OFFERING MEMORANDUM

3955 SANDALWOOD LN

PUEBLO, CO | 1 LISTED BY TABLE OF CONTENTS

KYLE MATTHEWS 03 EXECUTIVE OVERVIEW @matthews.com DIRECT (310) 955-1774 MOBILE (510) 684-0574 LIC # EC.100070704 (CO) 04 FINANCIAL OVERVIEW

07 TENANT OVERVIEW

08 AREA OVERVIEW

2 | SECTION 1 EXECUTIVE OVERVIEW PROPERTY »» Medical Real Estate--Medical properties are extremely sought-after investments as they are recession and e-commerce proof

»» Ideal 1031 Exchange Property–The current lease term has 8.5 years remaining and features 2.0% increases every year, giving investors a strong hedge against inflation

»» Tenant Investment in Location—Dental support organizations rarely relocate due to high costs of moving and difficulty in retaining the same patients

LOCATION »» High-Traffic Retail Synergy—Located across from a Walmart Supercenter and strong retail corridor, providing convenient access to the site in one of the most frequented retail areas of Pueblo

»» Perfect Location for Target Market—Over 15 schools in a 2-mile radius of the site, providing quick and easy access for one of Smile Doctors’ larger patient bases

»» Ideally situated right off of State Highway 45, which runs through the entire city of Pueblo and has an average traffic count of 28,200 VPD TENANT »» Private equity investment in Smile Doctors by Linden Capital and Sheridan Capital in 2017 provides a large private equity backing with an extremely strong growth outlook

»» 55% Tenant Growth (Year Over Year)–Smile Doctors has rapidly grown from 90 locations in 2017 to over 140 locations in 13 states in 2018, making it the fastest growing DSO

»» Streamlined Expansion—Smile Doctors expands by acquiring existing orthodontic practices that are already successful and established within the community. This allows them to quickly grow their footprint across new markets and states

»» Growing Sector in Healthcare—The global orthodontic support market is expected to grow at a CAGR of 11.7% over the next 4 years alone | 3 SECTION 2 FINANCIAL TENANT SUMMARY OVERVIEW Tenant Name Simle Doctors Braces Type of Ownership Fee Simple Lease Type NN (Roof/Structure/HVAC) INVESTMENT SUMMARY Original Lease Term 10 Years Lease Commencement Date 7/20/17

3955 Sandalwood Ln Lease Expiration Date 7/19/27 »» PROPERTY ADDRESS Pueblo, CO 81005 Term Remaining 8.5 Years Increases 2.0% Annually »» OFFERING PRICE $898,741 Options One (1) Five (5) Year Option

ANNUALIZED OPERATING DATA »» CAP RATE 7.15% Year Monthly Rent Annual Rent Cap Rate Current $5,355.00 $64,260.00 7.15% »» LOT SIZE 0.35 Acres (15,297 SF) July 20, 2019 - July 19, 2020 $5,462.10 $65,545.20 7.29% July 20, 2020 - July 19, 2021 $5,571.34 $66,856.10 7.44% July 20, 2021 - July 19 2022 $5,682.77 $68,193.23 7.59% »» GLA ±3,093 SF July 20, 2022 - July 19, 2023 $5,796.42 $69,557.09 7.74% July 20, 2023 - July 19 2024 $5,912.35 $70,948.23 7.89% July 20, 2024 - July 19, 2025 $6,030.60 $72,367.20 8.05% July 20, 2025 - July 19, 2026 $6,151.21 $73,814.54 8.21% July 20, 2026 - July 19, 2027 $6,274.24 $75,290.83 8.38%

4 | PARCEL MAP

| 5 SURROUNDING TENANTS

Roncalli STEM Academy

S PUEBLO BLVD ±28,200 VPD

SUBJECT PROPERTY

6 | Roncalli STEM Academy South High School

SUBJECT PROPERTY SUBJECT PROPERTY

S PUEBLO BLVD ±28,200 VPD

| 7 SECTION 3 TENANT OVERVIEW

SMILE DOCTORS »» COMPANY NAME »» INDUSTRY »» HEADQUARTERS SMILE DOCTORS ORTHODONTICS GEORGETOWN, TX

Smile Doctors, LLC is the largest orthodontic dental support organization in the country with more than 140 affiliated practices in 13 states. Founded by Dr. Scott Law, Scotte Hudsmith, Dr. Dana Fender and Dr. Greg Goggans in 2015, the company is headquartered in Georgetown, Texas and focuses exclusively on developing and growing affiliated orthodontic practices. Smile Doctors-affiliated practices are owned and operated by licensed orthodontists and committed to providing affordable, all-inclusive orthodontic treatment to patients across the country. Smile Doctors’ patient-centric approach and team collaboration result in beautiful, confident smiles and the highest standard of patient care.

