Offering Memorandum Price

MEDICAL OFFICE BUILDING PORTFOLIO OFFERING ±67,470 SF ON REGIONAL HOSPITAL CAMPUS ELIZABETH CITY, NORTH CAROLINA, 27909-3353 MEMORANDUM Sentara Albemarle PRICE: $4,400,000 Medical Center

FOR MORE INFORMATION, PLEASE CONTACT: Christopher M. Zarpas Christopher Devine 757.640.5437 (d) 757.237.7500 (m) 757.640.2410 (direct) | 757.434.3176 (mobile) [email protected] [email protected]

This offering has been prepared solely for informational purposes. It is designed to assist a potential investor in determining whether it wishes to proceed with an in-depth investigation of the subject property. While the information contained herein is from sources deemed reliable, it has not been independently verified by S.L. Nusbaum Realty Co.

This document is provided subject to errors, omissions and changes in the information and is subject to modification or withdrawal. The contents herein are confidential and are not to be reproduced without the expressed written consent of S.L. Nusbaum Realty Co.

The Seller reserves the right to withdraw the Property being marketed at any time without notice, to reject all offers, and to accept any offer without regard to the relative price and terms of any other offer.

Prospective Buyers shall be responsible for their costs and expenses of investigating the Property and all other expenses, professional or otherwise, incurred by them.

1134 N ROAD ST. & 1142 N ROAD ST., ELIZABETH CITY, NC 2

SL Nusbaum Realty Co. is pleased to present an opportunity to acquire a high-yield medical office asset in Elizabeth City, North Carolina comprised of nine medical office buildings comprising of ± 67,470 SF on 9 acres, contiguous to the 30 acre campus of Sentara Albemarle Medical Center, the largest regional healthcare provider serving Northeastern North Carolina. Sentara, a 182 licensed bed, full service hospital with a medical staff of more than 100 physicians, representing nearly 30 specialties, and support staff of almost 1,000 employees.

INVESTMENT HIGHLIGHTS • High Yield investment opportunity with an opportunity to add value with continued lease-up • Located in the primary medical trade area of Elizabeth City • 100% medical tenancies • Staggered maturities • 70% long term tenants with new tenants demonstrating ongoing demand • Expansion potential – 1 acre parcel fronting North Road Street and a .3 acre parcel for development or sale • Significant capital improvements over last two years

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No warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question. SITE PLAN G F E D H I J 101-112 Medical Drive K C L A 101 Medical - Coastal Rehab B O N M

B 102 Medical – Port Health Services A

C 105 Medical - Elizabeth City Treatment Center

D 107 Medical – Community Family Health

E 110 Medical – Village Suite 1 United Westlabs Village Suite 2 Vacant Village Suite 3 Vacant Village Suite 4 Vacant Village Suite 5 Integrated Family Svc Village Suite 7 Medical Home Care Village Suite 8 Vacant Village Suite 9 Vacant 1134 N. Road Street Village Suite 10 Vacant Building 4 – Tarheel Internal Medicine H Building 8 - Vacant L

111 A – Atlantic Pulmonary Assoc. Building 7- Dr. Bald & Associates M Building 3 – Tidewater Skin Care F 111 B – Towne Center Health I J Building 6 – Diabetes, Thyroid & N Building 2 – Albemarle ENT G 112 Medical – Sentara OB/GYN Endocrinologist K Building 5 - Vacant O Building 9 – Eastern Carolina Cardio

