Debt-Free TIC Property 7201 Cherokee Plaza Oklahoma City, Oklahoma Purchase Price $6,235,000 Artist s Rendering The Tenant in Common (TIC) interests offered and sold by Rockwell Debt-Free Properties constitute interests in real property. They do not constitute securities. Consequently, federal and state laws regulating the sale of securities do not apply with respect to the sale of TIC interests, and purchasers of TIC interests will not be entitled to the protections afforded to purchasers of securities under federal and state securities laws. Nothing in the attached offering documents should be construed as an offer or a solicitation of an offer to buy or sell securities.
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY The Tenant: Fresenius Medical Care is the world s leading provider of products and services for people with chronic kidney failure. Worldwide, more than 2.5 million patients with this disease regularly undergo dialysis therapy, a vital blood cleansing procedure that substitutes the function of the kidney in the case of kidney failure. Through their industry-leading network of more than 3,700 dialysis facilities, outpatient cardiac and vascular labs, and urgent care centers, as well as the country s largest practice of hospitalist and post-acute providers, Fresenius Medical Care provides coordinated health care services at pivotal care points for hundreds of thousands of chronically ill customers throughout the continent. As the world s only vertically integrated renal company, they also offer specialty pharmacy and laboratory services, as well as manufacturing and distributing the most comprehensive line of dialysis equipment, disposable products and renal pharmaceuticals. Their integrated approach helps to not only improve patients health outcomes, but also reduce the total cost of care. Around the world, they care for more than 317,000 renal patients in our global network of more than 3,700 dialysis clinics. At the same time, they operate more than 30 production sites on five continents, to provide dialysis products such as dialysis machines, dialyzers and related disposables. 317,792 PATIENTS SERVED 47 M TREATMENTS 3,714 CLINICS 37 PRODUCTION SITES 113,648 EMPLOYEES
EXECUTIVE SUMMARY The Lease: Fresenius Medical Care has committed to lease the property for an initial term of 15 years, which expires the end December 2032. During the initial term of the lease the base rent shall increase by 10% every five years. The lease also includes three consecutive options to extend the lease for a period of 5 years each. One of the more appealing aspects of this lease is that Fresenius Medical Care pays directly or reimburses all of the taxes, insurance premiums and maintenance costs of the building. Fresenius pays the Tenant s share of the operating expenses incurred by the Landlord during the term of the lease. Therefore, the property co-owners have very few active management duties rendering this triple-net lease property a passive, hassle-free, real estate investment. Some of the lease specifics are: Lease payment schedule: Lease guarantor: Initial lease term: Renewal options: Rent increases: Building Size: Monthly Fresenius Medical Care Holdings, Inc. 15 years Three 5-year options 10% every 5 years 13,628 square feet
PROPERTY DESCRIPTION
PROPERTY DESCRIPTION This brand new 13,628 square foot building is a very attractive brick structure that will be completed in January of 2018. The parking lot has spaces for 56 vehicles including five spots for the physically challenged. The interior is designed to be low-maintenance and boasts state-of-the-art equipment and amenities. Fresenius Medical Care North America has committed to a long-term lease with an initial period of 15-years and three 5-year renewal options to follow. Oklahoma City is a vibrant Midwestern community that serves as the state capitol and is home to some 1.4 million residents. Oklahoma City features one of the top livestock markets in the world, while its oil, natural gas, and petroleum resources are also major components of the city s growing economy. The federal government also employs many at the Tinker Air Force Base and the U.S. Department of Transportation s Mike Monroney Aeronautical Center located nearby. Renowned for its strong economy and excellent quality of life, OKC is home to several colleges and universities as well as multiple Fortune 500 companies. The city recently made Forbes Magazine s list of top places for business and careers. Oklahoma City offers an abundance of the arts, quality health care, excellence in education and more and it does so without high costs, energy shortages, smog or traffic congestion. It is a distinctly livable city and is also home to the Oklahoma City Thunder of the National Basketball Association. Included in the floor plan are the following; a large patient treatment area, reception area and business office with adjoining records room, waiting room, conference room, break room with full kitchen, private restrooms, exam room, large storage area, water treatment equipment room, classroom-style corporate training center and private offices for the on-site social worker and dietitian. In addition to the dialysis-related medical equipment, each of the treatment stations has its own large, flat screen monitor that can be used to watch television or movies or access the Internet while the patient is treated. The layout of the building makes for very efficient use of the space. The interior and exterior are very clean and well-maintained and provide a comfortable and inviting environment for staff and patients alike. Although this is a brand-new clinic, Fresenius has already established the tremendous demand that exists in the community and have many regular patients ready to start receiving treatments three times per week. Initially they will operate shifts on Monday, Wednesday and Friday with plans to add shifts on Tuesday, Thursday and Saturday in the near future as the patient base grows. In summary, because this is a brand-new medical facility providing a vital life-sustaining service to a population with an ever-increasing need, Fresenius plans to be in this clinic serving the people of this community for a very long time into the future.
