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:
WELLSTAR MEDICAL CENTER 6
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.
01 Executive Summary
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.
WELLSTAR MEDICAL CENTER 7
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
01 Executive Summary
WELLSTAR MEDICAL CENTER 8
PROPERTY OVERVIEW
01 Executive Summary
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.
WELLSTAR MEDICAL CENTER 9
PROPERTY PHOTOGRAPHS
01 Executive Summary
WellStar Medical Center
TENANT OVERVIEW
Tenant and Hospital Summary Rent Roll
02
WELLSTAR MEDICAL CENTER 11
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
WELLSTAR MEDICAL CENTER 12
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
WELLSTAR MEDICAL CENTER 13
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
WellStar Medical Center
FINANCIAL OVERVIEW Financial Assumptions In-place Income Schedule
03
WELLSTAR MEDICAL CENTER 15
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
© 2014 Ackerman Medical. All rights reserved.
FOR MORE INFORMATION, PLEASE CONTACT:
ANDREW MURPHYAckerman Medical Senior Vice President, Investment Sales 770.913.3950 | [email protected]