$8,705, % CAP Rate. DeerfieldPartners. John Giordani Art Griffith (888)

Transcription

1 Tax Free 25 Year NNN $8,705, % CAP Rate Rent increases! Very rare in drugstore leases Important strategic location across from Walgreens True hard-corner location with 41,000 cars per day at intersection San Antonio is the 7th most populous city in the country, and 2nd largest city in Texas Infill location with dense population (16,851 residents within one mile radius) True NNN lease with zero landlord responsibilities Guaranteed by CVS corporate (NYSE:CVS) (888)

2 Investment Summary Price $8,705,000 CAP Rate 5.00% Annual Income $435,226 Years Guaranteed 24+ years Debt Offered free & clear. Attractive new loans available; please call to discuss. Great CVS location on the northeast corner of Marbach Road (16,665 cars per day) and West Military Drive (24,400 cars per day) approximately 12 miles southwest of downtown San Antonio. The property is strategically located in proximity to numerous major thoroughfares including Interstate 410 to the west, State Highway 151 to the north, and U.S. Highway 90 to the south. With a Walgreens operating across the street, it s clear this is a prime strategic location for CVS. Notable retailers at or near this intersection include Chevron, Family Dollar, Little Caesars Pizza, Dairy Queen, Domino s Pizza, and O Reilly Auto Parts. In addition to retailers, several sizable schools near the subject property result in a high volume of customer traffic. Approximately half a mile west is John Jay High School (2,900 students), which also contains a magnet school, the John Jay Science and Engineering Academy (750 students). Less than a mile northeast of the property is Anson Jones Middle School. Rental Increases -- Extremely Rare in Drugstore Leases Ask CAP Rate Years Annual NNN Income Percentage Increase Avg. Return / CAP Rate NNN Rent Increases Over Time Years 1-25 $435, % Years (option 1) $456, % 5.25% Years (option 2) $479, % 5.51% Years (option 3) $503, % 5.78% Years (option 4) $529, % 6.08% Years (option 5) $555, % 6.38% $435,226 $456,980 $479,902 $503,486 $529,104 $555,530 Avg. Annual Rent $470,113 Asking Price $8,705,000

3 Property Details and Lease Summary Address 7031 Marbach Road, San Antonio, TX Year Built 2015 Building Size 14,600 Square Feet Lot Size 1.69 acres Tenant CVS Pharmacy, Inc. (NYSE:CVS) Lease Start Date July 16, 2015 Lease End Date January 31, 2041 Renewal Options 5 Extension Periods of 5 Years Each (with 1 year prior notice). Located Just 12 Miles southwest of Downtown San Antonio Downtown San Antonio (9 Miles) Gateway Hill Golf Course Kelly Field Annex Wilford Hall Ambulatory Surgical Center Lackland Air Force Base / Interstate 410 (115,035 AADT) Cable Elementary School Sunnybrook Christian Academy Marbach Road (16,665 AADT) West Military Drive (24,400 AADT)

