DaVita Dialysis - Northern California

DaVita Dialysis
OFFERING MEMORANDUM
Walnut Creek, California
Christopher Sheldon
415-677-0441
[email protected]
Lic #01806345
James Chung
408-436-3630
[email protected]
Lic #01408190
Andrew Bogardus
415-677-0421
[email protected]
Lic #00913825
www.thinknnn.com
Disclaimer
The Materials have been prepared to provide unverified summary financial, property,
and market information to a prospective purchaser to enable it to establish a preliminary
level of interest in potential purchase of the Property. The Materials are not to be
considered fact. The information contained in the Materials is not a substitute for
thorough investigation of the financial, physical, and market conditions relating to the
Property.
The information contained in the Materials has been obtained by Agent from sources
believed to be reliable; however, no representation or warranty is made regarding the
accuracy or completeness of the Materials. Agent makes no representation or warranty
regarding the Property, including but not limited to income, expenses, or financial
performance (past, present, or future); size, square footage, condition, or quality
of the land and improvements; presence or absence of contaminating substances
(PCB’s, asbestos, mold, etc.); compliance with laws and regulations (local, state, and
federal); or, financial condition or business prospects of any tenant (tenants’ intentions
regarding continued occupancy, payment of rent, etc). A prospective purchaser must
independently investigate and verify all of the information set forth in the Materials. A
prospective purchaser is solely responsible for any and all costs and expenses incurred
in reviewing the Materials and/or investigating and evaluating the Property.
Photographs: The aerials in this offering memorandum show the actual property that
is being offered for sale.
By receiving the Materials you are agreeing to the Confidentiality and Disclaimer set
forth herein.
The information contained in this marketing brochure (“Materials”) is proprietary
and confidential. It is intended to be reviewed only by the person or entity receiving
the Materials from Cassidy Turley Northern California (“Agent”). The Materials are
intended to be used for the sole purpose of preliminary evaluation of the subject
property/properties (“Property”) for potential purchase.
DaVita Dialysis
i
ROS
SM
OO
R
TICE VALLEY
COMMUNITY GYMNASIUM
Y
WA
K
R
PA
MANORCARE
HEALTH SERVICES
TICE VALLEY BOULEVARD
ROSSMOOR
SHOPPING CENTER
ROSSMOOR MEDICAL ASSOC.
LABCORP
JOHN MUIR
OUTPATIENT CENTER
KINDRED CARE
MANORCARE
HEALTH SERVICES
ATRIA VALLEY VIEW
SENIOR LIVING
Under Construction ‑ June 16, 2014
The Offering / Investment Highlights
The Offering
•
A 8,171± square feet medical office building located in Walnut Creek, California leased to TOTAL
RENAL CARE, INC., and guaranteed by DAVITA HEALTHCARE PARTNERS, INC., for 15 years. The
building was originally constructed in 1968 as a USPS facility and has been completely rehabilitated
and retrofitted for DaVita Dialysis, including a new roof.
•
Price: $7,668,000 – 5.50% Cap Rate
Tenant / Lease
•
DaVita is a Fortune 500 company with a total stockholder’s equity of $4.4 billion.
•
DaVita’s total revenues for the fiscal year ended December 31, 2013 were $11.8 billion (43.7%
increase compared to fiscal year 2012), and net income was $744 million (16% increase).
•
DaVita Healthcare Partners, Inc. (NYSE: DVA) is one of the Top 10 2014 holdings of Warren Buffett’s
Berkshire Hathaway.
•
DaVita stock price is up 49% in the last two years
•
DaVita controls 33% of the U.S. dialysis market.
•
New 15 year net lease with 10% rent increases every 5 years.
Real Estate / Area Strengths
•
he property is less than ¼ mile from Rossmoor, one of the largest senior communities in the Bay
T
Area, with 6,700 residential units and a population of 9,200.
•
The property is located near John Muir Outpatient Center and Kaiser Permanente, and surrounded by
numerous senior and assisted living facilities and medical offices.
•
Adjacent to the Rossmoor Shopping Center anchored by Safeway and CVS.
•
Walnut Creek is an affluent San Francisco Bay Area community – $126K Average Household Income
within five miles of the subject property.
•
Walnut Creek was listed among the 10 best places to retire in the U.S. by CBS Money Watch and
U.S. News (2012).
•
Extremely high barriers to entry market.
•
Walnut Creek owns more open space per capita than any other municipality in California.
