Subject Property

Offering Memorandum , Inc. D/B/A Baptist Health System School of Health Professions 8400 Datapoint Drive | , TX 78229 Confidentiality and Restricted Use Agreement

This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC.

This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This Offered Exclusively by COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations Albert Muller or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions Associate Director of documentation and/or financial information contained herein are qualified in their entirety by reference to [email protected] the actual documents and/or financial statements, which upon request may be made available. An interested TX Lic# 459937 party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.

The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title.

BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and Stan Johnson Company claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request 10333 Richmond Ave | Suite 740 by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Houston, TX 77042 Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, P: +1 832.476.3440 you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or stanjohnsonco.com related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief. Section One Executive Summary

Subject Property The Offering Purchase Price: $12,000,000 Cap Rate: 7.50% Stan Johnson Company is pleased to offer for sale to qualified investors this +/- 66,263 square-foot, single- tenant nurse training center facility located in San Antonio, (the “Property”) and leased to Baptist Investment Highlights Health System School of Health Professions (the “Tenant”). Located in the South Texas Medical Center, a 900-acre Medical Complex which is the home to Strong Corporate Credit Retail In Close Proximity 10 major hospitals, 80 clinics, 56,000 medical jobs In October 2013, and Within walking distance of 140,000 SF of retail and servicing more than 3.4 million outpatient visits all of its markets (including the company doing 14+ hotels/motels within one mile. annually. This booming corridor is adjacent to the business as Baptist Health System School of Health South Texas Medical Center Location world headquarters of USAA Financial Services Professions) were purchased by and became part Located within the South Texas Medical Center Company and employer of 20,000 employees. The of Tenet Healthcare Corporation. This combined which includes: UT Health Science Center, Audie Property was originally leased to the Tenant for a 10- Tenant credit employs more than 100,000 people Murphy VA Hospital, CTRC, Brooke Army Medical year term with four consecutive option periods of five in 78 hospitals and other entities in 43 states. Tenet Center, Texas Cancer Clinic, Children’s Cancer years each. The Tenant invested more than $3 million Healthcare (NYSE: THC): Annual Sales: $18.6 Billion; Research Institute, Christus Santa Rosa Health in tenant improvements during the term of the lease. Net Worth $700 Million. System, Texas Neuroscience Institute, St. Luke’s The Tenant is wholly owned by Tenet Healthcare, Inc., Long-Term Location Baptist Hospital, Methodist Healthcare System. (NYSE: THC) with over $18.6 Billion in annual sales. 10-year original lease term. Tenant executed first of Hospital Gross Patient Revenue in Area four, five year options to extend. The Property is prominently positioned just off of IH- Over $19 Billion in gross patient revenue in San 10 between Loops 40 & 1604. The Property provides Significant Tenant Investment Antonio Medical Center. superior visibility and rapid metro transit connectivity Tenant has invested over $3 Million in tenant Significant VA Medical Presence to some of San Antonio’s most desirable retail improvements. Directly across the street from Audie Murphy VA corridors and residential neighborhoods. Tremendous Location Advantage Hospital and Brooke Army Medical Center. The Property presents an investor the opportunity Flourishing Northwest Submarket; highly desired Close Proximity to Major Employers to purchase a stabilized asset with a demonstrable central location is attractive for businesses and • South Texas Medical Center: 56,000 Employees; “long-term” commitment to the location. The rent is residents, offering exceptional amenities and central • USAA Corporate HQ: 20,000 Employees; structured so as to offer a very long-term opportunity location. • Valero Energy HQ: 1,900 Employees; for Tenant given its location and adjacency to the Dense Residential Area for Employee Retention • University of Texas San Antonio (UTSA) 29,000 South Texas Medical Center. One of the densest residential areas in San Antonio, Students, 1,400 Faculty. TX; 138,000 within 3-mile radius. 245-unit Oxford at Medical Apartments to open in March 2017.

Best Performing Submarket Some of the highest rents in San Antonio, TX; high occupancy; high historical absorption.