4 Regional Map / About San Antonio San Antonio is the seventh most populous city in the country and the second most populous city in Texas, with a population of 1,409,019. It was the fastest growing of the top 10 largest cities in the country from 2000 to 2010, and the second from 1990 to San Antonio is about 75 miles to the southwest of its neighboring city, Austin, the state capital. The city is also about 190 miles west of Houston and about 250 miles south of the Dallas/Fort Worth area. The US armed forces have numerous facilities here: Fort Sam Houston, Lackland Air Force Base, Randolph Air Force Base, and Lackland AFB/Kelly Field Annex, with Camp Bullis and Camp Stanley located just outside the city. 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. San Antonio has a diversified economy with an approximately $96.8 billion metropolitan GDP, ranking 4th among Texas metropolitan areas and 38th in the United States. San Antonio s economy is focused primarily within military, health care, government civil service, financial services, oil and gas and tourism sectors. Within the past twenty years, San Antonio has become a significant location for American-based call centers and has added a significant manufacturing sector centered around automobiles. Over twenty million tourists visit the city and its attractions every year, contributing substantially to the city s economy, primarily due to The Alamo and Riverwalk. Tourism employs 94,000 citizens and makes an economic impact of over $10.7 billion in the local economy. MAJOR EMPLOYERS IN SAN ANTONIO, TX # OF EMPLOYEES LACKLAND AIR FORCE BASE 37,097 FORT SAM HOUSTON-U.S. ARMY 32,000 H-E-B 20,000 USAA 17,000 NORTHSIDE ISD 12,751 RANDOLPH AIR FORCE BASE 11,068 NORTH EAST I.S.D. 10,052 CITY OF SAN ANTONIO 9,145 METHODIST HEALTHCARE SYSTEM 8,118 SAN ANTONIO I.S.D. 7,000 BAPTIST HEALTH SYSTEM 6,498 JP MORGAN CHASE 5,200 WELLS FARGO 5,153 ATT 4,200 BILL MILLER BBQ 3,540 CHRISTUS SANTA ROSA HEALTH CARE 3,360 CPS ENERGY 3,022

5 San Antonio, Texas Infill Location with Dense Population 1 Mile 3 Mile 5 Mile Population 16,851 91, ,239 Average Household Income $44,843 $49,875 $55,251 Site Plan Site Plan NW MILITARY DR SIGN 14,600 SF DRIVE THRU DRIVE THRU SIGN SIGN MARBACH RD 3

6 Greater access by the numbers CVS Health is uniquely positioned to provide access to care that s most convenient for each patient with our unmatched breadth of assets and channel-agnostic approach. The company is a market leader in retail pharmacy, pharmacy benefits management, specialty pharmacy, and retail medical clinics and very well-positioned in an era of consumer-directed health care. 1.7 billion prescriptions filled or managed annually CVS Health has captured one third of total U.S. prescription growth since million PBM plan members 7,800+ retail drug stores in 44 states, the District of Columbia, Puerto Rico, and Brazil Currently in 98 of the top 100 U.S. drugstore markets.

7 Approaching 1,000 MinuteClinic locations with a target of 1,500 locations by million patient visits since 2000 Nearly 50 health system affiliations Growth in Medicare lives lives in millions E With 10,000 baby boomers turning 65 every day, the Medicare-eligible population is increasing. We are wellpositioned to serve this market through our retail pharmacies, PBM, and SilverScript, currently the No. 2 Medicare Part D prescription drug plan. ~5 million customers per day in our retail pharmacies Specialty Drug Revenue in billions CVS Health includes the largest U.S. specialty pharmacy with $31 billion in revenues. $19 $22 $31 $12 More than 24,000 pharmacists across our enterprise % of Specialty Connect patients choose CVS/pharmacy for pick up

8 Financial highlights (in millions, except per share figures) % change Net revenues $ 177,526 $ 153, % Operating profit $ 10,338 $ 9, % Net income $ 5,319 $ 5, % Diluted EPS from continuing operations $ 4.91 $ % Free cash flow* $ 8,075 $ 6, % Stock price at year-end $ $ % Market capitalization at year-end $ 84,153 $ 107, % * Free cash flow is defined as net cash provided by operating activities less net additions to properties and equipment (i.e., additions to property and equipment plus proceeds from sale-leaseback transactions). Net revenue in billions of dollars Diluted EPS from continuing operations in dollars Annual cash dividends in dollars per common share

