DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER€¦ · DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER...

DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER

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2002 Lelaray Street, Colorado Springs, CO 80909

CONFIDENTIAL OFFERING MEMORANDUM

TABLE OF CONTENTSI. Executive Summary

II. Property Description

III. Tenant Overview

IV. Market Overview

V. Comparables

VI. Financial Analysis

JARED MAY

Associate

+1 719 471 6050

[email protected]

BRAD T. BIRD

Vice President

+1 719 471 6077

[email protected]

Contact Information:


© 2017 CBRE, Inc. All Rights Reserved.

EXECUTIVE SUMMARYDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER

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THE OFFERING:CBRE is pleased to offer for sale this premier, NNN, stabilized

investment asset in Colorado Springs. With long-term

leases in place, this offering provides qualified investors the

opportunity to own DaVita’s pre-eminent dialysis center in

Colorado. Co-tenanted with a Azura vascular care center,

2002 Lelaray is a unique investment asset in Colorado’s most

attractive medical market.

List Price: $7,500,000

Cap Rate: 6.25% year-one NOI

6.80% year-five NOI

Tenants: DaVita Dialysis

Azura Vascular Care

Lease Terms: 10-Years NNN

Building Size: 18,604 SF

Acres: 2.72

Year Built / Renovated: 2001 / 2017

STABILIZED, LONG-TERM LEASES

INVESTMENT HIGHLIGHTSTENANTS

DAVITA DIALYSIS +

AZURA VASCULAR CARE

NNN LEASE CLOSE PROXIMITY TO TWO PRIMARY HOSPITALS



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FINANCIAL HIGHLIGHTS

DAVITA

Current Term: 10 Years 9/1/2017 – 8/31/2027

Current Term Base Rent $3,018,443.90

Annual Escalations: 2%

SF: 12,486 sf (67.11%)

Year-1 Lease Rate: $24.00 PSF + NNN

Year-1 NOI: $286,800.83

Year-5 NOI: $310,442.44

Renovation: 2014

Renewal Options: (3) 5-Year Options:

Notes: This location is featured in DaVita’s

national marketing materials. It is a 40

station unit, one of their largest in the

country. DaVita recently purchased

the largest private, multi-specialty

physician groups in the market and is

actively expanding services rendered

in the market through this location,

including home peritoneal dialysis

and home hemodialysis through this

center.

AZURA VASCULAR CARE

Current Term: 9.5 Years 2/13/2017 – 2/28/2027

Current Term Base Rent $1,892,434.28

Annual Escalations: 3%

SF: 6,118 sf (32.89%)

Year-1 Lease Rate: $27.00 PSF + NNN

Year-1 NOI: $165,078.00

Year-5 NOI: $185,796.75

Renovation: 2017

Renewal Options: (2) 5-Year Options:

Notes: Azura signed a new lease in 2017

and has spent nearly $1,000,000

improving their facilities, including the

ongoing $200,000 renovation for the

vascular access facility accreditation

that will be completed in Q1 2018.

Azura has selected this site as a long-

term investment location and has

committed considerable resources to

the site.


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PROPERTY DESCRIPTIONDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER

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PROPERTY FACTS

Property Address 2002 Lelaray Street,

Colorado Springs, CO 80909

Year Built 2001

Total Building Area 18,604 SF

Parking 100 Spaces (5.37/1,000 RSF - above market average)

Land Area 2.72 Acres

PROPERTY DESCRIPTION


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SITE PLAN

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PROXIMITY TO HOSPITALS


2 MILES

NOT TO SCALE

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PIKES PEAKPIKES PEAK

DOWNTOWNCOLORADO SPRINGS

DOWNTOWNCOLORADO SPRINGS

WALMARTWALMART

PATTY JEWETT GOLF COURSEPATTY JEWETT GOLF COURSE

N UNION BLVDN UNION BLVD

DaVita Dialysis & Fresenius Vascular Care Center

LELARAY STREET

LELARAY STREET

PALMER PARK BLVD

PALMER PARK BLVD

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MARKET OVERVIEWDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER

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COLORADO SPRINGS OVERVIEW

Colorado Springs sits at the base of Pikes Peak, one of the

most famous mountains in America. The city’s 2016 estimated

population is 678,000 and has a growth projection of 743,000

by 2020 (Colorado Springs Economic Development Corp.).

