CONFIDENTIAL OFFERING MEMORANDUM

SINGLE-TENANT INVESTMENT OPPORTUNITYB E H A V I O R A L H E A L T H G R O U P

1734 MADISON AVE

Table of Contents

Market Analysis 6

Property Description 16

Tenant Information 18

Financial Projections 24

1734 Madison Avenue (the “Property”), a Class B medical office building comprised of 16,704 SF is a stabilized investment opportunity with unrealized long-term yields. At 100 percent occupancy, the Property is occupied by

a strong, regional tenant, Behavioral Health Group, with 58 locations in 13 states. Located in Memphis’s medical district, the Property is surrounded by state-of-the-art clinical, educational, and research institutions including

St. Jude Children’s Research Hospital, University of Tennessee Health Science Center, Methodist Le Bonheur Healthcare, and Memphis VA Medical Center.

FINANCIAL SUMMARY

Purchase Price $1,600,000

NOI $100,400

Cap Rate 6.28%

Number of tenants 1

ASSET PROFILE

Address 1734 Madison Avenue Memphis, TN 38104

Submarket Midtown

SF 16,704

Site Acreage 1.08

Floors 1

Total Parking Spaces 86

Year completed 1955 (renovated in2012 and 2016)

Occupancy 100%

1734 MADISON AVE

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Market analysis

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Behavioral Health Group (BHG) is a leading provider of opioid addiction treatment services. Treatment centers provide medication-assisted treatment in an outpatient setting. With 58 locations across 13 states, BHG provides services to thousands of individuals and their communities across the country.

Surrounded by other medical district tenants including St. Jude Children’s Research Hospital, The University of Tennessee Health Science Center, Methodist Le Bonheur Healthcare, and Memphis VA Medical Center

The Midtown submarket has experienced a surge of activity in the past ten years with an emphasis on the redevelopment of older properties.

Educated workforce where approximately 31% of the population holds a bachelors de-gree within a one mile radius exceeding both state and national averages

Average household income exceeds the state level by ~14%

Immediate access to restaurant and entertainment options in neighboring Overton Square and Cooper Young districts

Convenient access to the primary transportation networks via Union Avenue, Interstate 40 and Interstate 69

Approximately 27,000 daily traffic count within a 1 mile radius

INVESTMENT HIGHLIGHTS

Single-tenant, double net lease,approximately 13 years remaining

Tenant recently exercised two out of three lease renewal options to extend through April 30, 2032

Currently below submarket rental rates

Current NOI – $100,400

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SUBJECT PROPERTY1734 Madison Avenue

IDEWILD PRESBYTERIAN

CHURCH

COMPASS CHARTER SCHOOL MIDTOWN CAMPUS

UNION AVENUE

MADISON AVENUE

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1 MILE 3 MILES 5 MILES16,141 111,529 220,052

1 MILE 3 MILES 5 MILES$83,477 $53,110 $56,365

DEMOGRAPHICS

St. Jude Children’s Research Hospital - 3.3 miles - 10 minutes

UT Health Science Center - 1.9 miles - 6 minutes

Methodist Le Bonheur Healthcare - 1.7 miles - 5 minutes

Veterans Affairs Medical Center - 1.7 miles - 5 minutes

#1 Pinnacle Bank $1.3 million#2 Ten-Townhome $0.75 million#3 Madison Gardens $2.5 million#4 Madison & McLean $14.0 million#5 The Citizen $33.5 million

~$52 Million in Redevelopment Projects

Population

Average Household Income

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Cla

Building Name Address Building Size (SF) Occupancy Date SoldCap Rate Sale Price Price/SF

Satellite Healthcare 2980 Poplar Avenue 14,087 100% September 2017 6.24% $3,699,951 $263

Davita Dialysis 1205 Marlin Road 5,843 100% August 2017 7.00% $1,252,096 $214

Women's Health Specialists 7800 Wolf Trail Cove 10,800 68% March 2018 8.45% $2,916,000 $270