9 Results of Operations Summary of our Consolidated Financial Results YEAR ENDED DECEMBER 31, IN MILLIONS, EXCEPT PER SHARE AMOUNTS Net revenues $ 177,526 $ 153,290 $ 139,367 Cost of revenues 148, , ,000 Gross profit 28,857 26,528 25,367 Operating expenses 18,519 17,074 16,568 Operating profit 10,338 9,454 8,799 Interest expense, net 1, Loss on early extinguishment of debt Income before income tax provision 8,637 8,616 7,678 Income tax provision 3,317 3,386 3,033 Income from continuing operations 5,320 5,230 4,645 Income (loss) from discontinued operations, net of tax (1) 9 (1) Net income 5,319 5,239 4,644 Net income attributable to noncontrolling interest (2) (2) Net income attributable to CVS Health $ 5,317 $ 5,237 $ 4,644 Diluted earnings per share: Income from continuing operations attributable to CVS Health $ 4.91 $ 4.62 $ 3.96 Income (loss) from discontinued operations attributable to CVS Health $ $ 0.01 $ Net income attributable to CVS Health $ 4.90 $ 4.63 $ 3.96 Net revenues increased $24.2 billion in 2016 compared to 2015, and increased $13.9 billion in 2015 compared to As you review our performance in this area, we believe you should consider the following important information: During 2016, net revenues in our Pharmacy Services Segment increased 19.5% and net revenues in our Retail/ LTC Segment increased 12.6% compared to the prior year. The Retail/LTC Segment benefited from the 2015 acquisitions of Omnicare and the pharmacies and clinics of Target.

10 Five-Year Financial Summary IN MILLIONS, EXCEPT PER SHARE AMOUNTS Statement of operations data: Net revenues $ 177,526 $ 153,290 $ 139,367 $ 126,761 $ 123,120 Gross profit 28,857 26,528 25,367 23,783 22,488 Operating expenses 18,519 17,074 16,568 15,746 15,278 Operating profit 10,338 9,454 8,799 8,037 7,210 Interest expense, net 1, Loss on early extinguishment of debt Income tax provision (1) 3,317 3,386 3,033 2,928 2,436 Income from continuing operations 5,320 5,230 4,645 4,600 3,869 Income (loss) from discontinued operations, net of tax (1) 9 (1) (8) (7) Net income 5,319 5,239 4,644 4,592 3,862 Net (income) loss attributable to noncontrolling interest (2) (2) 2 Net income attributable to CVS Health $ 5,317 $ 5,237 $ 4,644 $ 4,592 $ 3,864 Per share data: Basic earnings per share: Income from continuing operations attributable to CVS Health $ 4.93 $ 4.65 $ 3.98 $ 3.78 $ 3.05 Income (loss) from discontinued operations attributable to CVS Health $ $ 0.01 $ $ (0.01) $ (0.01) Net income attributable to CVS Health $ 4.93 $ 4.66 $ 3.98 $ 3.77 $ 3.04 Diluted earnings per share: Income from continuing operations attributable to CVS Health $ 4.91 $ 4.62 $ 3.96 $ 3.75 $ 3.02 Income (loss) from discontinued operations attributable to CVS Health $ $ 0.01 $ $ (0.01) $ (0.01) Net income attributable to CVS Health $ 4.90 $ 4.63 $ 3.96 $ 3.74 $ 3.02 Cash dividends per share $ 1.70 $ 1.40 $ 1.10 $ 0.90 $ 0.65 Balance sheet and other data: Total assets (1) $ 94,462 $ 92,437 $ 73,202 $ 70,550 $ 65,474 Long-term debt $ 25,615 $ 26,267 $ 11,630 $ 12,767 $ 9,079 Total shareholders equity $ 36,834 $ 37,203 $ 37,963 $ 37,938 $ 37,653 Number of stores (at end of year) 9,750 9,681 7,866 7,702 7,508

11 Demographics - 1 Mile Radius Demographic and Income Profile 7031 Marbach Rd, San Antonio, Texas, Prepared by Esri Ring: 1 mile radius Latitude: Longitude: Trends Annual Rate (in percent) Population Households Families Owner HHs Median HH Income Area State USA Population by Age Percent Household Income $25K - $34K 13.4% $35K - $49K 17.7% $15K - $24K 16.4% $50K - $74K 18.3% <$15K 18.5% $150K - $199K 1.0% $200K+ $100K - $149K 0.4% 4.6% $75K - $99K 9.6% 2017 Population by Race Percent White Black Am. Ind. Asian Pacific Other Two Percent Hispanic Origin: 84.5% Source: U.S. Census Bureau, Census 2010 Summary File 1. Esri forecasts for 2017 and October 12, Esri Page 2 of 6

