medical ofce confidential offering memorandum ortfolio dan ...€¦ · our team here at susanville...

Confidential Offering Memorandum presented byDan Oster, SIOR & Chase HoustonNAI Alliance

Tel +1 775 336 4600

[email protected]@naialliance.com

Medical Office PortfolioTrue Net Lease Investment

Reno/ Sparks MSA

AboutNAI Alliance

NAI Alliance is a full-service commercial real estate company with years of collective experience in office, industrial, retail, land, multi-family and investment brokerage and commercial property management- more than any other commercial brokerage in the Reno and northern Nevada area. We chose our name because some of the most seasoned brokers in the Reno and northern Nevada area came together to deliver unsurpassed customer service and real estate solutions based on superior market knowledge.

NAI Alliance delivers a superb commercial real estate experience. Professionalism and customer service are at the center of our business. NAI Alliancecan provide you a customized commercial real estate solution in the Reno, NV area and beyond. With offices in Reno and Carson City our expertise extends into the entire Northern Nevada region.

Table of Contents

04 Section 01 Executive Summary

05 Section 02 Financials

06 Section 03 Tenant Profile

11 Section 04 Market Overview

19 Section 05 Regional Overview

ExecutiveSummary1

AboutBlueTree Dental Office

Located in Northen Nevada & Northern California, the BlueTree Dental Portfolio is six dental Offices with a combined square footage of ±39,111 SF. This portfolio is 100% leased and is being offered as a sale- lease back investment. BlueTree Dental Services is the sole guarantor for all the buildings on a new 10-year lease term concurrent with the real estate transaction. The Dental office portfolio has regional locations to service Northern Nevada and MSA. Priced well below replacement cost, in a market experiencing strong rental rate growth. This investment is ideal for investors looking for a stable cash flow while still benefiting from rising values in one of the fastest growing Commercial Real Estate Markets in the US.

BlueTree Dental is a highly effective dental management company and provider group that was created in 2012. A group of dental and business professionala who’s primary focuses are to possess a vision of the future of dentistry, as well as uphold the values needed to successfully operate organizations focused on providing the best in patient care and experience. BlueTree Dental manages multiple dental practices and will be the master guarantor on all leases. BlueTree manages the following dental practices: It’s My Smile Dentistry, My Kid’s Smile Dentistry & Orthodontics, The Smile Shop & Orthodontic Partners, Desert Valley Dental, and Susanville Orthodontics & Pediatric Dentistry, Legendary Smiles Orthodontics, Sierra Oral and Facial Surgery and Aland Family Dentistry.

Financial Summary at a Glance

Seven Building InvestmentNOI $735,814 (Year 1)

CAP Rate 5.6% (Year 1)

Sale Price $13,200,000($338 PSF)

OPEX. $114,065(True Net Lease)

Lease Term 10-years Net Lease

Cash Flow AssumptionProperty Address Six BuildingsProperty Type Medical Office BuildingsSize 39,111 Sq. Ft.Purpose of Analysis Investment Analysis

Acquisition Price $13,200,000 ($338.03 PSF) Down Payment $3,300,000 (25%)Loan Amount $9,900,000Interest Rate 5.30%Amortization Period 25Loan Term 10Payments/ Year 12Aunnual Debt Service $716,834.04Periodic Payment $59,736.17

Acquisition Data

Mortgage Data

Financials

Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 10

Gross Rent $849,879 $866,877 $884,215 $901,899 $919,937 $1,015,685Expenses $114,065 $115,776 $117,513 $119,276 $121,065 $130,421Net Operation Income $735,814 $751,101 $766,702 $782,623 $798,872 $885,264Annual Debt Service $716,834 $716,834 $716,834 $716,834 $716,834 $716,834Cash Flow Before Taxes $18,980 $34,267 $49,868 $65,789 $82,038 $168,430Capitalization Rate 5.57% 5.69% 5.81% 5.93% 6.05% 6.71%Principal Reduction $199,465 $209,937 $220,958 $232,559 $244,768 $316,129Total Return $218,445 $244,203 $270,826 $298,348 $326,806 $484,559Return on equity 6.62% 7.40% 8.21% 9.04% 9.90% 14.68%

