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OFFERING MEMORANDUM SAN ANTONIO TEXAS A Subsidiary of Humana Health

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Page 1: OFFERING MEMORANDUMnnndeal.com/media/Humana_SanAntonioTX_OM.pdf · 2020-05-28 · Carlsbad Caverns NP White Sands NM Chickasaw NRA Hot Springs NP Petroglyph NM Alibates Flint Quarries

OFFERING MEMORANDUM

SAN ANTONIO TEXAS

A Subsidiary of Humana Health

Page 2: OFFERING MEMORANDUMnnndeal.com/media/Humana_SanAntonioTX_OM.pdf · 2020-05-28 · Carlsbad Caverns NP White Sands NM Chickasaw NRA Hot Springs NP Petroglyph NM Alibates Flint Quarries

CONFIDENTIALITY AND DISCLAIMERThe information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from Marcus & Millichap and should not be made available to any other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

NON-ENDORSEMENT NOTICEMarcus & Millichap Real Estate Investment Services, Inc. (“M&M”) is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of w, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of M&M, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOURMARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Page 3: OFFERING MEMORANDUMnnndeal.com/media/Humana_SanAntonioTX_OM.pdf · 2020-05-28 · Carlsbad Caverns NP White Sands NM Chickasaw NRA Hot Springs NP Petroglyph NM Alibates Flint Quarries

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Big Bend NP

Amistad NRA

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Carlsbad Caverns NP

White Sands NM

Chickasaw NRA Hot Springs NP

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Lake Charles

Amarillo

Beaumont

GarlandIrving

Lubbock

Pasadena

Waco

Abilene

Baytown

Brownsville

Galveston

Grand Prairie

Laredo

Longview

McAllen

MidlandOdessa

Plano

Port Arthur

Richardson

San Angelo

Tyler

Victoria

Wichita Falls

Matamoros

Reynosa

Albuquerque

Tulsa

Shreveport

Corpus Christi

Dallas

El Paso

Fort Worth

Houston

San Antonio

Santa Fe

Oklahoma City

Austin

Chihuahua

Monterrey

Saltillo

Arkansas

Louisiana

New Mexico

Oklahoma

Missouri

TEXAS

Mexico

Investment Summary .........................................5Investment Highlights.........................................7Aerial Map .......................................................10Tenant Summary ..............................................11Site Plan ..........................................................14Area Map .........................................................15 Location Map ...................................................17 Location Overview ............................................18Location Highlights ...........................................21Demographics ..................................................23

TABLE OF CONTENTS

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O V E R V I E WPrice $3,820,000

Gross Leasable Area (GLA) 14,600 SF

Lot Size (approx.) 1.69 Acres

Net Operating Income $248,200CAP Rate 6.50%Year Built / Renovated 2015/2020

L E A S E A B S T R A C TLease Type NN

Lease Term Remaining 10 YearsLease Start (Estimate) 9/1/2020Lease Expiration (Estimate) 8/31/2030Renewal Options 2x5Increases Increases in Option PeriodsTenant has a one time right to terminate the lease, on or after 84 months following lease commencement. In exchange, Tenant to pay Landlord unamortized TI allowance, Lease commissions of $99,280, + 4-months of rentUnder Force Majeure, Tenant does NOT abate rent, with extended period tacked onto end of lease for period in which they were able to operate or perform their duties under the term of the lease.

7031 MARBACH RD, SAN ANTONIO, TX 78227

PRICE: $3,820,000 CAP: 6.50% RENT: $248,200

INVESTMENT SUMMARY

A N N U A L I Z E D O P E R A T I N G D A T ALease Term Annual Rent

1-10 $248,200

Option 1 $268,056

Option 2 $289,518

L E A S E A B S T R A C T D E TA I L SLandlord Responsibilities

Utilities Repair & Maintenance of main sewer line. All other utilities are Tenant's responsibility

CAM Expenses* Landlord responsible for any Capital related expenses otherwise, Tenant reimburses for CAMs

Roof & Structure Landlord is responsible repair & replacement of common areas, roof, structure, foundation, exterior walls

Fire InsuranceLandlord to maintain fire "all risk" coverage. To be reimbursed by Tenant

Tenant ResponsibilitiesProperty Taxes Tenant reimburses Landlord

Insurance Tenant reimburses Landlord. Tenant to obtain Gen liab and property insurance