12 Demographics - 1 Mile Radius Demographic and Income Profile 7031 Marbach Rd, San Antonio, Texas, Prepared by Esri Ring: 1 mile radius Latitude: Longitude: Summary Census Population 15,976 16,851 17,606 Households 4,965 5,187 5,411 Families 3,830 3,970 4,122 Average Household Size Owner Occupied Housing Units 3,048 2,995 3,093 Renter Occupied Housing Units 1,917 2,193 2,319 Median Age Trends: Annual Rate Area State National Population 0.88% 1.67% 0.83% Households 0.85% 1.63% 0.79% Families 0.75% 1.58% 0.71% Owner HHs 0.65% 1.58% 0.72% Median Household Income 1.13% 2.23% 2.12% Households by Income Number Percent Number Percent <$15, % % $15,000 - $24, % % $25,000 - $34, % % $35,000 - $49, % % $50,000 - $74, % % $75,000 - $99, % % $100,000 - $149, % % $150,000 - $199, % % $200, % % Median Household Income $35,937 $38,012 Average Household Income $44,843 $50,615 Per Capita Income $13,955 $15,732 Census Population by Age Number Percent Number Percent Number Percent 0-4 1, % 1, % 1, % 5-9 1, % 1, % 1, % , % 1, % 1, % , % 1, % 1, % , % 1, % 1, % , % 2, % 2, % , % 1, % 2, % , % 1, % 1, % , % 1, % 1, % % 1, % 1, % % % % % % % Census Race and Ethnicity Number Percent Number Percent Number Percent White Alone 10, % 11, % 12, % Black Alone % % % American Indian Alone % % % Asian Alone % % % Pacific Islander Alone 8 0.1% 9 0.1% 9 0.1% Some Other Race Alone 3, % 3, % 3, % Two or More Races % % % Hispanic Origin (Any Race) 13, % 14, % 15, %

13 Demographics - 3 Mile Radius Demographic and Income Profile 7031 Marbach Rd, San Antonio, Texas, Prepared by Esri Ring: 3 mile radius Latitude: Longitude: Trends Annual Rate (in percent) Population Households Families Owner HHs Median HH Income Area State USA Population by Age Percent Household Income $35K - $49K 16.1% $25K - $34K 14.8% $50K - $74K 20.3% $15K - $24K 14.6% <$15K 14.9% $200K+ 0.5% $150K - $199K 1.7% $100K - $149K 6.6% $75K - $99K 10.4% 2017 Population by Race Percent White Black Am. Ind. Asian Pacific Other Two Percent Hispanic Origin: 73.4%