1134 N ROAD ST. & 1142 N ROAD ST., ELIZABETH CITY, NC 4

Address 1134 N ROAD ST. & 1142 N ROAD ST., Building A (101 Medical) Building H (Building 8) ELIZABETH CITY, NC Square Feet (RBA) 4,435 SF Square Feet (RBA) 2,558 SF County Pasquotank NC PIN 891412974194 Building B (102 Medical) Building I (Building 7) 891408975683 Square Feet (RBA) 5,300 SF Square Feet (RBA) 3,686 SF Zoning O & I (Office & Institutional) Year Built 1970 - 2003 Building C (105 Medical) Building J (Building 6) Square Feet (RBA) 3,600 SF Square Feet (RBA) 2,700 SF Total Square Footage +/- 67,470 Number of Buildings 9 Building D (107 Medical) Building K (Building 5) Number of suites 23 Square Feet (RBA) 2,400 SF Square Feet (RBA) 3,280 SF Site Area 9.46 Parking Ratio 468 - 6.7/1000 Building E (110 Medical) Building L (Building 4) Construction Wood Framed Masonry/Vinyl (Villages 1 thru10) Square Feet (RBA)2,390 SF Foundation Concrete Slab Square Feet (RBA)13,796SF Doors and Windows Fixed and Single Hung Building F (111 Medical Building M (Building 3) A&B) Roof Peaked Shingled Square Feet (RBA)2,674 SF Square Feet (RBA) 5,564SF Electrical Single Phase/200Amps Three Phase/400Amps Building N (Building 2) Building G (112 Medical) Square Feet (RBA) 3,627 SF Water, Sewer, Electric City of Elizabeth City Square Feet (RBA) 5,649 SF Communications Cox Communications/Verizon Building O (Building 9) Square Feet (RBA) 5,811 SF 5 MAJOR HEALTHCARE PROVIDERS

Sentara Albemarle Medical Center

Sentara Healthcare, based in Norfolk, VA, is a 125 year old, diverse not-for-profit family of 12 hospitals offering an array of integrated services employing medical and support staff of 27,000. In March 2014, Sentara Healthcare signed a lease of the Albemarle Medical Center with a term of up to 100 years. Sentara paid off $63 million in hospital debt and committed to a minimum of $40 million in new facilities and equipment. Sentara Albemarle is a full service facility with 182 licensed beds. It has 1,000 employees and more than 100 physicians, representing nearly 30 specialties. Since 2014, Sentara Albemarle has:

• Made $56.7 million in capital investments in the hospital, including $18 million for an electronic medical records conversion designed to standardize and facilitate the sharing • Increased its daily census of patients every year, with the census of patient information across the Sentara system. now above 60, and capacity for a daily census of up to 100. • Invested almost $21.5 million in physician practices, recruiting • Improved market share and become a referral center for smaller, 17 new physicians and 29 total providers “critical access” hospitals around the region.

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1134 N ROAD ST. & 1142 N ROAD ST., ELIZABETH CITY, NC 8

9 TENANT PROFILES

ATLANTIC PULMONARY ASSOCIATES Atlantic Pulmonary Associates is a Sentara Healthcare specialty care provider practicing, Pulmonary, Sleep and Internal Medicine

DR. BALD AND ASSOCIATES Dr. Bald and Associates oral and maxillofacial surgery specialist serving patients at two locations in Elizabeth City and Outer Banks areas of North Carolina for more than 25 years. Procedures include tooth extractions, wisdom tooth extractions, jaw pain, injuries to the mouth or tongue, and other related oral/dental procedures.

COASTAL REHAB Coastal Rehabilitation, Inc. is an independently owned private physical, sports and occupational therapy rehabilitation practice with six locations that has been operating in Eastern North Carolina for over 30 years.

COMMUNITY FAMILY PRACTICE Family physicians in Elizabeth City, NC, delivering primary care services for all members of the family – from seniors to kids

DIABETES, THYROID & ENDOCRINOLOGY CENTER Dr. Suvinay Paranjape, MD specializes in Diabetes and Endocrinology, Diabetes & Metabolism. Dr. Paranjape is affiliated with Sentara Albemarle Medical Center and has been practicing for over 18 years

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EASTERN CAROLINA CARDIOVASCULAR Eastern Carolina Cardiovascular is a specialist in heart disorders, including diabetes, thyroid disorders, high cholesterol, and obesity, with 3 locations in North Eastern North Carolina.

INTEGRATED FAMILY SERVICES, PLLC Integrated Family Services, PLLC offers a complete array of mental health services for families at nine locations in Eastern North Carolina

MEDI HOME CARE Medi Home Care is the local retailer of Medical Services Of America Inc, providing medical supplies and equipment which are considered as Medicare chargeable items at over 200 locations in the US.