Baptist Health System • San Antonio, TX 4 Section Two Property Overview

Subject Property Lease Abstract

VHS San Antonio Partners, LLC, D/B/A Tenant: Baptist Health System School of Health Professions

Guarantor: VHS San Antonio Partners, LP

Square Footage: +/- 66,263 SF

Rent Commencement Date: January 5, 2005

Actual Property Lease Expiration Date: December 31, 2020

Lease Term Remaining: Four (4) years Rent Schedule

Years Annual Rent NOI: $903,164.00 2016 - 2020 $903,164

Rent Increases: 10% every 5 years including options 2021 - 2025 (Option 1) $993,480

Ownership Type: Fee Simple 2026 - 2030 (Option 2) $1,092,828

Three (3) Renewal Options, five (5) Renewal Options: years each

Lease Type: NNN

Baptist Health System • San Antonio, TX 6 Tenant Overview

The Baptist Health System School of Health • Baptist M&S Imaging Centers conveniently Professions evolved from a private cluster located throughout San Antonio of health science schools sponsored by the Baptist Health System. The School of Nursing • Pregnancy testing centers was the first school, chartered in 1903. Surgical Technology followed in 1955, Medical Imaging • Numerous affiliated MedFirst primary and Technology in 1959, and Vocational Nursing in specialty care clinics 1988.

• Baptist Home Health Services Baptist Health System includes the following services and facilities: Over the years the school has grown from a diploma to a degree granting institution. The • Five acute-care hospitals – Baptist Medical first Associate of Applied Science degrees were Center, Mission Trail Baptist Hospital, North awarded in 2009. In 2010 the school began to Central Baptist Hospital, Northeast Baptist offer Online programs and courses. In 2012 the Hospital, and St. Luke’s Baptist Hospital school was approved as a baccalaureate degree granting institution. • Baptist Emergency Hospitals in convenient locations around San Antonio The School of Health Professions offers degree completion for the RN to BSN and B.S. in • Comprehensive children’s services at North Healthcare Management, Associate degrees Central Baptist Hospital in Medical Imaging, Professional Nursing, and Surgical Technology along with diploma • Baptist Breast Centers featuring patient programs in Vocational Nursing and post navigators, genetic counseling, and leading professional certifications in Magnetic Resonance imaging services Imaging, Diagnostic Medical Sonography and Computed Tomography. • School of Health Professions

• HealthLink Fitness and Wellness Center

•HealthLink Physical Rehabilitation Centers conveniently located throughout San Antonio

• San Antonio AirLIFE air medical transport service

Actual Property

Baptist Health System • San Antonio, TX 7 Section Three Market Overview

Subject Property Location Overview

San Antonio is the second most populous city in the state of Texas, with a population of 1,409,019. It was the fastest growing of the top 10 largest cities in the United States from 2000 to 2010, and the second from 1990 to 2000.

San Antonio hosts two of the largest military San Antonio Skyline medical centers in the United States. On the civilian side of healthcare, the city is also home to a well- established community of healthcare providers recognized at both the national and global level.

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, healthcare, government civil service, financial services, oil and gas and tourism sectors. Within the past twenty years, San Antonio has become a significant San Antonio Riverwalk location for American-based call centers and has added a significant manufacturing sector centered around automobiles.

Located about 10 miles northwest of Downtown is the South Texas Medical Center, which is a conglomerate of various hospitals, clinics, and research and higher educational institutions. The city is also home to one of the largest military concentrations in the United States. The defense industry in San Antonio employs over 89,000 The Alamo and provides a $5.25 billion impact to the city’s economy.

San Antonio is home to six Fortune 500 companies: Valero Energy Corp, Tesoro Corp, USAA, Clear Channel Communications, NuStar Energy and CST Brands, Inc. H-E-B, the 14th largest private company in the United States, is also headquartered in San Antonio.