•
Unemployment rate of only 4.1%
DaVita
FedEx
SKF USA,
Dialysis
Ground
Inc.
iii
2i
DaVita Dialysis
Table of Contents
Disclaimeri
Aerialii
The Offering / Investment Highlights
iii
Investment Overview
1
DaVita Healthcare Partners, Inc.
2
Site Plan
3
Area Map
4
Aerial5
Location Map
6
Aerial7
Rossmoor8
Walnut Creek
Walnut Creek Open Space
Transportation
9
11
12
Demographics13
Christopher Sheldon
415-677-0441
[email protected]
Lic #01806345
James Chung
408-436-3630
[email protected]
Lic #01408190
Andrew Bogardus
415-677-0421
[email protected]
Lic #00913825
www.thinknnn.com
Investment Overview
Location
Annual Rent
1221 Rossmoor Parkway, Walnut Creek, California
Investment Years
Lot Size
Approximately 1.22 acres – 53,143± square feet
Improvements
A single story 8,171± square foot medical office building, originally constructed
in 1968, and recently rehabilitated and retrofitted as a DAVITA DIALYSIS facility,
including a new roof.
Lease
Leased to TOTAL RENAL CARE, INC., and guaranteed by DAVITA HEALTHCARE
PARTNERS, INC., for 15 years from a date estimated to be NOVEMBER 5, 2014 until
November 2029. The estimated annual net rent of $421,732 increases by 10% every
five years throughout the primary term. The lease is net with the tenant responsible
for taxes, insurance and maintenance. The landlord is responsible for maintaining and
replacing the roof, structure, exterior plumbing and electrical systems, and parking areas
and driveways, and replacement of HVAC (not maintenance). Tenant will reimburse
landlord on an amortized basis the cost for replacement of the roof, parking areas and
HVAC. Tenant will also reimburse up to $1,000/year in roof maintenance expenses.
There are three 5-year renewal options at 95% of appraised Fair Market Value (FMV)
rent. If the tenant exercises its options, the guarantee by DaVita Healthcare Partners,
Inc., terminates at that point.
Annual Rent
Return
1–5
$421,732*
5.50%
6 – 10
$463,905
6.05%
11 – 15
$510,296
6.65%
16 – 20 (Option 1)
FMV
TBD
21 – 25 (Option 2)
FMV
TBD
26 – 30 (Option 3)
FMV
TBD
* Initial rent figure is subject to change based on final calculation approximately 90 days after
completion. Price will adjust accordingly based on cap rate.
Price: $7,668,000 – 5.50% Cap Rate
Financing
The property will be delivered free and clear of debt.
Ownership / Option to Purchase
Seller is not the present owner of the Property. Seller has an option to purchase the
Property pursuant to a certain December 20, 2012 Option to Repurchase, a copy of
which will be provided to Buyer upon request. DaVita Dialysis
1
DaVita Healthcare Partners, Inc.
About the Tenant
The tenant is a 100%-owned DaVita subsidiary, “Total Renal Care, Inc.” Financial
statements are not available.
About the Guarantor – DaVita Healthcare Partners, Inc.
DAVITA HEALTHCARE PARTNERS, INC. (“DAVITA”), a FORTUNE 500® company,
is a leading provider of kidney care in the United States, delivering dialysis services
and education to patients with chronic kidney disease and end stage renal disease. It
is listed on the NYSE: “DVA.” As of March 31, 2014, DaVita operated or provided
administrative services at 2,098 outpatient dialysis centers in the United States. The
company also operated 75 outpatient dialysis centers located in 10 countries outside
the United States. It was founded in 1992 and is headquartered in Denver.
For the fiscal year ended December 31, 2013, total revenues were $11.8 billion (an
43.7% increase compared to fiscal year 2012) and a net income was $744 million
(16% increase). Total stockholder’s equity was $4.4 billion.
DaVita controls 33% of the U.S. dialysis market and Fresenius Medical Center controls
37%. The rest of the market is fragmented, served by hospitals and much smaller
chains.
DaVita is rated “BB–” by Standard and Poor’s.
More information can be obtained at www.davita.com
Representative DaVita Dialysis Facility Interior
DaVita Dialysis
2
Site Plan
Area Map
DaVita Dialysis
4
MILBRAE
HAYWARD
SAN BRUNO
SAN LEANDRO
DALY CITY
ALAMEDA
SAN FRANCISCO
MARIN COUNTY
OAKLAND
ORINDA
ST MARY’S
COLLEGE
MORAGA
LAFAYETTE
ROSSMOOR
Location
This DaVita Dialysis facility is located in the 1,800-acre Tice
Valley area of Walnut Creek, approximately two miles from
downtown and 25 miles from San Francisco. It is minutes
from Kaiser Permanente, Interstate 680, and Walnut Creek and
Lafayette BART stations.
