CLASS a MEDICAL OFFICE HOSPITAL-ADJACENT Healthcare Capital Markets PHILADELPHIA, PA
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CLASS A MEDICAL OFFICE HOSPITAL-ADJACENT Healthcare Capital Markets PHILADELPHIA, PA EXECUTIVE SUMMARY EXECUTIVE SUMMARY The Plaza Towers Einstein Health Network 144 Units (Einstein ONE) Age-Restricted Housing Saligman House DePaul Healthcare Indepedant & Harmony Place Assisted Living DePaul Healthcare Assisted Living Angela Jane Pavilion Subacute & Rehab Services DEER MEADOWS RETIREMENT COMMUNITY The Tabas House • Independent Living • Short-Term Rehab 323 Units Longwood Manor Apartments • Personal Care/ • Long-Term Care Age-Restricted Housing 352 Units Assisted Living • Skilled Nursing • Memory Care • Specialty Programs Park Circle Apartments SOLLY AVE 121 Units 1 U.S. ROUTE - 1 (ROOSEVELT BLVD) 231 BEDS RHAWN ST Holliday Fenoglio Fowler, L.P. (“HFF”), is pleased to exclusively offer 8001 and 8040 Roosevelt Boulevard, Philadelphia, PA (individually the “Property”, and collectively the “Properties” or the “Boulevard Portfolio”), which consists of two strategically located, just-off-campus, medical office buildings, totaling 86,639 SF. 8001 ROOSEVELT BLVD. | 8040 ROOSEVELT BLVD. | PHILADELPHIA, PA 3 THE OPPORTUNITY 8001 and 8040 Roosevelt Boulevard (US-1) are 94.7% leased in aggregate, and anchored by the highly PROPERTY SUMMARY esteemed Thomas Jefferson University Hospital (“TJUH”, or “The Hospital”, Moody’s A1), which through its Right of First Offer on entirety of 8001 Roosevelt Boulevard (the “ROFO”), has expanded its footprint by 76% since taking initial occupancy in 2014, electing to lease space at the Property as it becomes available. LOCATION The Properties have ample upside through new ownership facilitating the growth of The Hospital, as it 8001 & 8040 Roosevelt Blvd. continues its expansion, also resulting in rental rate growth as suites convert from non-hospital space. Philadelphia, PA 19152 In addition to the ROFO, TJUH has also pre-negotiated a lease for Tristate Imaging’s suite (13.9% of 8001 GLA) when it expires in 2020. TOTAL BUILDINGS TJUH offers the following services at the Property: urgent care, heart institute (and recent additional 2 expansion space), vascular surgery, oral surgery and family practice. Non-hospital specialties offered at 8001 Roosevelt include imaging, podiatry, dental, hemotology oncology, periodontics & prosthetics, and dermatology. GROSS LEASABLE AREA 86,639 SF (aggregate) Located in Philadelphia (home to one of the largest concentrations of healthcare institutions, teaching hospitals, R&D facilities, and life sciences hubs in the country), The Boulevard Portfolio is located in the very dense, urban, “Far Northeast” Philadelphia submarket, along U.S Route-1 (43,000 VPD), just off of Trinity Health System’s 231-bed Nazareth Hospital campus. 297,000 people reside in the 3-mile radius, OCCUPANCY which is characterized by a highly-insured, aging population (21% above the age of 65). 94.7% (aggregate) PROPERTY BREAKDOWN MAJOR TENANTS Thomas Jefferson University Hospital (Moody’s A1) LAND AREA 1.73 Acres 8001 ROOSEVELT* 8040 ROOSEVELT YEAR BUILT / COMPLETE RENOVATION DESCRIPTION 8001 Roosevelt % OF 8040 Roosevelt % OF TOTAL • 8001 Roosevelt Blvd.: 1973 / 2013-2016 TOTAL TOTAL • Square Footage 58,879 68.0% 27,760 32.0% 86,639 8040 Roosevelt Blvd.: 1965 Available Square Footage 1,785 2,800 4,585 Overall Occupancy 97.0% 89.9% 94.7% Clinical Occupancy 82% 0% 56.0% EXISTING DEBT Hospital ROFO % 100% 0% 68.0% Average Remaining Lease Term 6.34 5.25 6.00 Assumable “market” loan (see abstract on pg. 40) Net Operating Income ($) 984,556 75.0% 327,420 25.0% 1,311,976 *8001 Roosevelt may also be referred to as the Smylie Times Building or 2607 Rhawn (tax address). EXECUTIVE Summary < < < 4 8001 ROOSEVELT BLVD. | 8040 ROOSEVELT BLVD. | PHILADELPHIA, PA INVESTMENT HIGHLIGHTS BEST-IN-CLASS TENANCY WITH THOMAS JEFFERSON UNIVERSITY HOSPITAL, WHICH HAS RAPIDLY EXPANDED THROUGH THEIR RIGHT OF FIRST OFFER PROVISION Thomas Jefferson University Thomas Jefferson University Hospital (Moody’s A1) Hospital has a Right of First is nationally recognized and renowned, and as one Offer on any available space of the largest employers in the City of Philadelphia, generated 2015 annual patient revenue of $5.27 in 8001 Roosevelt, and since billion. taking initial occupancy in the TJUH has grown rapidly through both organic Property in 2014, has increased expansion and recent mergers with the surrounding their footprint by 76%. hospitals of Abington Health and Aria Health Systems. TJUH took initial occupancy at the Property in 2014, and through its ROFO provision, has expanded by 76%, and in addition has pre-negotiated a lease to take Tristate Imaging’s premises when Tristate’s lease expires (which alone represents 13.9% of 8001 Roosevelt; 