Sale in Year-5 at 5.75% CAP $14,628,699.61Loan Balance Year 5 $8,746,969Proceeds from Sale $5,881,731.09Equity Multiplier 2.19x Leveraged IRR 18.7%

Sale in Year-10 at 5.75% CAP $15,881,018.44Loan Balance Year 5 $7,316,339.05Proceeds from Sale $8,564,679.39Equity Multiplier 3.64x Leveraged IRR 16.6%

2

PropertyOverview

Tenant Profile3

County Washoe County NOI $165,900.00

Address 10455 Double R Blvd Sale Price $2,962,500.00

Building SF 7,900 Price PSF $375


Address 10645 Double R Blvd Sale Price $1,577,700.00



Address 3605 Grant Drive Sale Price $3,083,142.86



Address 85 Continental Way Sale Price $1,285,714.29



Address 475 Somersett Pkwy Sale Price $3,334,767.86


County Lassen County NOI $50,160

Address 151 Ash Street Sale Price $895,714.29


TenantProfile3

AboutThe Tenants

My kids Smile Dentistry - 10645 DOUBLE R BLVD, RENO, NV 89521At My Kid’s Smile, our mission is to provide children with the highest quality of dental and orthodontic care available to them in a friendly, caring environment. All care must be based on sound scientific and ethical principles. Our patients’ emotional and physical well being is our number one priority. Our focus is on preventive dentistry and dental maintenance including orthodontics to children, young adults, and disabled individuals. We will strive to make it fun for them as well as safe and rewarding.

Legendary Smiles Orthodontics - 10645 DOUBLE R BLVD, RENO, NV 89521Legendary Smiles provides the greater Reno/Sparks community the highest quality of orthodontic care in a friendly, comfortable environments. We pride ourselves in the courteous service we deliver to each person who walks through our doors. We offer flexible payment plans for a variety of treatment options including traditional appliances, clear braces, Invisalign®, and Invisalign Teen®, while utilizing the latest in computer technology and digital imaging to ensure that you receive the most effective care possible. Come see us at one of our 5 locations located throughout Northern Nevada.

BlueTree Dental & Orthodontic Partners - 3605 GRANT DRIVE, RENO, NV 89509Orthodontic Partners has been in practice since 1974, serving the families of Northern Nevada with a fun orthodontic experience that results in beautiful, healthy smiles! Drs. Lance Bruntz and Dan Walton offer the highest quality and most advanced orthodontic treatments, including phase I preventative treatment for children, braces for teens and adults, iTero impression-free 3D scanning, and we are a Top 1% in the nation provider if Invisaligan clear aligners for teens and adults. Our practice is known in the Reno and Sparks areas for delivering the highest quality orthodontics in a fun and family friendly environment. Our doctors are known for being friendly, knowledgeable and for creating gorgeous smiles. We even treat many local dentists and their families! Come in for a complimentary consultation, and let us show you around. We’ll perform a complete orthodontic evaluation that will help us determine which orthodontic treatment is best for your needs. We look forward to meeting you and your family and appreciate the opportunity to help you embrace your smile.

TenantProfile3

It’s My Smile Dentistry - 10455 DOUBLE R BLVD, RENO, NV 89521Dentist Dr. Bradlee Davis and Dr. Michael Stallings offer a full scope of general and cosmetic dentistry with expertise ranging from porcelain veneers to dental implants, crowns and bridges.Dr. Davis and Dr. Stallings can now correct a wide variety of so-called permanent cosmetic dental problems, and can literally redesign your smile.

Sierra Oral & Facial Surgery - 475 SOMERSETT PKWY, RENO, NV 89523Our mission is to put People First by providing exceptional care and ongoing patient support through Compassion, Comfort and Expertise. This means that your needs matter to us! We care about gaining and keeping your trust by offering you the best part of ourselves. Compassion, means caring deeply about the people we treat. You are a person as well as a patient.