Utility Expenses Tenant reimburses Landlord

CAM reimbursements Tenant reimburses Landlord

Parking lot (painting) Covered under CAM - Tenant reimburses landlord

Exterior Lighting & Landscaping Covered under CAM - Tenant reimburses landlord

HVAC units Tenants sole cost and expense for maintenance/repairs and/or replacement

Maintenance Tenant solely responsible for maintenance of the premises (inc'd janitorial services as needed)

Waste Removal Tenant responsible

Exterior Signage Repair Tenant responsible for all aspects

CAM reimbursements Tenant reimburses Landlord

* Tenant to pay add’l rent of $8.50SF/per month to cover CAM expenses, with a cap on annual increase of not more than 3.5% of prior year’s CAM costs. Est. Breakdown as follows: $3.55/SF CAM expenses; $4.45/SF for RE taxes; $0.50/SF for Ins. Taxes, insurance and utilities inc’d snow/ice removal are excluded from add’l rent, and not part of CAM calculation.

5

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Former CVS re-purposed to be an Administrative Center for CanoHealth (a subsidiary of Humana Health)

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INVESTMENT HIGHLIGHTSOriginally built as a CVS in 2015, Humana executed a new NN lease, offering administrative and sales services for Cano Health providers.

Strategically located at the hard corner of West Military Drive and Marbach Road, a “main & main” location with strong visibility.

NNN10 Year

Landlord-Friendly LeaseFeatures excellent visibility: Daily traffic counts exceed

41,000 vehicles per day passing directly in

front of the site

Newer construction, built in 2015 with new interior

build-outs in 2020

1.3 miles from Lackland Air Force Base, the largest Air Force Base installation

in the Country

Located just 3-miles from an Amazon

Fulfillment Center

Barriers to entry due to both government

and infill presence

7

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INVESTMENT HIGHLIGHTS

t A re-purposed CVS leased to a Humana subsidiary Cano Health.

t Important strategic location across from Walgreens.

t True hard-corner location with 41,000 cars per day at intersection.

t San Antonio is the 7th most populous city in the country, and 2nd largest city in Texas.

t Infill location with dense population (16,851 residents within one mile radius).

24,400 VPD

287,735TOTAL POPULATION WITHIN 5-MILE RADIUS

$57,521AVERAGE HOUSEHOLD INCOME WITHIN 5-MILE RADIUS

- W MILITARY DRIVE

16,665 VPD - MARBACH ROAD

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MARBACH ROAD – 16,665 VPDMARBACH ROAD – 16,665 VPD

W M

ILITARY DR – 24,400 VPD

W M

ILITARY DR – 24,400 VPD

I-410I-410

Walgreens

John Jay High School

Cable Elementary School

Matheson (Air Separation Unit) USAF

Anson Jones Middle School

San Antonio Event Center

3.4 miles south of site

Lackland Air Force Base

Mary Hull Elementary School

Westwood Terrace Elementary School

Sunnybrook Christian Academy

Part of Lackland AFB

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TENANT SUMMARYHUMANA Humana Inc., is a leading health and well-being company, headquartered in Louisville, KY. The company serves millions of people across the country and is committed to ensuring members achieve their best health and well-being. Humana Inc. is publicly traded in the NYSE under HUM and is a for-profit company. Humana was founded in 1961 and has become the fifth-largest health insurance provider in the U.S. and the fourth-largest insurance company by revenue. Humana was given a BBB+ rating from Standard & Poor’s and a Baa3 rating from Moody’s Investors service. Bruce D. Boussard became the CEO of Humana in 2011, and has helped drive lower costs, improve health outcomes, and enhance the quality of the company.

As of December 2019, Humana had approximately 17 million members in their medical benefit plans and 5 million members in their specialty products. The net income for 2019 was $2.7 billion, compared to $1.7 billion the previous year. In 2019, Humana had a total revenue of $64,888,000, compared to 2018, which had a total revenue of $56,912,000. The company delivered above target adjusted earning per share (EPS), with 23 percent growth. The company also grew individual Medicare Advantage (MA) membership by over half a million members, or 17 percent. This was the highest growth seen in a decade and exceeded the industry’s growth.