Recent Comparable Sales

Satellite Healthcare Davita Dialysis Women’s Health Specialists

COMPARABLE SALES

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Clark Ce

1734 MADISON AVE

- Current Property Border

Submarket Inventory Vacancy RateYTD Net

AbsorptionYTD

DeliveriesUnder

ConstructionClass B

Quoted Rents

East 10,194,838 15.8 35,457 0 0 $18.65

Downtown 4,471,033 14.6 79,978 72,000 195,100 $15.42

385 Corridor 4,178,773 12.1 (40,268) 0 0 $17.69

Northeast 2,923,059 14.4 (5,961) 12,750 120,000 $18.12

Airport 2,785,501 29.9 17,892 0 0 $11.88

Midtown 1,706,825 15.2 (5,831) 0 0 $15.46

North 448,127 1.3 - 0 0 $12.26

Total/Average 26,708,156 14.7 81,267 84,750 315,100 $17.35

MEMPHIS OVERALL SUBMARKET CHART

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ProPerty DescriPtion

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Property Specifications Tax Parcel ID 017044 0068C

Building Size 16,704 SF

Year Built 1955 (renovated in 2012 and 2016)

Stories 1 (One)

PARKING

Space Ratio 5.38/1,000 SF

Parking Spaces 86 Parking Spaces

Walk Score 79/100

Bike Score 79/100

ROOF/STRUCTURE

Foundation Concrete slab at grade

Building Frame Masonry

Exterior Walls Concrete tilt panels

Roof Flat / TPO membrane (installed 9/27/2017; under warranty)

UTILITIES

Plumbing Electricity, Water, Gas Provider Memphis, Light, Gas, & Water (MLGW)

HVAC SPECS

Package Units, Heating – Forced warm air, Energy Management – N/A

TAX INFORMATION

Total Appraisal $840,700

Total Assessment $336,280

2019 City Taxes $11,070

2019 County Taxes $13,619

1734 Madison AvenueMemphis, TN 38104

Madison Professional Building

85,250SF Class B MOB

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tenant inforMation

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Suite Tenant Name Square Feet % of Property Begin End Begin Annually PSF

Single-Tenant Behavioral Health Group 16,704 100.00% 5/1/12 4/30/32 Current $100,400 $6.01

May-22 $96,000 $5.75

May-25 $102,000 $6.11

May-28 $108,000 $6.47

Total 16,704 $6.09

Lease Term Rental Rates

LEASE SUMMARY RENT ROLLTenant

Premises

Lease Commencement

Lease Expiration

Renewal Options

Lease Type

Property Taxes

Insurance

Common Area

Roof & Structure

Repairs and Maintenance

HVAC

Utilities

Behavioral Health Group

A building comprised of 16,704 SF

May 1, 2012

April 30, 2032

One five year term remaining

Double Net

Tenant’s Responsibility

Tenant’s Responsibility

Tenant’s Responsibility

Landlord’s Responsibility

Tenant’s Responsibility

Tenant’s Responsibility

Tenant’s Responsibility

Behavior Health Group 58 LOCATIONS IN 13 STATES

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financial Projections

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General Assumptions*

Tax: The State of Tennessee imposes a Franchise Tax (net worth tax) and Excise Tax (net income tax) on all corporations, limited partnerships, and LLC’s doing business in the state. General partnerships, tax-exempt pension funds, and certain family limited partnerships are generally exempt. The franchise tax is 0.25% of the tax basis (cost basis), with certain exclusions and adjustments. The excise portion is 6.5% of “net earnings” – after depreciation and interest expense (or Federal Taxable Income), adjusted to take into account a limited number of statutory adjustments. Investors are advised to consult their own tax advisors as to the applicability and effect of Tennessee F&E Taxes on potential ownership structures for this opportunity. Franchise & Excise Taxes have not been included in the Argus Model. 2019 estimated reimbursables have been combined with an annual expense inflation rate of 2.5% for ExcellRx, Inc. (Enclara).

