albuquerque square - abq, nm

: : TOM JENKINS, CCIM, SIORFirst Vice President +1 505 837 4901 [email protected]

EXCLUSIVE ADVISORS

SINGLE TENANT NET LEASE SALE LEASEBACK INVESTMENT OPPORTUNITY

ALBUQUERQUESQUARE

101D SUN AVENUEALBUQUERQUE, NM 87109

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TABLE OF CONTENTS

Property OverviewInvestment SummaryInvestment HighlightsFinancial OverviewTenant OverviewAerialSite & Regional MapBuilding PhotosFloor Plans

AREA OverviewAbout Albuquerque, NM

ALBUQUERQUESQUARE


Property Overview01.

Albuquerque Square | 101D Sun Avenue | 4

Investment Summary

Albuquerque Square is a Class A building with a distinctive architectural design that is constructed with high quality finishes throughout. Albuquerque Square is 100% occupied by Genesis HeathCare, who chose this office building as their Western Headquarters. The building is located within the Journal Center, the premier Albuquerque office park. Construction is steel frame and is surfaced with an insulated / aluminized curtain glass and Arizona sandstone panels.

Albuquerque Square serves as an administrative support building for Genesis HealthCare. It was constructed in 1996 and consists of three levels of open office architecture. It is a 40,374 square foot midrise, and has several differentiating quality features throughout. The third floor mirrors the first and second floor with the addition of balconies that overlook the lush landscaping of the Journal Center and the spectacular views of the Sandia Mountains. This facility also has an extensive IT infrastructure with a CAT backup generator, supplemental HVAC System, and grade-level equipment loading area.

Genesis HealthCare is the nation’s largest publicly traded skilled nursing and rehabilitation therapy provider. They employ nearly 95,000 people, each one dedicated to the delivery of high-quality, personalized health care to all the patients and residents in their Centers. The more than 500 Skilled Nursing Centers and Assisted/Senior Living Communities are located in 34 states across the nation, while the Genesis Rehab Services division provides therapy to nearly 1,600 health care providers in 46 states and the District of Columbia. Genesis is headquartered in downtown Kennett Square, Pennsylvania.

PROPERTY OVERVIEW

PROPERTY SUMMARYName of Building Albuquerque Square

Address 101D Sun Avenue

Description Three-Story Office Building - Sale Leaseback

Year Built 1996

Building/SF 40,374

Parking 2.87/1,000

Total Land Area 2.3625± acres

Percent Occupied 100%

Number of Tenants 1 - Genesis HealthCare

INVESTMENT SUMMARYSale Price $9,100,000

NOI $656,077

Year 1 Cap Rate 7.32%

Annual Increases 2%

Price/SF $225.39


Investment Highlights

• 100% occupied by nation’s largest publicly traded skilled nursing and rehab therapy provider - Genesis HealthCare

• Genesis HealthCare has over 2,300 skilled nursing and therapy facilities across the U.S and reported revenue of $4.77 billion in 2014.

• Due to the aging population and increasing life expectancies, the nursing care sector projects a 5.2% average growth rate per year until 2024.

• As the most dynamic city and largest urban area in New Mexico, Albuquerque serves as a hub for business, trade, finance, industry and government. The Albuquerque metro area accounts for nearly 46% of the state’s total employment.

• Albuquerque’s population is expected to expand by 4.61% by 2018, resulting in an estimated population of 954,000 residents.

PROPERTY OVERVIEWLEASE SUMMARYTenant GENESIS ADMINISTRATIVE SERVICES, LLC

Guarantor Genesis HealthCare

Lease Type NNN - Sale Leaseback

Roof & Structure Tenant Responsibility

HVAC* Tenant Responsibility

CAM/Parking Tenant Responsibility

Insurances Tenant Responsibility

Utilities Tenant Responsibility / Pays Direct

Property Taxes Tenant Responsibility / Pays Direct

Lease Term 12 Years

Annual Base Rent (Current) $656,077.50

Annual Rent/SF $16.25

Lease Commencement Upon Close of Escrow

Lease Expiration 12 Years Following COE

Term Remaining on Lease 12 Years

Increases ~2.0% annually

*Notes: Lease terms subject to lease execution upon COE CAPX of HVAC to be amoritized between Tenant and Landlord.