14 Demographics - 3 Mile Radius Demographic and Income Profile 7031 Marbach Rd, San Antonio, Texas, Prepared by Esri Ring: 3 mile radius Latitude: Longitude: Summary Census Population 81,910 91,625 98,123 Households 24,397 27,165 29,263 Families 18,014 19,679 20,985 Average Household Size Owner Occupied Housing Units 13,533 13,823 14,707 Renter Occupied Housing Units 10,864 13,342 14,556 Median Age Trends: Annual Rate Area State National Population 1.38% 1.67% 0.83% Households 1.50% 1.63% 0.79% Families 1.29% 1.58% 0.71% Owner HHs 1.25% 1.58% 0.72% Median Household Income 1.58% 2.23% 2.12% Households by Income Number Percent Number Percent <$15,000 4, % 4, % $15,000 - $24,999 3, % 3, % $25,000 - $34,999 4, % 3, % $35,000 - $49,999 4, % 4, % $50,000 - $74,999 5, % 5, % $75,000 - $99,999 2, % 3, % $100,000 - $149,999 1, % 2, % $150,000 - $199, % % $200, % % Median Household Income $39,130 $42,311 Average Household Income $49,875 $56,258 Per Capita Income $16,524 $18,421 Census Population by Age Number Percent Number Percent Number Percent 0-4 7, % 7, % 8, % 5-9 6, % 7, % 7, % , % 6, % 7, % , % 8, % 8, % , % 10, % 10, % , % 15, % 16, % , % 11, % 12, % , % 9, % 9, % , % 7, % 8, % , % 4, % 5, % , % 2, % 2, % % % 1, % Census Race and Ethnicity Number Percent Number Percent Number Percent White Alone 56, % 61, % 65, % Black Alone 6, % 7, % 8, % American Indian Alone % % % Asian Alone 1, % 1, % 1, % Pacific Islander Alone % % % Some Other Race Alone 14, % 16, % 16, % Two or More Races 2, % 3, % 3, % Hispanic Origin (Any Race) 58, % 67, % 73, %

15 Demographics - 5 Mile Radius Demographic and Income Profile 7031 Marbach Rd, San Antonio, Texas, Prepared by Esri Ring: 5 mile radius Latitude: Longitude: Trends Annual Rate (in percent) Population Households Families Owner HHs Median HH Income Area State USA Population by Age Percent Household Income $35K - $49K 16.2% $25K - $34K 12.7% $50K - $74K 21.0% $15K - $24K 12.8% $75K - $99K 11.2% <$15K 14.0% $200K+ 1.1% $150K - $199K 2.2% $100K - $149K 9.0% 2017 Population by Race Percent White Black Am. Ind. Asian Pacific Other Two Percent Hispanic Origin: 75.6%

16 Demographics - 5 Mile Radius Demographic and Income Profile 7031 Marbach Rd, San Antonio, Texas, Prepared by Esri Ring: 5 mile radius Latitude: Longitude: Summary Census Population 264, , ,138 Households 82,714 90,718 96,793 Families 61,509 66,573 70,521 Average Household Size Owner Occupied Housing Units 48,695 49,876 52,588 Renter Occupied Housing Units 34,019 40,842 44,205 Median Age Trends: Annual Rate Area State National Population 1.26% 1.67% 0.83% Households 1.30% 1.63% 0.79% Families 1.16% 1.58% 0.71% Owner HHs 1.06% 1.58% 0.72% Median Household Income 2.01% 2.23% 2.12% Households by Income Number Percent Number Percent <$15,000 12, % 13, % $15,000 - $24,999 11, % 11, % $25,000 - $34,999 11, % 11, % $35,000 - $49,999 14, % 14, % $50,000 - $74,999 19, % 19, % $75,000 - $99,999 10, % 12, % $100,000 - $149,999 8, % 10, % $150,000 - $199,999 2, % 2, % $200, % 1, % Median Household Income $43,626 $48,192 Average Household Income $55,251 $62,680 Per Capita Income $18,116 $20,405 Census Population by Age Number Percent Number Percent Number Percent , % 24, % 26, % , % 23, % 24, % , % 21, % 23, % , % 23, % 24, % , % 27, % 27, % , % 48, % 52, % , % 36, % 40, % , % 30, % 30, % , % 26, % 27, % , % 17, % 20, % , % 8, % 10, % 85+ 2, % 2, % 3, % Census Race and Ethnicity Number Percent Number Percent Number Percent White Alone 186, % 201, % 213, % Black Alone 17, % 20, % 22, % American Indian Alone 2, % 2, % 3, % Asian Alone 3, % 5, % 6, % Pacific Islander Alone % % % Some Other Race Alone 44, % 50, % 52, % Two or More Races 9, % 11, % 12, % Hispanic Origin (Any Race) 197, % 220, % 237, %