9.4% of the Portfolio GLA). In total, there is over 14,000 SF (23.8%) that will expire without options over the analysis period, and along with the current available space, this will afford TJUH the opportunity to grow into over 85% of 8001 Roosevelt Blvd., and account for over 60% of the gross income from the Portfolio. > > > EXECUTIVE Summary 8001 ROOSEVELT BLVD. | 8040 ROOSEVELT BLVD. | PHILADELPHIA, PA 5 THOMAS JEFFERSON UNIVERSITY HOSPITALS 2015 CLINICAL METRICS Avg. Length of Stay 5.3 days HOSPITAL SUMMARY Bed Utilization Rate 72.0% Total Acute Days 224,552 Thomas Jefferson University Hospitals and Thomas Jefferson University Hospitals have 951 Medicare Advantage Days 31,545 Thomas Jefferson University are partners in licensed acute care beds, with major programs Adjusted Patient Days 339,039 providing excellent clinical and compassionate in a wide range of clinical specialties. Services # of Discharges 42,134 care for patients in the Philadelphia region, are provided at five primary locations—Thomas ER Visits 122,831 educating the health professionals of tomorrow Jefferson University Hospital and Jefferson # of Inpatient Surgeries 25,124 in a variety of disciplines and discovering new Hospital for Neuroscience, both in Center City # of Births 2,081 knowledge that will define the future of clinical Philadelphia; Jefferson’s Methodist Hospital care. Established in 1825, Thomas Jefferson and Jefferson at the Navy Yard, both in South 2015 FINANCIAL METRICS University Hospitals and Thomas Jefferson Philadelphia; and Jefferson at Voorhees in South Total Patient Revenue $5,274,880,187 University share a 13-acre campus in Center City Jersey. Net Patient Revenue $1,456,271,966 Philadelphia. Net Medicare Revenue $308,450,941 Net Medicaid Revenue $128,224,171 Jefferson has been named on U.S. News & MEDICARE Total Assets $1,714,117,806 21% World Report’s best hospital rankings, earning Total Liabilities $936,358,983 2nd overall hospital in the Philadelphia Net Assets $777,758,823 metropolitan area and the 4th best hospital in Days Cash on Hand 70.8 days PAYOR MEDICAID Pennsylvania. Additionally, only 3% of hospitals EBITDA $38,410,888 PRIVATE/ MIX 9% in the country are ranked in one of 16 specialties; SELF PAY 70% Jefferson standing out nationally as among 2015 PAYOR MIX the best in a remarkable 9 specialty areas: Medicare $308,450,941 Medicaid $128,224,171 • 8th in Orthopedics COMPETING HEALTHCARE SYSTEMS Private/Self Pay $1,019,596,854 • 30th in Ear, Nose, & Throat MARKET SHARE • 32nd in Gastroenterology & GI Surgery MERCY HEALTH COMPETING HEALTHCARE SYSTEMS MARKET SHARE • 33rd in Neurology & Neurosurgery SYSTEM 10% Aria Health System (Merged W/ TJUH) 1,978,000,000 • 47th in Gynecology Abington Health System (Merged W/ TJUH) 3,304,000,000 • 27th in Cancer EINSTEIN TJUH 5,274,000,000 • 31st in Urology HEALTH NETWORK MARKET New TJUH Total 10,556,000,000 63.96% • 33rd in Neurology & Neurosurgery 26% SHARE Mercy Health System 1,579,700,000 9.57% • 42nd in Nephrology (5-MILE) THOMAS JEFFERSON Einstein 4,369,000,000 26.47% UNIVERSITY HOSPITALS 16,504,700,000 64% EXECUTIVE Summary < < < 6 8001 ROOSEVELT BLVD. | 8040 ROOSEVELT BLVD. | PHILADELPHIA, PA STRATEGICALLY LOCATED IN A HEALTHCARE 276 DENSE SUBMARKET NEXT TO A MAJOR NESHAMINY MALL HOSPITAL & SENIOR LIVING FACILITIES PARX ABINGTON PHILMONT AVE CASINO Philadelphia has a leading “Eds and Meds” economy HEALTH 611 ROTHMAN 63 that employs over 243,000 people across the city ROOSEVELT BLVDINSTITUTE 232 HOLY REDEEMER accounting for over 36% of the workforce, with greater HOSPITAL Philadelphia having one of the largest concentrations BUSTLETON AVE PHILADELPHIA of health resources in the nation with 120 hospitals, 1 MILLS MALL EINSTEIN 200 pharmaceutical and biotech firms, and 135 medical 611 CENTER ONE manufacturers. Northeast Philadelphia Airport The Northeastern Philadelphia submarket is a true ROOSEVELT BLVD reflection of the economic impact of the healthcare HARMONY PLACE GRANT AVE ARIA DEERMEADOWS JEANES ASSISTED LIVING HEALTH HOME HEALTH sector within Philadelphia, where a significant FOX CHASE HOSPITAL DePaul Healthcare CANCER CENTER ASSISTED LIVING concentration of healthcare campuses can be found RHAWN ST NAZARETH including Abington Health and Aria Health, which both 95 73 HOSPITAL merged with Thomas Jefferson University Hospital in 13 COTTMAN AVE 2015 & 2016, respectively. CENTER CITY HOSPITALS THOMAS JEFFERSON UNIVERSITY HOSPITAL HAHNEMANN UNIVERSITY HOSPITAL 1 PENNSYLVANIA HOSPITAL In addition, the Properties are located next to the 231- bed Nazareth Hospital and two senior living facilities – Dear Meadows and Harmony place, which collectively INPATIENT HOSPITAL BED COUNT ABINGTON HEALTH supply over 525 senior residents, 206 nursing beds, Abington Hospital 665 MERGED WITH and 196 senior living apartments in walking distance of Aria