*Notes on Analysis Analysis/ Reporting Start Date - January 1, 2020

RENTABLE BUILDING AREA SF %

Occupied 16,704 100%

Vacant 0 0%

Total 16,704 100%

START DATE

Analysis Start Date January 1, 2020

Reporting Start Date January 1, 2020

GROWTH RATES

General Growth Rate 2.5%

Operating Expenses 2.5%

Annual Market Rent Growth Rate 2.5%

OPERATING & CAPITAL EXPENSE ASSUMPTIONS

Operating Expense Source Owner Provided Due Diligence Items

Capital Reserves $.10/SF

UNDERWRITING ASSUMPTIONS

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CASH FLOW PROJECTION

For the Year Ending Year 1 (Dec-2020) Year 2 (Dec-2021) Year 3 (Dec-2022) Year 4 (Dec-2023) Year 5 (Dec-2024) Year 6 (Dec-2025) Year 7 (Dec-2026) Year 8 (Dec-2027) Year 9 (Dec-2028) Year 10 (Dec-2029) Year 11 (Dec-2030)

Rental RevenuePotential Base Rent 95,000 95,000 95,667 96,000 96,000 100,000 102,000 102,000 106,000 108,000 108,000

Scheduled Base Rent 95,000 95,000 95,667 96,000 96,000 100,000 102,000 102,000 106,000 108,000 108,000

Total Rental Revenue 95,000 95,000 95,667 96,000 96,000 100,000 102,000 102,000 106,000 108,000 108,000

Total Expense Recoveries 28,289 28,996 29,721 30,464 31,226 32,006 32,807 33,627 34,467 35,329 36,212

Potential Gross Revenue 128,689 129,396 127,188 126,464 127,226 132,006 134,807 135,627 140,467 143,329 144,212

Total Tenant Revenue 123,289 123,996 125,388 126,464 127,226 132,006 134,807 135,627 140,467 143,329 144,212

Effective Gross Revenue 128,689 129,396 127,188 126,464 127,226 132,006 134,807 135,627 140,467 143,329 144,212

Total Other Revenue (Roof Payments) 5,400 5,400 1,800 0 0 0 0 0 0 0 0

Operating Expenses Taxes 24,689 25,306 25,939 26,587 27,252 27,933 28,632 29,347 30,081 30,833 31,604

Common Area Maintenance 3,600 3,690 3,782 3,877 3,974 4,073 4,175 4,279 4,386 4,496 4,608

Total Operating Expenses 28,289 28,996 29,721 30,464 31,226 32,006 32,807 33,627 34,467 35,329 36,212

Net Operating Income 100,400 100,400 97,467 96,000 96,000 100,000 102,000 102,000 106,000 108,000 108,000

10 YEAR PROJECTION

Leasing Costs/Capital Expenditures Total Capital Expenditures 1,670 1,712 1,755 1,799 1,844 1,890 1,937 1,986 2,035 2,086 2,138

Cash Flow Before Debt Service 98,730 98,688 95,712 94,201 94,156 98,110 100,063 100,014 103,965 105,914 105,862

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“Something is happening in Memphis, something is happening in our world.”

– Martin Luther King Jr.

“The many sounds of Memphis shaped my early musical career and

continue to be an inspiration to this day.” – Justin Timberlake

“Memphis is a vibrant and diverse city thatis on the verge of a Real Food

renaissance.” – Kimbal Musk

“Memphis is in a very lucky position on the map. Everything just gravitated to

Memphis for years.” -Steve Cropper

• Located in the middle part of the country• Mississippi River – 5th Largest U.S. Inland Port• I-40 connecting West Coast to East Coast• I-69 connecting Canada to Mexico• Five Class I Railroads – One of only four cities

• Second busiest cargo airport in the World• FedEx World Headquarters• Major Hub for UPS and USPS• 192 million square feet of industrial space

“Mississippi begins in a lobby of a Memphis, Tennessee hotel and extends south to the Gulf of Mexico”

-William Faulkner

Memphis: “America’s Distribution Center”Excelling in the “Four R’s” of distribution infrastructure; “River, Rail, Road & Runway”

Home to 20 Company Headquarters

Logistics Leader -Business Facilities Magazine

Most Generous City -Chronicle of Philanthropy Magazine

Best Cost of Living -CBS News

Busiest Cargo Airport

Among Cities Where Millennials Are Moving -ULI

#1

#1

#2

#2

#4

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INVESTMENT ADVISORLandon Williams, SIOR, CCIM901 362 4306lwilliams@commadv.com

INVESTMENT ADVISORBlake Johnson901 252 6485bjohnson@commadv.com

Cushman & Wakefield Copyright 2019. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question.

