DAVITA DIALYSIS OF HILLSBORO, ILLINOIS · DAVITA DIALYSIS OF HILLSBORO, ILLINOIS OFFERING MEMORANDUM Office: (972) 865-7991 | Cell: (214) 300-5524 ... the Landlord is responsible

1822 Senator Miller DriveDAVITA DIALYSIS OF HILLSBORO, ILLINOIS

OFFERING MEMORANDUM

Office: (972) 865-7991 | Cell: (214) 300-55245115 McKinney Avenue, Suite F Dallas, TX 75205

Nathan Huffman | [email protected] Mark Janko | [email protected]

In Association with

Offers should be submitted electronically to Nathan Huffmanat [email protected] and include the following information:

Purchase Price

Earnest Money

Closing Period

Sources of Debt and Equity

Other Terms

CONTENTSPg 3 - Investment HighlightsPg 5 - Pricing Pg 6 - DaVita OverviewPg 7 - Location OverviewPg 9 - Certificate of Need



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INVESTMENT OVERVIEW

TENANT OVERVIEW FACILITY OVERVIEW

Tenant Trade Name

Ownership

Credit Rating

Stock Symbol

Number of Locations

Headquartered

Number of Employees

Total Assets

DaVita Healthcare Partners, Inc.

Public

BB (DaVita)

DVA

2,239 Worldwide (2,152 in US)

Denver, CO

65,000

$18+ Billion

Facility Type

Lease Type

Square Feet

Number of Stations

Primary Term Expiration

Primary Term Remaining

Option Periods

Rent Escalation

Condominium

Double Net

5,207

7/31/2031

13.7 Years

10% Every 5 Years

(2) 5-Year at FMV

8

3

4

INVESTMENT OVERVIEW

RENT SCHEDULE

PERIOD NOI RENT INCREASE

AUG 2016 - JUL 2021 $101,183 10%

$111,076 10%

$121,961 10%

AUG 2021 - JUL 2026

AUG 2026 - JUL 2031

Peranich Huffman Net Lease Group is pleased to offer for sale on an exclusive basis, the single-tenant net leased DaVita Dialysis Facility of Hillsboro, Illinois, a Certificate-of-Need state. Renovated in early 2016, the 5,207 square foot condominium is leased on a Corporately Guaranteed, long term double-net basis to DaVita’s parent company, DaVita Healthcare Partners, Inc.

Per the double net structure of the lease, the Landlord is responsible for the repair and replacement of the roof, structure and parking areas of the building but is to be reimbursed for repairs made to both the parking area and roof in addition to replacement costs for all three on an amortized basis. Tenant is solely responsible for the HVAC and maintenance of the premises. In addition to the base rent the Tenant pays an additional management fee of $2,250/yr; there is no third party management in place, nor is it needed; therefore this income is viewed as additional rent. The facility contains eight stations in addition to DaVita PD offices and their home training unit.

Offered at a 6.25% capitalization rate, DaVita of Hillsboro, IL provides an investor with the opportunity to acquire a property with a strong operation that is home to a national medical tenant that exemplifies a reputation of consistency for both patients and the real estate investment community.

DaVita Healthcare Partners, Inc., has a net worth in excess of $16.2 billion and currently holds an Investment Grade Standard & Poor’s credit rating of "BB Stable". As a leading provider of kidney care in the United States, DaVita is a Fortune 500® company that, through its operating divisions, provides a variety of health care services to patient populations throughout the United

*inclusive of $2,250/yr management fee4

PRICING & FINANCIALS

$1,619,000PURCHASE PRICE

6.25%CAP RATE

DOUBLE NETLEASE TYPE

$

13.7 YEARSLEASE TERM REMAINING

$101,183ANNUAL BASE RENT

DAVITA CORPORATELEASE GUARANTOR

%

$

Investment Highlights

Double Net Lease - Minimum Landlord Responsibilities.

• Corporately Guaranteed by DaVita Healthcare Partners, Inc.

• Located One Mile From the Integris Hillsboro Area Hospital.