The site is adjacent to Rossmoor, a nationally recognized and
award winning senior adult community, with approximately
6,700 residential units in three cooperatives, 14 condominiums
and single-family home developments. Amenities include two
NCGA-rated golf courses (one nine-hole and one 18-hole); a
large indoor pool and fitness complex, two outdoor pools, six
tennis courts, lawn bowling greens, bocce courts, hiking trails
and table tennis facilities. At least one resident must be 55
years of age or older to live in a home in Rossmoor.
The subject property is next to the Safeway anchored Rossmoor
Shopping Center, John Muir Health Outpatient Center, ManorCare
Health Services and Kindred Transitional Care & Rehab.
Vehicle Traffic Counts
Major Highways
2012 Avg Daily
Interstate 680
562,000
State Route 24
232,000
Roads
2012 Avg Daily
Olympic Boulevard
45,000
Rossmoor Parkway
18,200
Tice Creek Boulevard
18,600
DaVita Dialysis
6
680
DOWNTOWN WALNUT CREEK
BROADWAY PLAZA
680
THE VILLAS
CONDOMINIUMS
SOUTH VILLA
CONDOMINIUMS
MANORCARE
HEALTH SERVICES
JOHN MUIR
OUTPATIENT CENTER
ATRIA VALLEY VIEW
SENIOR LIVING
TICE OAKS APARTMENTS
91-UNIT SENIOR APTS
Rossmoor
At least one resident must be 55 years of age or older to live in Rossmoor.
Rossmoor offers excellent recreational facilities including 27 holes of NCGA-rated golf on an
18-hole and 9-hole course with practice areas and a driving range. There are three community
swimming facilities, a full-service fitness center, 10 outdoor tennis courts, lawn bowling greens,
bocce courts, billiards, and a state-of-the-art table tennis facility. In addition, Rossmoor is
surrounded by miles of beautiful hiking trails.
Rossmoor has 24-hour security, with a security staff that monitors the front gate and patrols
the community, responding to emergency and non-emergency requests. Rossmoor also has its
own bus service that takes residents throughout the community, to nearby shopping areas and
to BART.
Rossmoor residents participate in an abundance of activities, including concerts, dances and
classes covering art to literature. The community has five clubhouses and a large event center
for major theatrical productions, a movie theater, a full-service restaurant and bar, a computer
information center, hobby and craft rooms, picnic grounds, meeting rooms and a social center.
Development of the community began in 1963, and today there are approximately 6,700
residential units, ranging from co-ops, to condos, single-family homes and congregate
living. Homes vary in price from low $100,000s for some co-ops, to around $400,000 to
$600,000 for some condos and to over $1 million for the single-family homes and gardenstyle condominiums. Local real estate companies handle the sales of Rossmoor homes.
In addition to programs provided by the community Recreation Department, which include
trips and entertainment, Rossmoor has more than 200 clubs and organizations that offer
numerous events and activities.
Rossmoor is a gated nationally recognized and award-winning active senior adult community
located in the picturesque 1,800-acre Tice Valley area of Walnut Creek, California. Rossmoor
offers great views, lush open space and pristine neighborhoods.
ROSSMOOR
Lake Charles (continued)
680
680
Walnut Creek
Walnut Creek, in Contra Costa County, is located 16 miles east of Oakland and 24 miles
from San Francisco in Northern California. It lies in the East Bay region of the San
Francisco Bay Area. Walnut Creek serves as the business and entertainment hub for the
neighboring cities within central Contra Costa County, due in part to its location at the
junction of the highways from Sacramento and San Jose (I-680) and San Francisco/
Oakland (SR-24). The city’s total estimated population, as of 2013, is 65,511.
Average household income exceeds $107,000 per year, with nearly 55% of households
earning greater than $75,000 and more than 42% of residents earning over $100,000
per year. In terms of education, 42% of residents have four or more years of college and
beyond.
In 2012, the city was listed among the 10 best places to retire in the U.S. by CBS Money
Watch and U.S. News.
Walnut Creek (continued)
Major Employers
Employer
Schools
Employee Count
School District
1.
John Muir Medical Center
6,500
Mt Diablo School District
2.
Kaiser Permanente Medical Center
4,500
Walnut Creek School District
3.
Bay Area News Group
1,000
4.
CVS Pharmacy
1,000
5.
PMI Group
500
6.
Walnut Creek School District
400
7.