The Humana Foundation, established by Humana co-founders David A. Jones and Wendell Cherry, created the foundation in 1981. Humana and The Humana Foundation have helped support the community with donations exceeding $300 million. In 2018, the foundation invested over $14.5 million in communities across the U.S. The foundation also supported 40+ charities in 2018 and continues to work to improve the health of communities throughout the country.

The Humana Foundation, established by Humana co-founders David A. Jones and Wendell Cherry, created the foundation in 1981. Humana and The Humana Foundation have helped support the community with donations exceeding $300 million.

Humana Inc. is publicly traded in the NYSE under HUM and is a for-profit company. Humana was given a BBB+ rating from Standard & Poor’s and a Baa3 rating from Moody’s Investors service.

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LOUISVILLE, KYHEADQUARTERS

OWNERSHIP INDUSTRY

LOCATIONSFOUNDED

HEALTHCARE

NATIONWIDE1961

PUBLIC

CEO

BRUCE D. BROUSSARD

CAO

TIM HUVAL

HUMANA

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TENANT SUMMARY

Miami, FL – August 27, 2019 – Cano Health, LLC, which operates medical centers and pharmacies in Florida that specialize in primary care for Seniors, is ranked No. 1 as the fastest-growing healthcare company – and No. 6 across all industries by Inc.magazine’s annual 5000 list, the most prestigious ranking of the nation’s fastest-growing private companies.

The ranking represents a unique look at the most successful companies within the American economy’s most dynamic segment—independent small businesses. Microsoft, Dell, Domino’s Pizza, Pandora, Timberland, LinkedIn, Yelp, Zillow, and others gained their first national exposure as honorees on the Inc. 5000.

“We are humbled and honored to have been ranked as the fastest-growing U.S. healthcare company by Inc.and sixth overall,” said Dr. Marlow Hernandez, CEO of Cano Health. “While we are being recognized for our tremendous growth, our true measure is found in fulfilling our core values. We are passionate and determined to always put our patients first and provide them with personalized, affordable care, while delivering excellent clinical results. And we are delighted to share that nearly 100% of our new patients are seen by one of our physicians within 30 days.”

MORE ABOUT CANO HEALTHCano Health currently operates 36 medical facilities across Florida and focuses on quality value-based care featuring an integrated care delivery model which centers around personalized patient care and a proactive approach to wellness and prevention. As part of its care coordination, Cano Health provides sophisticated, high-touch Population Health Management Programs includingpatient-centric programs such as home visits, telehealth, transition of care, and high risk and complex care management.

CANO HEALTH RANKS NO. 1 ON THE 2019 INC. 5000 LIST AS THE FASTEST- GROWING HEALTHCARE COMPANY – AND NO. 6 OVERALL WITH THREE-YEAR REVENUE GROWTH OF 14,000 PERCENT

AUGUST 27, 2019

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W M

ILITARY D

RIVE

MARBACH ROAD

SITE PLAN

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San Antonio

Leon ValleyAlamo Heights

Terrell Hills

China Grove

Cibolo

Cross Mountain

AtascosaElmendorf

Selma

Windcrest

Helotes

Universal City

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SAN ANTONIO, TEXASSan Antonio is the seventh most populous city in the United States and the second most populous city in both Texas and the Southern United States. San Antonio’s notable attraction includes the River Walk, the Tower of the Americas, SeaWorld, the Alamo Bowl, and Marriage Island. Commercial entertainment includes Six Flags Fiesta Texas and Morgan’s Wonderland amusement parks. According to the San Antonio Convention and Visitors Bureau, the city is visited by about 32 million tourists a year. It is home to the five-time NBA champion San Antonio Spurs, and hosts the annual San Antonio Stock Show & Rodeo, one of the largest such events in the United States.

The U.S. Armed Forces have numerous facilities in and around San Antonio; Fort Sam Houston is the only one within the city limits. Lackland Air Force Base, Randolph Air Force Base, Lackland AFB/Kelly Field Annex, Camp Bullis, and Camp Stanley are outside the city limits. Kelly Air Force Base operated out of San Antonio until 2001, when the airfield was transferred to Lackland AFB. The remaining parts of the base were developed as Port San Antonio, an industrial/business park and aerospace complex. San Antonio is home to six Fortune 500 companies and the South Texas Medical Center, the only medical research and care provider in the South Texas region.