PORT HEALTH Port Health operates 23 mental health treatment centers in Eastern North Carolina.

SENTARA ENT SPECIALISTS Sentara ENT Specialists offers a full range of treatments for conditions affecting the ear, nose and throat.

1134 N ROAD ST. & 1142 N ROAD ST., ELIZABETH CITY, NC 11

SENTARA OBSTETRICS & GYNECOLOGY SPECIALISTS Sentara Obstetrics & Gynecology Specialists is a division of Albemarle Physician Services – Sentara Inc offering the full spectrum of obstetrical and gynecological services

SOUTHEASTERN TREATMENT CENTER – ELIZABETH CITY Substance abuse treatment center

TARHEEL INTERNAL MEDICINE Tarheel Internal Medicine is an urgent care practice specializing in Emergency Medicine and Internal Medicine with 2 physicians.

TIDEWATER SKIN CARE Tidewater Skin Care is a dermatology practice offering a full range of both cosmetic and medical dermatological treatments at five locations in North Carolina and Virginia. Patients are seen for common conditions such as acne, eczema, dermatitis, psoriasis, and other common skin infections, as well as for more complex disorders, including skin cancer. Cosmetic and spa treatments include Facials, Dermabrasion, Botox, Botox, Chemical Peels, CoolSculpting, PDL Laser and Micro-Needling,

TOWNE CENTER HEALTH, PLLC Towne Center Health is a primary care practice serving over 600 patients

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No warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by the property owner(s). As applicable, we make no representation as to the condition of the property (or properties) in question. ACTUAL PROFIT & LOSS STATEMENT-2018 Rental Income $658,385.54 Personnel Expenses Salaries $10,900.00 FICA Expense $833.85 State Unemployment $109.00 Federal Unemployment $65.40 Total Personnel Expenses $11,908.25

Admin/General Expenses Utilities & Maintenance $64,728.40 Building Maintenance & Repairs $66,942.02 Office Supplies $147.31 Bank Fees $408.00 Entertainment – 50% $104.78 Meals – 50% $118.21 Legal & Accounting $7,465.00 Other Fees $6,470.00 Business Insurance $34,944.58 Business Property Tax $73,500.00 Taxes & Licenses $200.00 Amortization Expense $1,006.56 Bad Check Expense $979.81 Total Admin/General Expenses $257,014.67

Total Operating Expenses $268,922.92 Operating Profit (Loss) $389,462.62 Net Income (Loss) $389,462.62

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Building SF Tenant Original Lease Date Lease Exp Current Monthly Rent Annual Rent PSF Options Annual Rent Escalations Utilities Prorata tax increase + increase equal to CPI. At Landlord's 101 Medical - A 4,435 Coastal Rehabilitation 4/1/2016 3/31/2021 $5,435.00 $65,220.00 $14.71 (2) 5-year Options discretion. Prorata 102 Medical -B 5,300 Port Health Services 2/1/2017 1/31/2022 $6,405.00 $76,860.00 $14.50 (1) 5-year Options 10% Increase at Renewal Direct 105 Medical - C 3,600 Elizabeth City Treatment Center 5/1/2017 5/31/2022 $4,200.00 $50,400.00 $14.00 (2) 5 year options 10% Increase at Renewal Direct 107 Medical -D 2,400 Community Family Health 7/1/1994 MTM $2,250.00 $27,000.00 $11.25 None Prorata tax increase Prorata Village 1 -E 1,092 United Westlabs 7/23/2018 7/22/2019 $850.00 $10,200.00 $9.34 (3) 1-year Options None Direct Village 2&3 -E 2,400 VACANT Village 4 -E 1,222 VACANT Village 5 -E 1,200 Integrated Family Services 9/1/2016 8/31/2019 $2,000.00 $24,000.00 $20.00 None None Direct