Although Colorado Springs has a small-town ambience,

the city covers 194.7 square miles, making it Colorado’s 2nd

largest city and the 40th largest city in the nation.

Colorado Springs enjoys more than 300 days of annual

sunshine, drawing over six million visitors annually.

Surrounded by nature in the middle of a metropolitan area,

outdoor enthusiasts enjoy the city’s bike trails, open spaces

and world-class ski resorts. Colorado Springs has numerous

arts and cultural venues. Other main attractions include

Garden of the Gods, the United States Air Force Academy,

Pikes Peak Highway and Summit House, Royal Gorge

Bridge and Park, the Pikes Peak International Hill Climb, the

Pikes Peak Marathon and the Hot Air Balloon Classic. The

city hosts some of the state’s most exclusive resort hotels,

including the historic Broadmoor Resort, the Cli� House and

the Cheyenne Mountain Resort.

Colorado Springs

40th largest US city

TOP METRO AREA TO START A BUSINESS, CNBC 2016

MOST AFFORDABLE CITIES, FORBES 2015

TOP 5 PLACES FOR OUTDOOR LOVERS, MONEY MAGAZINE 2015

NO. 5 BEST PLACE TO LIVE, US NEWS & WORLD REPORT 2016

NO. 2 BEST CITY TO BE A TECH WORKER, SMART ASSET 2015

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EDUCATION

Colorado Springs schools are exceptional, with both

public and private options that combine the latest in

creative and innovative teaching methods. Colorado

Springs School District #20 is a major district servicing

over 24,000 students in 34 schools throughout the

area. With 20 elementary schools, 7 middle schools,

7 high schools and 3 charter schools, the district is

known to be one of the highest performing school

districts in the state.

Higher education institutions include University of

Colorado at Colorado Springs – the fastest-growing

college in the state, Pikes Peak Community College –

a two-year university with three locations in Colorado

Springs, Colorado College – a private four-year

university, as well as Colorado Technical University,

Regis University, Nazarene Bible College and the Air

Force Academy. Four public school districts serve

the area, Academy School District No. 20, Cheyenne

Mountain School District No. 12, Colorado Springs

School District No. 11, and Falcon School District

No 49. The average education level for residents of

Colorado Springs goes well beyond high school, with

nearly 45 percent attaining an advanced degree.

Other higher education and professional development opportunities

throughout the Metro Denver area include:

*(approximate enrollment based on 2016 school websites)

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ECONOMY & EMPLOYMENT

Colorado Springs has a balanced, diverse economic base. Key industries are aerospace,

defense, clean technology, healthcare, higher education and information technology.

Medical devices, semiconductors, aerospace parts, electronics and special plastics

are but a few products manufactured here and sold around the world. Amateur sports

governing bodies and organizations based in Colorado Springs include the Olympic

Training Center and the United States Olympic Committee Headquarters. National

nonprofit organizations, ranging from Junior Achievement to the Space Foundation, have

also located their headquarters in the Pikes Peak region.

Colorado Springs current unemployment rate is 2.8% (April 2017), nearly a 20-year low.

Employment grew by 2.9% in 2016, with the economy adding approximately 8,000 new

jobs. According to Moody’s Analytics, the Colorado Springs GDP grew 3.0% in 2016, and is

projected to approach 4.0% growth in 2017 and 2018.

The cybersecurity and healthcare industries are taking center stage in Colorado Springs

economic resurgence. Colorado Springs has taken advantage of its technically trained

workforce to become the epicenter of the burgeoning cybersecurity industry in the state

and country. The new National Cybersecurity Center assist businesses and governmental

agencies with computer security threats while the Air Force Academy’s Cyberworx center

helps local colleges and businesses improve their cybersecurity skills. Additionally,

several new hospitals are either planned, under construction, or being renovated. These

include the $110M Children’s Hospital campus in northern Colorado Springs, the new 52-

bed UCHealth Grandview Hospital adjacent to the University of Colorado campus, and

the $100M expansion to the Penrose St Francis Medical Center Campus adjacent to the

recently built VA Hospital in Western Colorado Springs.