Sea World ALASA FURNITURE

WELLMED MEDICAL MANAGEMENT UIW ROSENBERG SCHOOL OF OPTOMETRY

HEALTH CAREERS HIGH SCHOOL UT MEDICINE - MEDICAL ARTS UT HEALTH SCIENCE RESEARCH CENTER CENTER: ORAL SURGERY DEPT

VA DENTAL CLINIC/OPTOMETRY WARM SPRINGS KINDRED REHAB HOSPITAL HOSPITAL ADVANCED CHRISTUS SANTA SOUTH TEXAS PHARMACY ROSA HOSPITAL RESEARCH FACILITY

WURZBACH RD (+/- 43,204 VPD) (+/-I-10 VPD) 263,159 METHODIST SPECIALTY AND TRANSPLANT ST. LUKE’S BAPTIST HOSPITAL HOSPITAL

SOUTHWEST CHILDREN’S CENTER

BABCOCK RD (+/- 43,297 VPD) FREDERICKSBURG RD (+/- 39,738 VPD) UNIVERSITY OF PHOENIX

UNIVERSITY HOSPITAL CENTENE CORPORATION - SUPERIOR HEALTH PLAN

AUDIE MURPHY VETERANS ADMIN. HOSPITAL METHODIST HOSPITAL & CHILDREN’S HOSPITAL UT SCHOOL OF MEDICINE TEXAS PERINATAL BOB ROSS CENTER - GROUP N

Baptist Health System • San Antonio, TX 10 Demographics

8400 Datapoint Dr | San Antonio, TX 78229 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.

Population

2016 Population 21,289 139,152 366,463

2021 Population 22,702 148,191 389,181

2010-2016 Annual Rate 0.99% 0.95% 0.90%

2016-2021 Annual Rate 1.29% 1.27% 1.21%

Households

2016 Total Households 10,124 63,012 149,585

2021 Total Households 10,719 67,051 158,530

2010-2016 Annual Rate 0.81% 0.91% 0.83%

2016-2021 Annual Rate 1.15% 1.25% 1.17%

2016 Average Household Income $48,166 $58,855 $62,861

2016 Median Household Income $36,436 $42,338 $44,856 Offered Exclusively by

going beyond

Albert Muller Associate Director [email protected] TX Lic. # 459937

Stan Johnson Company 10333 Richmond Ave | Suite 740 Houston, TX 77042 P: +1 832.476.3440 | F: +1 832.476.3449 stanjohnsonco.com

The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices. 1122015 Information About Brokerage Services Texas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

TYPES OF REAL ESTATE LICENSE HOLDERS: .  A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker.  A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.

A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents):  Put the interests of the client above all others, including the broker’s own interests;  Inform the client of any material information about the property or transaction received by the broker;  Answer the client’s questions and present any offer to or counteroffer from the client; and  Treat all parties to a real estate transaction honestly and fairly.

A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:

AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent.

AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyerof any material information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller’s agent.

AS AGENT FOR BOTH INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary:  Must treat all parties to the transaction impartially and fairly;  May, with the parties' written consent, appoint a different license holder associated with the broker to each party (ownerd an buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction.  Must not, unless specifically authorized in writing to do so by the party, disclose: ᴑ that the owner will accept a price less than the written asking price; ᴑ that the buyer/tenant will pay a price greater than the price submitted in a written offer; and ᴑ any confidential information or any other information that a party specifically instructs the broker in writing notto disclose, unless required to do so by law.

AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first.

TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH:  The broker’s duties and responsibilities to you, and your obligations under the representation agreement.  Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.

LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.

SJCO-Holdings, LLC 9003332 918-494-2690 Licensed Broker /Broker Firm Name or License No. Email Phone Primary Assumed Business Name James Gibson 392926 918-494-2690 Designated Broker of Firm License No. Email Phone

Licensed Supervisor of Sales Agent/ License No. Email Phone Associate

Sales Agent/Associate’s Name License No. Email Phone

Buyer/Tenant/Seller/Landlord Initials Date

Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov IABS 1-0