The subject site is most influenced by: Lackland Air Force Base is home to more than 120 Department of Defense and associate organizations, including the 37th Training Wing, the largest training wing in the U.S. Air Force. Lackland is the Air Force’s only site for enlisted basic military training, and also offers professional and technical skills, and English language training for members of the U.S. Air Force, other military services, government agencies, and allies. Its four primary training functions graduate more than 86,000 students annually. In 2005, Lackland was recommended for joint basing for the three major installations around the city: Fort Sam Houston, Lackland AFB and Randolph AFB. In 2009, all 3 bases were included into Lackland AFB.

San Antonio has a diversified economy with a gross domestic product (GDP) of approximately $96.8 billion. This ranks the city fourth in Texas and 38th in the United States. San Antonio’s economy focuses primarily on military, health care, government-civil service, financial services, oil and gas, and tourism. Within the past twenty years, the city has become a significant location for American-based call centers and has added a sizable manufacturing sector centered around automobiles.

Located about 10 miles northwest of Downtown is South Texas Medical Center, a conglomerate of various hospitals, clinics, and research (Southwest Research Institute and Texas Biomedical Research Institute) and higher educational institutions.

LOCATION OVERVIEW

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Over twenty million tourists visit the city and its attractions every year, contributing substantially to its economy, primarily due to The Alamo and the River Walk. The Henry B. Gonzalez Convention Center alone hosts over 300 events annually with more than 750,000 convention delegates from around the world. Tourism provided over 130,000 jobs, and it had an economic impact of $13.6 billion in the local economy. The City of San Antonio received $195 million in the same year from the hospitality industry, with revenues from hotel occupancy tax, sales taxes and others.

San Antonio is the headquarters of six Fortune 500 companies: Valero Energy, Andeavor (formerly Tesoro Corp), USAA, iHeartMedia, NuStar Energy, and CST Brands, Inc., H-E-B, the 13th-largest private company in the US is also based in San Antonio. Other companies headquartered in the city include Bill Miller Bar-B-Q Enterprises, Carenet Healthcare Services, Security Service Federal Credit Union, Visionworks of America, Frost Bank, Harte Hanks, Kinetic Concepts, SWBC, NewTek, Rackspace, Taco Cabana, Broadway Bank, Zachry Holdings/Zachry Construction Company, Randolph-Brooks Federal Credit Union, SAS, and Whataburger. The North American Development Bank, a development institution jointly held by the governments of the U.S. and Mexico, is headquartered in San Antonio as well. Other notable companies that maintain sizable presences in the city include Hulu, OCI, Kaco New Energy, Silver Spring Networks, Toyota, Argo Group, EOG Resources, Microsoft, Cogeco Peer1, and Boeing.

In 2015, San Antonio was ranked at No. 50 by Forbes magazine on their list of the Best Places for Business and Careers, while being listed as the 15th best market for job growth.

The subject Humana: located at 7031 Marbach Rd, San Antonio, TX 78227 is in the epicenter and surrounded by the off-shoots of Lackland AFB. The main gate can be seen from the site. The Veterinary Treatment Facility, US Renal Care-Gateway, Texas Health and Human Services Commission, and H-E-B Pharmacy are all surrounding the site. Additionally, it is near well-known nationwide companies such as Wells Fargo, Enterprise Rent-A-Car, and Dollar Tree. In the surrounding area there are also popular chain restaurants such as Burger King, Pizza Hut, Little Caesars Pizza, McDonald’s, and Sonic Drive-In.

LOCATION OVERVIEW (CONTINUED)

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Across from subject property looking through the intersection

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San Antonio

Leon ValleyAlamo Heights

Terrell Hills

China Grove

Cibolo

Cross Mountain

AtascosaElmendorf

Selma

Windcrest

Helotes

Universal City

M A J O R E M P L O Y E R S : 2 0 17S A N A N T O N I O , T X

Joint Base San Antonio (JBSA) 75,972

H.E.B. Food Stores 22,000

USAA 17,163

Northside Independent School District 13,969

City of San Antonio 12,231

North East Independent School District 9,292

Methodist Health Care System 8,960

San Antonio Independent School District 7,374

Baptist Health Systems 6,432

Wells Fargo 5,010

LOCATION HIGHLIGHTS

Congested Traffic Counts exceed 41,000+ Vehicles Per Day

Strategically located for high visibility and

ease in ingress/egress

SAN ANTONIO, TXNEAR THE GATE OF LACKLAND AIR FORCE BASE

Located near the Gate of the Country’s largest

Air Force Base Training Center

Located just 12 Miles from Downtown San Antonio

12 Miles from Downtown San Antonio

3.4 Miles from Lackland Air Force Base

Lackland Air Force Base

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293,097Total Population Within 5-Mile Radius