PROPERTY DESCRIPTION
PROPERTY DESCRIPTION
PROPERTY DESCRIPTION
LEASE PROFILE
LEASE PROFILE Lease Term: 15-year base term YEAR ANNUAL RENT MONTHLY CAP RATE JANUARY 2018 $311,672 $25,972 5.00% JANUARY 2019 $311,672 $25,972 5.00% JANUARY 2020 $311,672 $25,972 5.00% JANUARY 2021 $311,672 $25,972 5.00% JANUARY 2022 $311,672 $25,972 5.00% JANUARY 2023 $342,839 $28,569 5.50% JANUARY 2024 $342,839 $28,569 5.50% JANUARY 2025 $342,839 $28,569 5.50% JANUARY 2026 $342,839 $28,569 5.50% JANUARY 2027 $342,839 $28,569 5.50% JANUARY 2028 $377,123 $31,426 6.05% JANUARY 2029 $377,123 $31,426 6.05% JANUARY 2030 $377,123 $31,426 6.05% JANUARY 2031 $377,123 $31,426 6.05% JANUARY 2032 $377,123 $31,426 6.05% Average Cap Rate: 5.52% over the initial lease term Renewal Options Three 5-year options Options to Extend: Landlord hereby grants to Tenant three (3) consecutive options to extend the term of the Lease each for a period of five (5) years. The lease of the Premises for each Option Term shall be on the same terms and conditions in the Lease except that the Base Rent for each Option Term shall be determined pursuant to the terms and conditions in Section 3.2 of the Lease. 3.2. Base Rent for Option Terms. Base Rent for each Option Term shall be equal to an amount that is the Fair Market Value of the Premises. 3.2.1. Fair Market Value. Fair Market Value shall be defined as the then fair market rental value of similar space served by the utilities detailed in this Lease that is comparable in size to the Premises, leased for a term comparable to the Option Term, and located in buildings equivalent in quality and location to the Building. Fair Market Value shall be based on space that is not (i) subleased, (ii) subject to another tenant s expansion or right of first refusal rights, or (iii) leased to a tenant that holds an ownership interest in or is otherwise affiliated with the Landlord. Operating Expenses and Utilities Property Taxes. Tenant shall pay before due all Tax Expenses assessed against the Property. Tenant s/landlord s Insurance Tenant s Insurance: Tenant covenants and agrees that throughout the Lease Term it will keep in full force and effect the following insurance policies: a. All risk property insurance, including fire and extended coverage, vandalism, malicious mischief, sprinkler leakage and water damage, demolition and debris removal and flood insurance (if the building is located in a flood hazard area) insuring, on a replacement cost basis, Alterations made by Tenant.
LEASE PROFILE b. Comprehensive general liability or public liability insurance with limits not less than $2,000,000 combined single limit, including coverage for bodily injury and property damage to third parties. Landlord s Insurance: Landlord covenants and agrees that throughout the Lease Term, it will keep in full force and effect the following insurance policies: a. All risk property insurance, including fire and extended coverage, vandalism, malicious mischief, sprinkler leakage and water damage, demolition and debris removal and flood insurance (if the Premises is located in a flood hazard area) insuring, on a replacement cost basis, Tenant Improvements and Alterations that Tenant is responsible for. Comprehensive general liability or public liability insurance with limits not less than $3,000,000 combined single limit, including coverage for bodily injury and property damage to third parties. b. Comprehensive general liability or public liability insurance with limits not less than $2,000,000 combined single limit, including coverage for bodily injury and property damage to third parties. Reimbursement of Landlord Insurance Expense: Tenant shall reimburse Landlord for landlord s costs associated with the insurance premiums (but not deductibles) for the insurance contained in Section 11.2(a). Repairs and Maintenance Maintenance, Repair, and Replacement at Lessor s Sole Cost: Tenant s Repair and Maintenance Obligations: (Section 7.1) During the Lease Term, Tenant shall, at its sole cost and expense, keep and maintain the non-structural portions of the interior of the Premises, including all Tenant Alterations, in good order and repair and free of refuse and rubbish. Landlord s Repair and Maintenance Obligations: (Section 7.2) (a) Without expense to Tenant, maintain and make all necessary repairs and/or replacements to the exterior and structural portions of the Property, Building and Premises, including, without limitation: foundations, including the slab, structure, load bearing walls, exterior walls, the roof and rood supports, columns, retaining walls, gutters, downspouts, flashings, and footings. b) Maintain and make all necessary repairs and/or replacements to the following, unless Tenant elects to maintain any of the following buy providing written notice to Landlord electing to do the same at its sole close and expense: parking areas (including surfacing, striping, paving and sealing), curbing, sidewalks and directional markers, ice and snow removal, water mains, gas and sewer lines, private roadways, landscape, loading docks, if any, and provision and repair of adequate lighting during all hours of darkness that Tenant shall be open for business. Tenant shall reimburse Landlord for the costs and expenses of the maintenance and repair contemplated in this Section 6.2(b) (the Maintenance Expenses ), except for the replacement of the parking lot or any other capital expenditure, as defined in Section 6.2(b)(vii) as additional rent for the same periods and in the same manner, time, and place as the Base Rent. *A full copy of the Fresenius Lease provided upon request.