Village 7 -E 2,500 Medical Services of America 1/1/2019 12/31/2021 $2,083.33 $24,999.96 $10.00 (2) 1-year options 3% incease at 1st renewal Direct Village 8 -E 1,820 VACANT Village 9 -E 1,222 VACANT Village 10 -E 2,340 VACANT Prorata tax increase + increase equal to CPI. At Landlord's 111 Medical A -F 2,782 Atlantic Pulmonary Associates 4/1/2016 3/31/2022 $3,133.75 $37,605.00 $13.52 (2) 5-year Options discretion. Prorata 111 Medical B -F 2,782 Towne Center Health 11/1/2018 10/31/2021 $2,666.08 $31,992.96 $11.50 Renewed for 3 years None Prorata Prorata tax increase + increase equal to CPI. At Landlord's 112 Medical - G 5,649 Sentara OB/GYN 3/15/2015 YTY $5,448.08 $65,376.96 $11.57 Expired 3/2019 discretion. Prorata Building 8 -H 2,558 VACANT Building 7 -I 3,686 Dr. Bald and Associates 9/1/2017 8/31/2022 $4,300.33 $51,603.96 $14.00 (1) 5-year 10% Increase at Renewal Direct Building 6 -J 2,700 Diabetes, Thyroid & Endocrinologist 5/1/2018 4/30/2025 $2,000.00 $24,000.00 $8.89 None None Direct Building 5 -K 3,280 VACANT Prorata tax increase + increase (3) 5 year options -- 2 equal to CPI . At Landlord's Building 4 -L 2,390 Tarheel Internal Medicine 5/17/2013 5/16/2023 $2,475.00 $29,700.00 $12.43 remain discretion. Prorata Prorata tax increase + increase equal to CPI. At Landlord's Building 3 -M 2,674 Tidewater Skin Care 11/14/2011 11/13/2022 $2,452.00 $29,424.00 $11.00 No remaining options discretion. Prorata Prorata tax increase + increase equal to CPI. At Landlord's Building 2 -N 3,627 Albemarle ENT 11/1/2011 10/31/2020 $3,551.42 $42,617.04 $11.75 No remaining options discretion. Prorata Prorata tax increase + increase equal to CPI. At Landlord's Building 9 -O 5,811 Eastern Carolina Cardiovascular 4/1/2016 3/31/2021 $6,261.35 $75,136.20 $12.93 (2) 5-year Options discretion. Prorata PARKING 15 Chesapeake Parking Spaces 5/1/2018 4/30/2019 $1,500.00 $18,000.00 None None TOTAL 67,470 $57,011.34 $684,136.08 HAMPTON ROADS MSA Hampton Roads is the name of both a body of water in Virginia and the surrounding metropolitan region in Southeastern Virginia and Northeastern North Carolina, United States. Comprising the Virginia Beach–Norfolk– Newport News, VA–NC metropolitan area and an extended Combined Statistical Area that includes the Elizabeth City, NC Micropolitan Statistical Area and Kill Devil Hills, NC Micropolitan Statistical Area. Nearly 19% of all workers in the Elizabeth City Micropolitan Area and nearly 23% of all male workers commute to jobs in Virginia. Hampton Roads is known for its large military presence, ice-free harbor, shipyards, coal piers, and miles of waterfront property and beaches, all of which contribute to the diversity and stability of the region's economy. ELIZABETH CITY MSA The Elizabeth City Micropolitan Statistical Area, an area consisting of three counties in the Inner Banks region of eastern North Carolina, anchored by the area of Elizabeth City. It is part of a bigger Virginia Beach-Norfolk, VA-NC MSA. Elizabeth City is home to the largest Coast Guard base on the east Coast, with over 2000 military, civilian and contact personnel, and approximately 500 dependents and 700 military retirees in the area. Other major employers include Pasquotank County (1500), Elizabeth City State University (750), DRS Technologies, Inc., (500) and College Of The Albemarle (350). Residents enjoy a high quality of life with a cost of living that is 13.40% lower than the U.S. average. Elizabeth City has twelve acres OF public parks and is only 45 minutes from the Outer Banks of North Carolina, rated the #1 beach resort in the U.S. for families by U.S. News and World Report in 2018. Pasquotank County, in which Elizabeth City resides, has more physicians per resident - 377 - than Mecklenburg and Wake Counties, home counties to Charlotte and Raleigh. 15 ELIZABETH CITY MSA DEMOGRAPHICS

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