PROPERTY OVERVIEW

7.21%7.28%

7.35%7.43%

7.50%7.58%

7.66%7.74%

7.81%7.89%

7.98%8.06%

6.60%

6.80%

7.00%

7.20%

7.40%

7.60%

7.80%

8.00%

8.20%

RETURN ON INVESTMENT (ROLLING REMAINING TERM) FINANCIALS

Rent (Annual)

Return (Annual)

Return (Rolling Average Over Term Remaining)

Year 1 $656,077.50 7.21% 7.21%

Year 2 $669,199.05 7.35% 7.28%

Year 3 $682,583.03 7.50% 7.35%

Year 4 $696,234.69 7.65% 7.43%

Year 5 $710,159.39 7.80% 7.50%

Year 6 $724,362.57 7.96% 7.58%

Year 7 $738,849.82 8.12% 7.66%

Year 8 $753,626.82 8.28% 7.74%

Year 9 $768,699.36 8.45% 7.81%

Year 10 $784,073.34 8.62% 7.89%

Year 11 $799,754.81 8.79% 7.98%

Year 12 $815,749.91 8.96% 8.06%

Property Proforma

Financial Snapshot

TENANT ANNUAL SCHEDULED INCOMETENANT ACTUALGenesis HealthCare $656,077.50

Total $656,077.50

Loan Quote

Debt Term Amortization Rate Payment LO Costs

Fixed $6,370,000 25 years 25 years 4.75% $36,316 $63,700

Quote provided by CBRE Debt & Equity Finance. Customized quotes available. Call for details.

PROPERTY OVERVIEW

Tenant Overview

Albuquerque Square is 100% occupied by Genesis HeathCare, who chose this office building as their Western Headquarters. Genesis HealthCare is the nation’s largest publically traded skilled nursing and rehab therapy provider (NYSE:GEN). Choosing this site in Albuquerque acknowledged their commitment to their current business in this market, and their ability to attract new business.

Genesis HealthCare has 500 Skilled Nursing Centers and Assisted/Senior Living Communities that are located in 34 states across the nation. Through their Genesis Rehab Services division, they provide therapy to more than 1,600 locations in 46 states.

On February 2, 2015 Genesis Health Care, LLC and Skilled Healthcare combined into Genesis HealthCare, INC. The company employs more than 95,000, and reports revenue of $4.7 billion. By the end of 2015, Genesis is planning to acquire 24 Revera, Inc. skilled nursing facilities, which demonstrates their continued expansion in the skilled nursing market.

Skilled nursing facilities are seeing growth and expansion due to rising health care costs, and an increase in life expectancies. The 65+ and 85+ population is projected to increase 36% and 14%, respectively, by 2020. As the population ages, including the large population of baby boomers, there has been an exponential increase in demand for assisted living, long term care, hospice, and rehabilitation therapy.

CORPORATE OVERVIEWIndustry Healthcare

Type Public

Traded GEN

Locations 2,300+

Employees 95,000

Revenue $4.77 billion (2014)

Corporate Headquarters Kennett Square, Pennsylvania, U.S.

NATIONAL NURSING CARE FACILITIES FACTSNursing Centers 15,655

Beds 1.7 MM

Revenue $130 BN

Employees 1.8 MM

Average Growth Rate Per Year Until 2024

5.2%



Sandia National Labs

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423

Albuquerque Public Schools

University of New Mexico University of New Mexico Hospital

Presbyterian Hospital

Academy East Industrial Park

Albuquerque International Sunport (Airport)

Northrop Grumman

Kirtland Airforce BaseSandia Mountains

Albuquerque Square


Site & Regional Map

PROPERTY OVERVIEW

Paseo Del Norte Blvd NE

N


Building Photos

PROPERTY OVERVIEW


PROPERTY OVERVIEW

not to scalenot to scale

Floor Plans | First Floor


PROPERTY OVERVIEW

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Floor Plans | Second Floor


not to scale

Floor Plans | Third Floor

PROPERTY OVERVIEW

ALBUQUERQUESQUARE


Albuquerque Overview02.