The Smile Shop - 475 SOMERSETT PKWY, RENO, NV 89523Walk into The Smile Shop and you’ll notice an inviting, comforting and fun-filled office. Our dentists and staff members make it a top priority to deliver a personalized approach to dental care that is specific to your child’s needs. Our dentists are highly skilled and stay up-to-date on the proven methods and approaches to pediatric dentistry. We specialize in comprehensive care from the infant stages through the teen years to ensure the best smiles around. Our goal is to establish a long-lasting relationship with our parents and patients. The Smile Shop is a locally owned pediatric dentistry practice with three office locations in Reno and Sparks. Dr. Michael Stoker established The Smile Shop in 1980. In 1990 he was joined by Dr. Richard Adams. Today, Dr. Nicole Stoker, Dr. Melissa McCool and Dr. Whitney Garol lead The Smile Shop team. All the doctors at The Smile Shop received postdoctoral residency training to become certified in pediatric dentistry.

Susanville Orthodontics and Pediatric Dentistry - 151 ASH STREET, SUSANVILLE, CA 96130At Susanville Orthodontics & Pediatric Dentistry, we offer a range of services such as early orthodontic treatment, as well as adult treatment. We also offer pediatric specialty care with our primary focus as prevention. We tailor our plans to each individual patient and we understand that each child and family is different. It is our goal to strive to meet each patient’s needs.As your local provider we pride ourselves in knowing our patients and families on a more community minded level supporting local sports teams, community services, fundraisers, and encouraging children and adults alike in their activities.As a local provider, for your convenience we are available Monday through Thursday during regular business hours for any questions, concerns or emergencies that might arise. It is not uncommon to find our staff assisting patients and their families with concerns regarding their care at local shops and activities. Our team here at Susanville Orthodontics and Pediatric Dentistry are dedicated to creating beautiful smiles to enhance self esteem and self confidence for a lifetime.

Aland Family Dentistry - 85 Continental Way, Reno, NV 89509At Aland Family Dentistry, we provide compassionate and gentle dental care to our patients throughout Northern Nevada. Dr. Troy E. Aland and our high-skilled dental team believe our patients are our friends, and as such, deserve to be treated with warmth, respect, and consideration. Dr. Aland and our team always make the effort to ensure that every visit to out practice is a positive one for patients and their families.

2AboutThe Tenants

TenantProfile3

For Sale & Lease

Office Building547,874 SF | N/A

5345 Kietzke Lane, Suite 100Reno, NV 89511775 336 4676 telnaial l iance.com

Reno/Sparks &Aerial

SusanvilleAerial

2SitePlan3

For Sale & Lease

Office Building3,858 SF | N/A


MarketOverview4Sale

Comparables

Sale Comps Price Bldg. SF Price/SF CAP Close

110381 Double R Blvd.Reno, NV89521

$3,200,000 7,900 SF $405.06 5.70% 12/25/2018

2932 Ryland StReno, NV89502

$3,768,500 7,642 SF $493.13 5.75% 06/01/2018

35590 S. Kietzke LnReno, NV89511

$5,500,000 14,670 SF $374.91 6.20% 02/01/2018

45375 Reno Corporate Dr.Reno, NV89511

$1,095,000 4,168 SF $262.72 6.30% 01/01/2018

5604 W Moana LnReno, NV89509

$2,680,000 13,380 SF $200.30 5.25% 10/12/2017

Totals/Averages Price Bldg. SF Price/SF CAP

$3,248,700 9,552 SF $347.22 5.84%

Sales Comparables Summary


3605 GRANT DRIVE

• 14,388 SF Medical Office• Built in 1979

• Parcel # 024-122-08• Tenant: BlueTree Dental &

Orthodontic Partners• Year-1 NOI : $172,656

10455 DOUBLE R BLVD

• 7,900 SF Medical Office• Built in 2004• Parcel # 160-853-05• Tenant: It’s My Smile Dentistry• Year-1 NOI : $165,900