Target
375
8.
Nordstrom
350
9.
Macy’s
250
Tourism
200
Major Hotels
10. Neiman Marcus
Companies based in Walnut Creek include Carollo Engineers, Central Garden & Pet,
American Reprographics Company, and the PMI Group.
Housing Information
Values and Prices 2012
Number of Schools
Number of Students
55
33,987
6
3,500
College/University
Location
Diablo Valley College
Pleasant Hill
Student Population
Los Medanos College
Pittsburg
9,364
St. Mary’s College of California
Moraga
4,100
22,000
Number of Rooms
Marriott Walnut Creek
338
Embassy Suites
249
Lafayette Park Hotel
138
Club Sport Renaissance
130
Avg Selling Price
Walnut Creek
$ 683,000
Alamo
$1,394,000
Concord
$ 408,000
Danville
$ 994,000
Lafayette
$1,168,000
Moraga
$1,050,000
San Ramon
$ 809,100
DaVita Dialysis
10
Walnut Creek Open Space
Lake Charles (continued)
Walnut Creek owns more open space per capita than any other communit
in California
In 1974, a $6.75 million bond was approved by the citizens of this community
to purchase and preserve the undeveloped ridgelines that surround the city
and contribute so much to its quality and character. With over 3,000 acres
of oak woodlands, grassland savannah, and chaparral, this is one of the
largest city operated open spaces in the San Francisco Bay Area.
Located within Shell Ridge is the historic Borges Ranch, placed on the
National Registry of Historic Places in 1981. Established in 1899, this still
working cattle ranch features weathered barns and ranch buildings, corrals
and the restored Borges family home.
Lime Ridge encompasses both City of Walnut Creek and City of Concord
properties. It contains some the last remaining chaparral vegetation in the
area. This preserve area is rich in diversity of both plants and animals and is
protected more that other areas.
Sugarloaf presents an opportunity to stroll through one of the last walnut
orchards in the City. Acalanes Ridge straddles the ridge between Lafayette
and Walnut Creek providing vistas east toward Mt. Diablo and the other
Open Space units.
Lime Ridge Open Space
DaVita Dialysis
11
Transportation
Lake Charles (continued)
Pittsburg/Bay Point BART Station
The city hosts two BART (Bay Area Rapide Transit) stations,
the Walnut Creek station and the Pleasant Hill station, just
north of the city limits. BART provides regional transportation
to and from Walnut Creek to much of the Bay Area, including
Berkeley, Oakland, San Francisco, and the two major airports,
SFO and Oakland International.
DaVita Dialysis
12
Demographics
Census 2010 Summary
3 miles
5 miles
7 miles
Population
71,045
160,400
270,432
Households
32,732
68,109
108,487
Families
18,234
42,369
70,766
2.14
2.31
2.46
Owner Occupied Housing Units
22,245
47,568
74,275
Renter Occupied Housing Units
10,487
20,541
34,212
47.1
45.7
43.2
Average Household Size
Median Age
2013 Summary
Population
72,547
163,424
275,735
Households
33,421
69,353
110,474
Families
18,539
42,997
71,820
2.14
2.31
2.46
Owner Occupied Housing Units
22,180
47,400
73,929
Renter Occupied Housing Units
11,241
21,952
36,545
48.1
46.6
44.0
Average Household Size
Median Age
Median Household Income
$79,476
$91,615
$89,611
Average Household Income
$114,839
$126,753
$123,922
2018 Summary
Population
76,186
171,035
288,510
Households
35,166
72,677
115,683
Families
19,428
44,916
74,997
2.13
2.31
2.46
Owner Occupied Housing Units
23,553
50,148
78,118
Renter Occupied Housing Units
11,613
22,529
37,565
Average Household Size
49.0
47.5
44.9
Median Household Income
Median Age
$93,770
$105,352
$103,529
Average Household Income
$136,829
$151,652
$147,579
Population
0.98%
0.91%
0.91%
Households
1.02%
0.94%
0.93%
Families
0.94%
0.88%
0.87%
Owner Households
1.21%
1.13%
1.11%
Median Household Income
3.36%
2.83%
2.93%
Trends: 2013-2018 Annual Rate
Downtown Walnut Creek
Broadway Plaza
DaVita Dialysis
13
For more information please contact:
Christopher Sheldon
415-677-0441
[email protected]
Lic #01806345
James Chung
408-436-3630
[email protected]
Lic #01408190
Andrew Bogardus
415-677-0421
[email protected]
Lic #00913825
Cassidy Turley
www.thinknnn.com