ALBUQUERQUE OVERVIEW

Albuquerque, New MexicoAs the most dynamic city and largest urban area in New Mexico, Albuquerque is the state’s major commercial center, serving as a hub for business, trade, finance, industry and government. With a substantial labor force, the Albuquerque metro area accounts for nearly 46% of the state’s total employment. With a young population, an above-average growth rate, and the presence of the University of New Mexico, the Albuquerque metro area will continue to provide employers with an abundant, diverse and well-educated work force.

Albuquerque’s economy continues a slow and steady improvement in 2015. Albuquerque’s strengths include a stable employment base in education, healthcare and government, strong population growth and a budding high-tech industry supported by low business costs and federal research facilities. There have been many technology spin-offs from UNM, Sandia National Labs, and Kirtland AFB which will spur income growth. In addition tax incentives are in place to increase film industry growth.

Albuquerque also continues to enjoy the benefits of low costs of living and doing business, 96% and 88%, respectively on a national scale of 100%. These cost benefits, along with an exceptional quality of life, continue to provide the Albuquerque market with significant, long-term competitive advantages.

Albuquerque EconomyAmong the largest Albuquerque employers are Kirtland Air Force Base, the University of New Mexico (UNM), Sandia National Laboratories, Albuquerque Public Schools, Presbyterian Healthcare Services, the UNM Hospital and Intel Corporation. In addition, public sector employment has also historically played a stabilizing role in Albuquerque’s employment and economy. Twenty percent of Albuquerque’s direct employment is public sector-related, with as much as another 10% indirectly derived from public sector activity.

Employment Quick StatsLargest Employers:

• Kirtland Airforce Base (16,728 employees)

• University of New Mexico (15,360 employees)

• Albuquerque Public Schools (14,810 employees)

• Sandia National Labs (8,856 employees)

• Presbyterian Healthcare (7,310 employees)

• UNM Hospital (5,960 employees)

• City of Albuquerque (5,500 employees)

• State of New Mexico (4,950 employees)

• Lovelace Hospital (4,000 employees

• Bernalillo County (2,648 employees)

All office-related sectors, except for the professional and business services sector, created jobs for the 12 month-period ending in November 2014. While the professional and business service sector lost 500 jobs during the same period, the education and medical service sector gained 2,400 jobs, contributing to a gain of 2,600 jobs typically residing in office buildings.


ALBUQUERQUE OVERVIEWKIRTLAND AIR FORCE BASE

Kirtland Kirtland Air Force Base (AFB) is the city’s largest employer and is home to a wide range of Department of Defense, department of Energy, and United States Air Force organizations. Covering 51,558 acres in Albuquerque, the base is the third-largest installation in Air Force Material Command. Kirtland employs 16,728 civilians and 4,860 military personnel.

UNIVERSITY OF NEW MEXICO

Founded in 1889, The University of New Mexico (UNM) now occupies 600 acres along old Route 66 in the heart of Albuquerque. The University serves approximately 28,644 students at its main campus in Albuquerque and an additional 7,609 students through their branch campus locations. UNM is the state’s flagship university with 15,360 employees, and an overall $2.7B economic impact on the state. Central New Mexico Community College is another local institution of higher education, which serves approximately 23,000 students and employs 1,840.

Demographics - 5 Mile Radius

Albuquerque Demographic TrendsThe Albuquerque metropolitan area has a current population of more than 912,000 residents, reflecting a 2.82% increase over the population in 2010. This figure is expected to expand by another 4.61% by 2018, resulting in an estimated population of nearly 954,000 residents. Home to more than 42% of the state’s population, Albuquerque’s growth has also outpaced the overall New Mexico growth rate of 14% since 2000. Albuquerque’s estimated median household income is $48,365.

The entire east side of the City of Albuquerque is essentially built out and is home to many of the city’s major employers, entertainment and retail venues. As a result, much of future growth will be on the west side of Albuquerque with some possible growth in the suburban community of Rio Rancho. Housing on the west side of the city is considerable more affordable and offers a modest option for residents willing to commute further to the city’s major employment centers.

278,407 2015 Population

279,075 2020 Projected Population

40.06 Median Age

$67,5239 Estimated Average HH Income


ALBUQUERQUE OVERVIEWSANDIA NATIONAL LABORATORIES

Sandia Corporation, a Lockheed Martin Company, manages Sandia National Laboratories for the Department of Energy’s National Nuclear Security Administration. Sandia National Laboratories employs approximately 8,856 people and manages roughly $2.3 billion of work annually.