Colorado Springs top private employers include:

» Lockheed Martin Corporation

» Progressive Insurance Company

» The Broadmoor Hotel Hotel/Resort

» United Services Automobile Association

» Verizon Business Software

» Atmel Corporation

» Northrop Grumman Corporation

» Compassion International

» Colorado College

» Comcast

» Hewlett Packard Enterprise

» T. Rowe Price

» Oracle America, Inc.

» DuPuy Synthes Companies

» Harris Corporation

(Colorado Springs Regional Business Alliance, 2016)

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TENANT OVERVIEWDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER

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DaVita Inc., a Fortune 500® company, is one of the

nation's largest and most innovative healthcare

communities, leveraging a passion for and

commitment to clinical excellence and improving

patients' health and quality of life.

As an operating division of DaVita, DaVita Kidney

Care focuses on setting worldwide standards for

clinical, social and operational practices in kidney

care. From raising awareness of the silent epidemic

that is chronic kidney disease to providing industry-

leading, no-cost diet- and health-management

resources to people diagnosed with it, DaVita

Kidney Care continues its pursuit to keep people

o� dialysis as long as possible—and to improve

access to treatment and quality of life for those

who do need dialysis.

TENANT SUMMARY

Tenant Name Total Renal Care (Davita corp. guarantee)

Rentable Square Feet 12,486

Pro Rata Share of Building 67.11%

Lease Commencement June 25, 2001

Lease Expiration August 31, 2027

Current Lease Term Start Date September 1, 2017

Website www.davita.com

BASE RENT*

Lease Years Annual Rent Monthly Rent Annual Rent/SF

1 $299,664.00 $24,972.00 $24.00

2 $305,657.28 $25,471.44 $24.48

3 $311,770.43 $25,980.87 $24.97

4 $318,005.83 $26,500.49 $25.47

5 $324,365.95 $27,030.50 $25.98

6 $330,853.27 $27,571.11 $26.50

7 $337,470.34 $28,122.53 $27.03

8 $344,219.74 $28,684.98 $27.57

9 $351,104.14 $29,258.68 $28.12

10 $358,126.22 $29,843.85 $28.68

*Corporate Guaranty

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Azura Vascular Care (FVC) is wholly-owned by and

affiliated with the world’s largest provider of dialysis

services and products, Azura Medical Care North

America, recognized and respected as the premier

national leader in freestanding interventional

outpatient centers. Their board certified physicians

are specialists in dialysis access management

and innovators in the field of minimally invasive

therapies for a number of medical conditions. They

are committed to improving quality of life for their

patients with high quality healthcare that is readily

accessible, utilizes the latest technology, reduces

avoidable hospitalizations, and meets the needs of

the communities they serve.

TENANT SUMMARY

Tenant Name Azura Vascular Care

Rentable Square Feet 6,118

Pro Rata Share of Building 32.89%

Lease Commencement February 13, 2017

Lease Expiration February 28, 2027

Website www.Azuravascularcare.com

BASE RENT

Lease Years Annual Rent Monthly Rent Annual Rent/SF

1 $165,078.00 $13,756.50 $27.00

2 $170,030.34 $14,169.20 $27.81

3 $175,131.25 $14,594.27 $28.64

4 $180,385.19 $15,032.10 $29.50

5 $185,796.74 $15,483.06 $30.39

6 $191,370.65 $15,947.55 $31.30

7 $197,111.77 $16,425.98 $32.24

8 $203,025.12 $16,918.76 $33.21

9 $209,115.87 $17,426.32 $34.20

10 $215,389.35 $17,949.11 $35.23

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COMPARABLESDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER

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DAVITA DIALYSIS &

AZURA VASCULAR CARE CENTER

2002 LELARAY STREET

COLORADO SPRINGS, CO 80909

Rentable Square Feet 18,604 SF

Year built 2001

Sales Price Market

Tenant DaVita, Azura

Cap Rate Market

Price / SF Market

NOI (YR-5) $509,966

NOI / SF $27.41

AZURA MEDICAL CARE

1012 HAYES AVENUE

LA JUNTA, CO 81050


Year built 2016

Sales Price $4,071,057

Tenant Fesenius

Cap Rate 5.92%

Price / SF $796.37

NOI $227,944

NOI / SF $44.59

DAVITA DIALYSIS

1750 PIERCE STREET

LAKEWOOD, CO 80214


Year built 1985


Tenant DaVita

Cap Rate 6.17%

Price / SF $3,63.12

NOI $310,351

NOI / SF $22.40

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AZURA DIALYSIS CENTER

1001 RIVERSIDE DRIVE

NASHVILLE, TN 37206


Year built / Renovated 1966 / 2015


Tenant Azura

Cap Rate 6.10%

Price / SF $501.19

NOI $268,739

NOI / SF $30.57

DAVITA DIALYSIS

4805 PEARL ROAD

CLEVELAND, OH 44109




Tenant DaVita

Cap Rate 6.23%

Price / SF $229.27

NOI $125,193

NOI / SF $14.28

AZURAMEDICAL CARE

300 NORTH 1ST STREET

VINCENNES, IN 47591




Tenant Azura

Cap Rate 6.15%

Price / SF 447.15

NOI $233,422

NOI / SF $27.50

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FINANCIAL ANALYSISDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER

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*estimated

You are solely responsible for independently verifying the information in this Memorandum. ANY RELIANCE ON IT IS SOLELY AT YOUR OWN RISK.

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10*

JUN-17 JUN-18 JUN-19 JUN-20 JUN-21 JUN-22 JUN-23 JUN-24 JUN-25 JUN-26

Base Rental Revenue $470,818.43 $475,464.57 $486,686.88 $498,185.10 $509,966.16 $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01

Expense Reimbursement Revenue

~CAM $38,181.92 $39,136.47 $40,114.88 $41,117.75 $42,145.70 $43,199.34 $44,279.32 $45,386.30 $46,520.96 $47,683.99

~Insurance $6,419.00 $6,579.48 $6,743.96 $6,912.56 $7,085.37 $7,262.51 $7,444.07 $7,630.17 $7,820.93 $8,016.45

~Management Fee $11,400.00 $11,685.00 $11,977.13 $12,276.55 $12,583.47 $12,898.05 $13,220.50 $13,551.02 $13,889.79 $14,237.04

~Real Estate Taxes $26,278.68 $26,935.65 $27,609.04 $28,299.26 $29,006.75 $29,731.91 $30,475.21 $31,237.09 $32,018.02 $32,818.47

~Utilities $42,172.40 $43,226.71 $44,307.38 $45,415.06 $46,550.44 $47,714.20 $48,907.05 $50,129.73 $51,382.97 $52,667.55

~Total Reimbursement Revenue $124,452.00 $127,563.30 $130,752.38 $134,021.19 $137,371.72 $140,806.01 $144,326.17 $147,934.32 $151,632.68 $155,423.49

Operating Expenses

~CAM $(38,181.92) $(39,136.47) $(40,114.88) $(41,117.75) $(42,145.70) $(43,199.34) $(44,279.32) $(45,386.30) $(46,520.96) $(47,683.99)

~Insurance $(6,419.00) $(6,579.48) $(6,743.96) $(6,912.56) $(7,085.37) $(7,262.51) $(7,444.07) $(7,630.17) $(7,820.93) $(8,016.45)

~Management Fee $(11,400.00) $(11,685.00) $(11,977.13) $(12,276.55) $(12,583.47) $(12,898.05) $(13,220.50) $(13,551.02) $(13,889.79) $(14,237.04)

~Real Estate Taxes $(26,278.68) $(26,935.65) $(27,609.04) $(28,299.26) $(29,006.75) $(29,731.91) $(30,475.21) $(31,237.09) $(32,018.02) $(32,818.47)

~Utilities $(42,172.40) $(43,226.71) $(44,307.38) $(45,415.06) $(46,550.44) $(47,714.20) $(48,907.05) $(50,129.73) $(51,382.97) $(52,667.55)

~Total Operating Expense $(124,452.00) $(127,563.30) $(130,752.38) $(134,021.19) $(137,371.72) $(140,806.01) $(144,326.17) $(147,934.32) $(151,632.68) $(155,423.49)

Net Operating Income $470,818.43 $475,464.57 $486,686.88 $498,185.10 $509,966.16 $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01

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YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10*