Fresenius Medical Care OKLAHOMA CITY, OK DESCRIPTION Through their industry-leading network of more than 3,500 dialysis facilities, outpatient cardiac and vascular labs, and urgent care centers, as well as the country s largest practice of hospitalist and post-acute providers, Fresenius Medical Care provides coordinated health care services at pivotal care points for hundreds of thousands of chronically ill customers throughout the continent. As the world s only vertically integrated renal company, they also offer specialty pharmacy and laboratory services, as well as manufacturing and distributing the most comprehensive line of dialysis equipment, disposable products and renal pharmaceuticals. OKLAHOMA CITY, OK Oklahoma City is a vibrant Midwestern community that serves as the state capitol and is home to some 1.4 million residents. Oklahoma City features one of the top livestock markets in the world, while its oil, natural gas, and petroleum resources are also major components of the city s growing economy. The federal government also employs many at the Tinker Air Force Base and the U.S. Department of Transportation s Mike Monroney Aeronautical Center located nearby. Renowned for its strong economy and excellent quality of life, OKC is home to several colleges and universities as well as multiple Fortune 500 companies. The city recently made Forbes Magazine s list of top places for business and careers. Oklahoma City offers an abundance of the arts, quality health care, excellence in education and more and it does so without high costs, energy shortages, smog or traffic congestion. It is a distinctly livable city and is also home to the Oklahoma City Thunder of the National Basketball Association. ABOUT TENANTS-IN-COMMON Tenants-in-Common or TIC ownership allows multiple buyers to purchase an undivided percentage of a single piece of property. Each buyer receives his own deed to the property and benefits from all of the income, tax shelters and appreciation it provides. This Rockwell property has the following characteristics: $150,000 minimum investment amount Property is offered debt-free Long-term, corporate-guaranteed lease No closing costs Satisfies IRS requirements for 1031 exchanges ROCKWELL DEBT-FREE PROPERTIES 8494 South 700 East, Ste 200 Sandy, UT 84070 Artist s Rendering PROPERTY INFORMATION TENANT LOCATION PROPERTY TYPE BUILDING SIZE Fresenius Medical Care 7201 Cherokee Plaza Oklahoma City, OK LEASE INFORMATION Single-tenant, freestanding, medical 13,628 square feet PURCHASE PRICE $6,235,000 LEASE GUARANTOR INITIAL LEASE TERM RENT INCREASES RENEWAL OPTIONS Fresenius Medical Care Holdings 15 years 10% every 5 yrs. Three 5-year options AVERAGE RETURN: Initial Term: 5.52% YEAR ANNUAL RENT MONTHLY CAP RATE JAN 2018 $311,672 $25,972 5.00% JAN 2019 $311,672 $25,972 5.00% JAN 2020 $311,672 $25,972 5.00% JAN 2021 $311,672 $25,972 5.00% JAN 2022 $311,672 $25,972 5.50% JAN 2023 $342,839 $28,569 5.50% JAN 2024 $342,839 $28,569 5.50% JAN 2025 $342,839 $28,569 5.50% JAN 2026 $342,839 $28,569 5.50% JAN 2027 $342,839 $28,569 5.50% JAN 2028 $377,123 $31,426 6.05% JAN 2029 $377,123 $31,426 6.05% JAN 2030 $377,123 $31,426 6.05% JAN 2031 $377,123 $31,426 6.05% JAN 2032 $377,123 $31,426 6.05% Toll Free: 1-877-568-1031 Phone 801-568-1031 Info@RockwellTIC.com www.rockwelltic.com