PRESBYTERIAN HEALTHCARE SERVICES

Presbyterian Healthcare Services is New Mexico’s only private, nonprofit statewide healthcare system; one of the top 10 integrated healthcare delivery networks in the U. S. Presbyterian employs 7,310. Presbyterian recently built a 292,000 SF new state of the art medical center in Rio Rancho, NM with a 3-story diagnostic & Treatment Center and a 5-story patient tower.

UNIVERSITY OF NEW MEXICO HOSPITAL

University of New Mexico Health Sciences Center is the largest academic health complex in the state and employs 5,960. UNM Hospital is New Mexico’s only level 1 Trauma Center and provides 13 pediatric subspecialties. UNM currently has a hospital on the UNM campus as well as the new Sandoval County Regional Medical Center in Rio Rancho.

UNIVERSITY OF NEW MEXICO

Founded in 1889, The University of New Mexico (UNM) now occupies 600 acres along old Route 66 in the heart of Albuquerque. The University serves approximately 28,644 students at its main campus in Albuquerque and an additional 7,609 students through their branch campus locations. UNM is the state’s flagship university with 15,360 employees, and an overall $2.7B economic impact on the state. Central New Mexico Community College is another local institution of higher education, which serves approximately 23,000 students and employs 1,840.

ALBUQUERQUE PUBLIC SCHOOLS

Albuquerque Public Schools (APS) is the largest of 89 public school districts in New Mexico with 127 schools and 89,500 students. APS employs 6,500 teachers and has a total of 14,810 employees.

INTEL CORPORATION

Intel Corporation, located in adjacent Rio Rancho, is the first high volume producer of microchips on 300mm wafers using 0.13-micron technology. The plant recently completed a $2B renovation to convert from production of 45- to 32- nanometer chips. The facility is staffed by 3,500 highly paid employees including contractors. Although Intel is a 20 to 30 minute drive from Albuquerque’s Northeast Heights, many employees choose to live there.


CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates may represent various clients with competing inter-ests in the same transaction. For example, this Memorandum may be received by our Affiliates, including CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the successful bidder for the Property. You hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved Affiliate will have any obligation to disclose to you the involvement of any Affiliate in the sale or purchase of the Property. In all instances, however, CBRE, Inc. will act in the best interest of the client(s) it represents in the transac-tion described in this Memorandum and will not act in concert with or otherwise conduct its business in a way that benefits any Affiliate to the detriment of any other offeror or prospective offeror, but rather will conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property.

This Memorandum contains selected information pertaining to the Property and does not purport to be a representation of the state of affairs of the Property or the owner of the Property (the “Owner”), to be all-inclusive or to contain all or part of the information which pro-spective investors may require to evaluate a purchase of real proper-ty. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other fac-tors beyond the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages, and other measurements are approximations. Ad-ditional information and an opportunity to inspect the Property will be made available to interested and qualified prospective purchas-ers. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.

Neither the Owner or CBRE, Inc, nor any of their respective direc-tors, officers, Affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or complete-ness of this Memorandum or any of its contents, and no legal commitment or obligation shall arise by reason of your receipt of

this Memorandum or use of its contents; and you are to rely solely on your investigations and inspections of the Property in evaluat-ing a possible purchase of the real property.

The Owner expressly reserved the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Property unless and until written agree-ment(s) for the purchase of the Property have been fully executed, delivered and approved by the Owner and any conditions to the Owner’s obligations therein have been satisfied or waived.

By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confident nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CBRE, Inc. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc.

AFFILIATED BUSINESS DISCLOSURE AND CONFIDENTIALITY AGREEMENT

6100 Uptown NE Suite 300

Albuquerque, NM 87110

© 2015 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assump-tions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners. Photos herein are the property of their respective owners and use of these images without the express written consent of the owner is prohibited. Updated 04/09/15

© 2014 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

This letter/proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this letter/proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm’s length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto.

ALBUQUERQUESQUARE


: : TOM JENKINS, CCIM, SIORFirst Vice President +1 505 837 4901 [email protected]

EXCLUSIVE ADVISORS

SINGLE TENANT NET LEASE SALE LEASEBACK INVESTMENT OPPORTUNITY

albuquerque square - abq, nm

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