• $19.00 Base Rent Per Square Foot.

• Illinois is a Certificate of Need (CON) State.

• Lease Provides for 10% Rent Increases Every 5 Years.

5

DAVITA OVERVIEW

1822 Senator Miller Drive Hillsboro IL 62049

DaVita Healthcare Partners, Inc., a Fortune 500® company, is the parent company of DaVita Kidney Care and DaVita Medical Group. DaVita Kidney Care is a leading provider of kidney care in the United States, delivering dialysis services to patients with chronic kidney failure and end stage renal disease. DaVita Kidney Care consistently differentiates itself from other kidney care companies and surpasses national averages for clinical outcomes. The company's clinical outcomes for dialysis have improved for the past decade, and in many key areas measuring quality dialysis care, we lead the nation. As of December 31, 2016, DaVita Kidney Care operated or provided administrative services at 2,350 outpatient dialysis centers located in the United States serving approximately 188,000 patients. The company also

operated 154 outpatient dialysis centers located in 11 countries outside the United States.

6

7

Diabetes Prevalence County Map

Age Adjusted Rate Per 1,000 Adults(2013 Centers for Disease Control)

MONTGOMERY COUNTY10.5 Diabetes Incidents per 1000 adults(2013 CDC Results Age Adjusted Rate)

8.9 - 10.510.6 +

7.6 - 8.8 6.4 - 7.50 - 6.3

LOCATION OVERVIEW



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8

Demographics

POPULATION 3 MILES 5 MILES 10 MILES

Average HH Income Growth 2000 - 2010 26.5% 27.6% 29.5%

Total Population 7,418 8,529 20,309

% White Collar

% Blue Collar

Population Growth 2000-2010

41.6% 41.9% 45.2%

58.3% 58.0% 54.7%

16.6% 11.8% 0.3%

Households

Average Household Size

Household Growth 2000-2010

Household Growth 2016-2021

2,369 2,823 7,681

2.33 2.35 2.39

1.3% 1.6% 1.1%

1.5% 1.7% 1.3%

HOUSEHOLDS 3 MILES 5 MILES 10 MILES

Hillsboro Area Hospital

Surrounding Medical

LOCATION OVERVIEW



In Association with

There are only 12 strict “Certificate of Need” states nationally. A CON law regulates the construction and operations of new dialysis facilities. The basic premise underlying this CON regulation is that excess capacity (in the form of facility overbuilding) directly results in health care price inflation.

The Certificate of Need law in Illinois places limitations on the development of new facilities, which prevents competition with the subject property and creates a high barrier of entry for competition; therefore, benefiting healthcare real estate landlords throughout these states. The 12 strict CON states are shown in blue below.

CERTIFICATE OF NEED



In Association with

9

FOR MORE INFORMATION, PLEASE CONTACT



In Association with

CONFIDENTIAL MEMORANDUM & DISCLAIMER

Peranich Huffman Net Lease Group (“Agent”) has been engaged as the exclusive agent for the sale of the DaVita Dialysis located in Hillsboro, IL (the “Property”), 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. Neither the enclosed materials nor any information contained herein is to be used for any other purpose or made available to any other person without the express written consent of the Seller. Each recipient, as a prerequisite to receiving the enclosed, should be registered with Peranich Huffman Net Lease Group as a “Registered Potential Investor” or as “Buyer’s Agent” for an identified “Registered Potential Investor.” The use of this Offering Memorandum and the information provided herein is subject to the terms, provisions and limitations of the confidentiality agreement furnished by Agent prior to delivery of this Offering Memorandum. 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 or 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 thereunder 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 or Agent or as otherwise provided in the Confidentiality and/or Registration Agreement executed and delivered by the recipient(s) to Peranich Huffman Net Lease Group.

Documents

DAVITA DIALYSIS OF HILLSBORO, ILLINOIS · DAVITA DIALYSIS OF HILLSBORO, ILLINOIS OFFERING MEMORANDUM Office: (972) 865-7991 | Cell: (214) 300-5524 ... the Landlord is responsible