Linden Capital made an undisclosed investment in Smile Doctors in 2017. As a result of the transaction, Linden will become the majority shareholder in Smile Doctors while previous backer Sheridan Capital will have a minority stake. William Blair served as financial adviser to Smile Doctors and Houlihan Lokey did likewise for Linden. Twin Brook Capital Partners provided $325 million in financing to support Linden’s acquisition of Smile Doctors.

8 | SECTION 4 AREA OVERVIEW

PUEBLO, CO The City of Pueblo has a long and colorful history dating back to 1842 when it was called Fort Pueblo. What brought the city from a small fort in southern Colorado to a major city were the ore mines. This area once housed 4 separate towns, Pueblo, South Pueblo, Central Pueblo, and . These 4 towns together now make up the City of Pueblo.

The City of Pueblo is also known as “America’s Home of Heroes,” as was proclaimed by the United States Congress in 1993. Pueblo hosts National Medal of Honor Day and has had as many as 4 living Medal of Honor recipients living in their community.

Economically, Pueblo is booming. It is one of the largest steel-producing cities in the United States and is often referred to as the “Steel City”. Additionally, Pueblo has one of the top 5 lowest costs of living when comparing price levels of housing, utilities, transportation, and groceries.

| 9 PUEBLO COMMUNITY DEVELOPMENT

Portland Park Shelters: 1700 Block of East 19 Street – Eastside Neighborhood. Installation of one park shelter and the accompanying ADA accessible route, relocation of the irrigation system, electrical service and lighting, installation of new picnic tables.

St Anne’s Park Ball Field Rehabilitation: 2700 E. 12 Street -Eastside Neighborhood The project will undertake the rehabilitation of the ball field to include the removal of substandard structures to provide improved playing conditions to area residents and youth baseball teams. Improvements to be undertaken are the construction of the backstop, removal, and replacement of broken chain-link fencing, construction of a new announcer’s booth and new infield mix.

Installation of Streetlights: 2500 & 2600 Blk. E. 9 St & 2600 Blk. E. 10 St Installation of three cobra head streetlights on the above-listed streets. At present, there are no streetlights on these blocks. Improvements will provide for safer pedestrian and vehicular transit. DEMOGRAPHICS

Population 1 - Mile 3 - Mile 5 - Mile

2023 Projection 16,485 56,571 81,754

2018 Estimate 15,871 54,463 78,722

Growth 2018-2023 3.87% 3.87% 3.85% Households 1 - Mile 3 - Mile 5 - Mile

2023 Projection 6,669 23,518 33,498

2018 Estimate 6,423 22,652 32,248

Growth 2018-2023 3.83% 3.82% 3.88% Households 1 - Mile 3 - Mile 5 - Mile

2018 Est. Average $59,677 $55,594 $51,229 Household Income 10 | POINTS OF INTEREST

lake pueblo

The Colorado State Fair is an annual event Lake Pueblo has been rated a “fishing hot The Pueblo Zoo is an AZA (Association of located in Pueblo. The fair features a variety spot” as it provides 60 miles of shoreline, Zoos and Aquariums) accredited facility that of events including concerts, rodeos, 4,600 surface acres of water, and 10,000 covers twenty-five acres in the southwest parades and carnival rides and games. This acres of land. The area offers a full-service quadrant of Pueblo City Park. It is home event takes place at the end of August and marina and a variety of campsites so to more than 500 animals representing runs through the beginning of September. guests can stay awhile. Along with the top- over 125 different species from around the ranked fishing, you can find guests sailing, world. The Zoo is a place where animals are waterskiing and much more. exhibited in natural settings.

whitewater park pueblo mountain park steelworks museum

Located in Downtown Pueblo, the Colorado is known for its beautiful scenery The Steelworks Center of the West provides Whitewater Park is approximately ½ mile and guests can immerse themselves in continuing education to the public through long and contains eight drops. While it is nature at Pueblo Mountain Park. Several the preservation of historic archives, artifacts called a “park”, this kayak course is a real hiking trails are found on the 611-acre park and buildings of the river. whether it be a guided hike or discovering Company (CF&I), and related activities your own path. Additionally, Horseshoe leading to the industrialization of the entire Lodge offers a “nature inspired” bed and Western United States. breakfast so visitors can stay multiple days.

| 11 CONFIDENTIALITY AGREEMENT & DISCLAIMER This Offering Memorandum contains select information pertaining to the business and affairs of Smile Doctors located at 3955 Sandalwood Ln Pueblo, CO 81005 (“Property”). It has been prepared by Matthews Real Estate Investment Services. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Matthews Real Estate Investment Services. The material is based in part upon information supplied by the Seller and in part upon financial information obtained from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum for the Property, you agree:

1 . The Offering Memorandum and its contents are confidential; 2. You will hold it and treat it in the strictest of confidence; and 3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Matthews Real Estate Investment Services expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of the Property or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Matthews Real Estate Investment Services or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

12 | LISTED BY

KYLE MATTHEWS [email protected] DIRECT (310) 955-1774 MOBILE (510) 684-0574 LIC # EC.100070704 (CO)