Type: NNN*

Rentable Square Feet 10,135 SF

*Replacement of items identified as capital expenses can be amortized over its useful life and included in the operating expenses for each year.

RENTROLL:

Tenant Square Feet

Commencement Date

Expiration Date

Options Annual Rent

Rent Escalations

Step-Up Date

CAM/TAX/INS

Athletico 3,250 11/6/2015 11/30/2022 Two 5-Year $59,5043 2% Annually Initial Term NNN2% Annually Option 12% Annually Option 2

Rockford Health 6,885 4/27/2015 4/31/2025 Two 5-Year $108,142 2.5% Annually Initial Term2 NNN1

2.5% Annually Option 12.5% Annually Option 2

Total 10,135 $165,008

1) CAM for Rockford Health includes a management fee equal to 3% of Gross Rents (Base Rent, CAM, Real Estate Taxes and Insurance). CAM for Athletico includes a management fee equal to 10% of CAM and Insurance.

2) Rockford Health rent as of 5/1/2017. Should closing occur prior to 5/1/2017, seller to credit the rent differential to buyer.

3) Athletico rent as of 12/1/2016.


PRO FORMA:

PRO FORMA

P.S.F.Income

Base Rent $16.54 $167,646

Recoveries

CAM1 $1.77 $17,959 Real Estate Taxes 3.32 33,641 Insurance 0.15 1,506 Total Recoveries $5.24 $53,106

Gross Rental Income $21.78 $220,752

Vacancy Allowance (0%) 0.00 $0 Effective Gross Income $21.78 $220,752

Expenses2

CAM ($1.31) $(13,255)Taxes (3.32) (33,641)Insurance 0.10 (1,506)

Management Fee at 3.0%3 (0.65) (6,623)Total Expenses ($5.43) $(55,025)

Net Operating Income $16.35 $165,727

1) CAM for Rockford Health includes a management fee equal to 3% of Gross Rents (Base Rent, CAM, Real Estate Taxes and Insurance). CAM for Athletico includes a management fee equal to 10% of CAM and Insurance.

2) Based on 2016 expenses

3) Based on 3% of the Effective Gross Income.


PHOTOGRAPHS


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SITE PLAN

H E N R Y L U C K O W R O A D

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MAPS


MAPS

Lake Michigan

DEMOGRAPHICREPORT:

DEMOGRAPHIC REPORT

Population 1-Mile 3-Mile 5-Mile

Total Population 4,283 28,381 41,319

Total Households 1,375 9,859 14,277

Income 1-Mile 3-Mile 5-Mile

Average Household Income $47,855 $65,968 $80,054

MARKET OVERVIEW

MARKETOVERVIEW:

BelvidereBelvidere, which means “beautiful to view”, is a city in north central Illinois and part of the Rockford Metropolitan Statistical Area. Belvidere is 10 miles from downtown Rockford and 75 miles from downtown Chicago on U.S. Routes 20 and Interstate 90 (the Northern Illinois Toll road).

The Interstate 90 is a major interstate and intrastate transportation route. There is currently access from the Tollway at the Genoa / Belvidere Road exit. Freight rail service is provided by the Union Pacific on tracks crossing the County from east to west passing through Garden Prairie and the City of Belvidere. The Poplar Grove Airport is a local airport serving the surrounding communities. Chicago’s O’Hare Airport, a national and international hub, is located approximately 55 miles from the City of Belvidere on Interstate 90. The Rockford Airport, a Midwest regional UPS air-freight hub, is a short 20 miles to the west of Belvidere. Rockford Airport also offers limited national and international passenger service on various carriers.

Belvidere has an industrial community surrounded by prosperous farms. It is the County Seat with a population of over 52,000 people. Cultural facilities in Belvidere include the Community Building Complex, and the Baltic Mill, both of which host a wide variety of concerts, theatrical events, etc. Belvidere is also the home of the Boone County Historical Museum and the Pettit Memorial Chapel designed by renowned architect Frank Lloyd Wright.

RockfordRockford is the third largest city in the State of Illinois and the 171st most populous state in the United States. It is the county seat of Winnebago County and is located along the Rock River in northern Illinois. According to the 2010 census data, Rockford itself had a population of 152,871 with an outlying metropolitan area population of 348,360.