Independently Owned and Operated / A Member of the Cushman & Wakefield Alliance

The information contained in this Offering Memorandum is confidential, furnished solely for the purpose of review by a prospective purchaser of 1734 Madison Avenue, Memphis, TN, 38104 (the “Property”) and is not to be used for any other purpose or made available to any other person without the expressed written consent of Cushman & Wakefield Commercial Advisors (C&W/CA) (“The Company”) or the Owner (“Owner”). The material is based in part upon information supplied by Owner and in part upon information obtained by The Company from sources it deems reasonably reliable. Summaries of any documents are not intended to be comprehensive or all inclusive, but rather only an outline of some of the provisions contained therein. No warranty or representation, expressed or implied, is made by Owner, The Company, or any of their respective affiliates, as to the accuracy or completeness of the information contained herein or any other written or oral communication transmitted to a prospective purchaser in the course of its evaluation of the Property. No legal liability is assumed or to be applied in connection with the information or such other communications. Without limiting the generality of the foregoing, the information shall not be deemed a representation of the state of affairs of the Property or constitute an indication that there has been no change in the business or affairs of the Property since the date of preparation of the information. Prospective purchasers should make their own projections and conclusions without reliance upon the materials contained herein and conduct their own independent due diligence, including engineering and environmental inspections, to determine the condition of the Property and the existence of any potentially hazardous material located at the site. This Offering Memorandum was prepared by The Company and has been reviewed by Owner. It contains select information pertaining to the Property and does not purport to be all inclusive or to contain all of the information which a prospective purchaser may desire. All financial projections are provided for general reference purposes only and are based on assumptions relating to the general economy, competition and other factors beyond control and, therefore, are subject to material change or variation. An opportunity to inspect the Property will be made available to qualified prospective purchasers. In this Offering Memorandum, certain documents and other materials are described in summary form. The summaries do not purport to be complete nor, necessarily, accurate descriptions of the full agreements involved, nor do they constitute a legal analysis of such documents. Interested parties are expected to independently review all documents. This Offering Memorandum is subject to prior placement, errors, omissions, changes or withdrawal without notice and does not constitute a recommendation, endorsement or advice as to the value of the Property by The Company or Owner. Each prospective purchaser is to rely upon its own investigation, evaluation and judgment as to the advisability of purchasing the Property described herein. Owner and The Company expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offer to purchase the Property and/or to terminate discussions with any party at any time with or without notice. Owner shall have no legal commitment or obligation to any interested party reviewing this Offering Memorandum or making an offer to purchase the Property unless a written agreement for the purchase of the Property has been fully executed and delivered by Owner and such party and any conditions to Owner’s obligations thereunder have been satisfied or waived and then only to the extent expressly provided for therein. The Company is not authorized to make any representations or agreements on behalf of Owner. This Offering Memorandum is the property of The Company and may be used only by parties approved by The Company and Owner. The Property is privately offered and, by accepting delivery of this Offering Memorandum, the party in possession hereof agrees (i) to return it to Cushman & Wakefield / Commercial Advisors immediately upon request of The Company or Owner and (ii) that this Offering Memorandum and its contents are of a confidential nature and will be held and treated in the strictest confidence. No portion of this Offering Memorandum may be copied or otherwise reproduced or disclosed to anyone without the prior written authorization of The Company and Owner. The terms and conditions set forth above apply to this Offering Memorandum in its entirety. This is not an offer and no party shall be bound by any terms, conditions, proposals or agreements described herein or otherwise until a legally binding agreement(s) is fully executed and distributed. Cushman & Wakefield / Commercial Advisors (“Broker”) makes no representations or warranties as to the accuracy of this information and interested parties bear the entire burden of investigating every aspect of the subject property/transaction before entering into any binding agreement(s).

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