475 SOMERSETT PKWY

• 5,659 SF Medical Office• Built in 2015• Parcel # 232-041-02• Tenant: The Smile Shop & Orthodontic Partners (Sierra Oral & Facial Surgery)• Year-1 NOI : $186,747

85 Continental Way, Reno NV 89509

• 3,858 SF Medical Office• Parcel # 014-251-58

• Tenant: Aland Family Dentistry • Year-1 NOI : $72,000

151 ASH STREET, Susanville, CA

• 3,800 SF Medical Office• Parcel # 105-153-19-11• Tenant: Susanville Orthodontics & Pediatric• Sub tenant allow for growth• Year-1 NOI : $50,160

10645 DOUBLE R BLVD

• 3,506 SF Medical Office• Built in 2004

• Parcel # 160-853-14• Tenant: My Kids Smile Dentistry &

Legendary Smiles Orthodontics• Year-1 NOI : $88,351

Explosive growth in the office sector is happening now. Reno office vacancies were at all-time low to start 2019. Sales volume in 2018 was the strongest year on record. Still, annual investment has easily surpassed the hisorcial average for many years.

The Reno/Sparks office market is transitioning from Recovery into Expansion. 2018marks a turning point because average asking rents ($1.75 PSF) have finally moved above the 10-year average of $1.65 PSF signifying growth has returned to the market. Construction of new speculative office buildings further corroborate expansion is underway as other product types (Multi-Family and Industrial) have demonstated in previous quarters, once average asking rates exceed the long-term rent trend line, rent growth tends to accelerate as market vancancy declines. This indeicates long term rent growth is to be expected.

Reno’s New Economy

Since 2011, Reno has recruited over 100 companies to locate or expand here with more than 20,000 new jobs. Reno’s economy has been diversifying away from Casinos and Gaming over the last decade. Today gaming only accounts for 9% of the local economy Reno’s Economy has made a big move into the trade and service sector; manufacturing, transportation, communications, public utilities, finance, and construction.

Reno’s job growth is among the strongest in the nation. Annual employment gains in 2018 were 4.1%, the fourth consecutive year job growth topped 4%. By comparison, national job growth was 1.7%. A business-friendly environment, proximity to Silcon Valley, and low cost of living makes Reno an attractive destination for businesses, and serveral major corporations have announced huge expansions in the city.

Market Overview4Population &

Employment Growth

Regional InformationHOW DOES NEVADA STACK UP?

Reno, Nevada

The Greater Reno/Sparks area is seeing unprecedented growth thanks to many key factors. Near the end of 2014, Tesla Motors named Nevada the official site for the Tesla Gigafactory. When completed, the Gigafactory will be the largest building in the world. Following Tes-la, data center giant Switch has already completed construction on phase 1 of their new data center campus, which will be the largest in the world.

In 2017, the latest blockbuster deal was announced: Google purchased 1,200 Acres of land for a data center and autonomous vehicle testing facility. The arrival of several data centers, as well as Tesla and Panasonic’s joint battery manufacturing facility, is further diversifying a regional economy primarily known for mining, distribution, gaming, and tourism. The greater Reno area, hosts e-fullfilment facilities for Amazon, Walmart, Petsmart and Zulily. Adding Google to the mix helps bolster Nevada’s attractiveness for business as a rapidly growing technology, e-commerce, and innovation hub.

#2#5

#8

#9

The Kauffman Foundation Index ranks Nevada as #2 of 25 in “Highest Startup Activity in 2016” for Smaller States.

Most Business-Friendly Tax Climate by the Tax Foundation for 2017.

The Kauffman Foundation Index ranks Nevada as #8 of 25 in “Growth Entrepreneurship 2016” for Smaller States.

According to chiefexecutive.net’s “2016 Top 50 Places to do business.”

RegionalOverview5

Medical Office Portfolio

True Net Lease Investment

Reno/ Sparks MSA

Confidential Offering Memorandum presented byDan Oster, SIOR & Chase HoustonNAI Alliance

Tel +1 775 336 4600

[email protected]@naialliance.com

medical ofce confidential offering memorandum ortfolio dan ...€¦ · our team here at susanville...

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