Referred to as the Forest City, Rockford is known for various venues of cultural and historical significance, including Anderson Japanese Gardens, Klehm Arboretum, Tinker Swiss Cottage, the BMO Harris Bank Center, the Coronado Theatre, the Laurent House and the Burpee Museum of Natural History. Moreover, its contributions to music are noted in the Mendelssohn Club, the oldest music club in the nation, with performers such as Phantom Regiment and Cheap Trick.

Settled between 1834 and 1835, Rockford was strategically positioned between Chicago and Galena and thus became suitable for industrial development. Rockford was notable for its output of heavy machinery and tools and by the twentieth century, it was the second leading center of furniture manufacturing in the nation. The city later transformed through economic diversification into automotive, aerospace and healthcare industries, as well as the undertaking of various tourism and downtown revitalization efforts. Today the city is thriving. The largest employers in Rockford include Rockford Public School District (4,800 employees), Chrysler Assembly Plant (4,700), Rockford Health System (2,500) and UTC Aerospace Systems (2,200).

TENANT OVERVIEW

The Rockford Health SystemThe Rockford Health System is the largest and most comprehensive health system serving northwestern Illinois and southern Wisconsin, providing nearly 1 million patient encounters a year through Rockford Memorial Hospital, Rockford Health Physicians, the Visiting Nurses Association, and Van Matre HealthSouth Rehabilitation Hospital. In addition to its leading programs in adult, neonatal, maternal and pediatric critical care, Rockford Memorial Hospital also is distinguished by its numerous quality award recognitions, including being a six-time recipient of the HealthGrades Patient Safety Excellence Award and having been named for three consecutive years to the U.S. News & World Report list of “Best Regional Hospitals.

On December 16, 2014, The Rockford Health System became a subsidiary of MercyRockford Health System to create a multi-regional health system comprising five hospitals, more than 550 physicians, and 80 outpatient clinics and other service sites that provide care to residents in more than 40 communities. MercyRockford Health System is an investment grade rated company (Moody’s: A3).

The Mercy Health System is a not-for-profit, vertically integrated, multi-specialty health system serving more than one million individuals through its 70 facilities in 29 southern Wisconsin and northern Illinois communities. Over the last 25 years, Mercy has grown from a stand-alone community hospital with no employed physicians into a comprehensive, vertically integrated health system offering an extensive network of primary and specialty care physicians, three hospitals, subspecialty centers of excellence, insurance products, long-term care, retail services, and preventive health and wellness programs. Today over 400 multi-specialty physicians are completely integrated W2 partners in addition to Mercy’s 4,000 employees, who are called partners. Mercy Health System is proud to be the first and only vertically integrated health care system in the U.S. to receive the Malcolm Baldrige National Quality Award, the nation’s highest presidential honor for quality and organizational excellence. Mercy Health System is one of a few organizations in the country to have received Magnet for the entire health care system including all components of our organization. Mercy Health System is headquartered in Janesville, Wisconsin.

TENANT OVERVIEW:

TENANT OVERVIEW

Athletico Physical TherapyAthletico Physical Therapy is Chicagoland’s specialists in the field of physical therapy, orthopedic rehabilitation, sports medicine and athletic training. Athletico began in Chicago in 1991 and today has over 330 facilities throughout Arizona, Illinois, Indiana, Iowa, Michigan, Missouri, Ohio, South Dakota and Wisconsin, and employs over 4000 clinical and administrative staff, and offers more than 40 specialty rehabilitation, outreach, and fitness services.

Athletico has staff with expertise in treating the worker’s compensation population with such services as work conditioning, functional capacity evaluations, post-offer testing and ergonomic assessments. In addition, Athletico provides athletic training, physical therapy, occupational therapy, and fitness services to affiliations including high schools, colleges, and many professional sports teams.

Athletico provides the following services; complimentary injury screens, physical therapy, occupational/hand therapy, work comp, athletic training outreach, head injury and concussion management, specialized services, specialty techniques, fitness services, home health therapy staffing and golf performance center.

Website: www.athletico.comNumber of Locations: 300+Year Founded: 1991Headquarters: Chicago, IL

TENANT OVERVIEW:

666 Dundee Road, Suite 1801Northbrook, IL 60062

www.bouldergroup.com

Randy [email protected]

Jimmy [email protected]

Net Lease Medical Property For Sale

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