$57,521Average Household Income

Within 5-Mile Radius

$46,225Median Household Income

Within 5-Mile Radius

92,8 57Total Households in 5-Mile Radius

48.08% From 2000

DEMOGRAPHICS / SAN ANTONIO, TX

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POPULATION 1 MILE 3 MILES 5 MILES2024 Projection 17,941 90,203 293,0972019A Estimate 18,047 88,245 287,735Growth 2019A - 2024 -0.59% 2.22% 1.86%2000 Census 16,368 64,915 208,8312010 Census 17,126 81,397 265,455Growth 2000 - 2010 4.63% 25.39% 27.11%

HOUSEHOLDS 1 MILES 3 MILES 5 MILES2024 Projections 5,656 27,334 92,8572019A Estimate 5,644 26,614 90,465Growth 2019A - 2024 0.21% 2.70% 2.64%

2000 Census 5,116 19,474 63,565

2010 Census 5,327 24,267 82,823Growth 2000 - 2010 4.12% 24.61% 30.30%

HOUSEHOLDS BY INCOME (2019A Est.) 1 MILES 3 MILES 5 MILES$200,000 or More 0.51% 0.72% 1.26%

$150,000 - $199,999 0.56% 1.10% 1.93%

$100,000 - $149,999 5.98% 7.57% 10.27%$75,000 - $99,999 10.81% 10.66% 11.75%$50,000 - $74,999 23.16% 21.70% 21.29%$35,000 - $49,999 16.25% 17.00% 15.49%$25,000 - $34,999 10.56% 12.54% 11.77%$15,000 - $24,999 15.85% 14.06% 11.92%$10,000 - $14,999 5.29% 5.40% 5.70%Under $9,999 11.03% 9.24% 8.62% 2019A Est. Average Household Income $48,120 $51,410 $57,521

2019A Est. Median Household Income $40,311 $41,975 $46,225

2019A Est. Per Capita Income $15,051 $16,066 $18,602

POPULATION PROFILE 1 MILES 3 MILES 5 MILES2019A Estimated Population by Age 18,047 88,245 287,735

Under 4 8.5% 8.3% 8.4%5 to 14 Years 16.7% 15.7% 15.8%15 to 17 Years 4.8% 4.3% 4.4%18 to 19 Years 2.8% 4.4% 3.7%20 to 24 Years 7.3% 10.6% 9.1%25 to 29 Years 8.0% 9.5% 8.9%30 to 34 Years 7.5% 8.2% 8.1%35 to 39 Years 6.9% 6.9% 7.2%40 to 49 Years 12.0% 10.6% 11.3%50 to 59 Years 10.3% 8.7% 9.4%60 to 64 Years 4.1% 3.5% 4.0%65 to 69 Years 3.4% 2.9% 3.3%70 to 74 Years 3.2% 2.5% 2.6%Age 75+ 4.5% 3.8% 3.8%

2019A Median Age 31.3 28.4 29.8

2019A Population 25 + by Education Level 10,818 49,992 168,494Elementary (0-8) 8.20% 7.24% 8.02%Some High School (9-11) 15.44% 12.55% 12.46%High School Graduate (12) 35.46% 33.20% 30.31%Some College (13-15) 24.40% 25.55% 24.20%Associates Degree Only 6.46% 7.27% 7.59%Bachelors Degree Only 6.99% 9.32% 10.69%

Graduate Degree 1.09% 2.81% 4.10%

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SAN ANTONIO TEXAS

LIOR REGENSTREIFSENIOR MANAGING DIRECTOR INVESTMENTS

SENIOR DIRECTOR, NET LEASED PROPERTIES GROUPENCINO OFFICE

Tel: (818) 212-2730Fax: (818) 212-2710

[email protected]: CA 01267761