JUN-22 JUN-23 JUN-24 JUN-25 JUN-26

Base Rental Revenue $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01

Expense Reimbursement Revenue

~CAM $43,199.34 $44,279.32 $45,386.30 $46,520.96 $47,683.99

~Insurance $7,262.51 $7,444.07 $7,630.17 $7,820.93 $8,016.45

~Management Fee $12,898.05 $13,220.50 $13,551.02 $13,889.79 $14,237.04

~Real Estate Taxes $29,731.91 $30,475.21 $31,237.09 $32,018.02 $32,818.47

~Utilities $47,714.20 $48,907.05 $50,129.73 $51,382.97 $52,667.55

~Total Reimbursement Revenue $140,806.01 $144,326.17 $147,934.32 $151,632.68 $155,423.49

Operating Expenses

~CAM $(43,199.34) $(44,279.32) $(45,386.30) $(46,520.96) $(47,683.99)

~Insurance $(7,262.51) $(7,444.07) $(7,630.17) $(7,820.93) $(8,016.45)

~Management Fee $(12,898.05) $(13,220.50) $(13,551.02) $(13,889.79) $(14,237.04)

~Real Estate Taxes $(29,731.91) $(30,475.21) $(31,237.09) $(32,018.02) $(32,818.47)

~Utilities $(47,714.20) $(48,907.05) $(50,129.73) $(51,382.97) $(52,667.55)

~Total Operating Expense $(140,806.01) $(144,326.17) $(147,934.32) $(151,632.68) $(155,423.49)

Net Operating Income $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01


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AFFILIATED BUSINESS DISCLOSURECBRE, Inc. operates within a global family of companies with many subsidiaries and

related entities (each an ³Affiliate²) 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, including CBRE Global Investors, Inc. or Trammell Crow

Company, may have or represent clients who have competing interests in the same

transaction. For example, Affiliates or their clients may have or express an interest

in the property described in this Memorandum (the ³Property²), and may be the

successful bidder for the Property. Your receipt of this Memorandum constitutes

your acknowledgement of that possibility and your agreement that neither CBRE,

Inc. nor any Affiliate has an obligation to disclose to you such Affiliates¹ interest or

involvement in the sale or purchase of the Property. In all instances, however, CBRE,

Inc. and its Affiliates will act in the best interest of their respective client(s), at arms¹

length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and

its Affiliates will conduct their respective businesses in a manner consistent with the

law and all fiduciary duties owed to their respective client(s).

CONFIDENTIALITY AGREEMENTYour receipt of this Memorandum constitutes your acknowledgement that (i) it is

a confidential Memorandum solely for your limited use and benefit in determining

whether you desire to express further interest in the acquisition of the Property, (ii)

you will hold it in the strictest confidence, (iii) you will not disclose it or its contents

to any third party without the prior written authorization of the owner of the Property

(³Owner²) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any

manner detrimental to the Owner or CBRE, Inc.

If after reviewing this Memorandum, you have no further interest in purchasing the

Property, kindly return it to CBRE, Inc.

DISCLAIMERThis Memorandum contains select information pertaining to the Property and

the Owner, and does not purport to be all-inclusive or contain all or part of the

information which prospective investors may require to evaluate a purchase of the

Property. The information contained in this Memorandum has been obtained from

sources believed to be reliable, but has not been verified for accuracy, completeness,

or fitness for any particular purpose. All information is presented ³as is² without

representation or warranty of any kind. Such information includes estimates

based on forward-looking assumptions relating to the general economy, market

conditions, competition and other factors which are subject to uncertainty and

may not represent the current or future performance of the Property. All references

to acreages, square footages, and other measurements are approximations. This

Memorandum describes certain documents, including leases and other materials,

in summary form. These summaries may not be complete nor accurate descriptions

of the full agreements referenced. Additional information and an opportunity to

inspect the Property may be made available to qualified prospective purchasers.

You are advised to independently verify the accuracy and completeness of all

summaries and information contained herein, to consult with independent legal and

financial advisors, and carefully investigate the economics of this transaction and

Property¹s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS

MEMORANDUM IS SOLELY AT YOUR OWN RISK.

The Owner expressly reserves 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 at any time with or without notice to you. All offers, counteroffers, and

negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have

any legal commitment or obligation except as set forth in a fully executed, definitive

purchase and sale agreement delivered by the Owner. PMStudio_August2017

JARED MAY

Associate

+1 719 471 6050

[email protected]

BRAD T. BIRD

Vice President

+1 719 471 6077

[email protected]

Contact Information:


2002 Lelaray Street, Colorado Springs, CO 80909

DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER€¦ · DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER...

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