12501 JUDSON

TEX AS HEALTHCARE INVESTMENT PROPERTIES CBRE, Inc. operates within a global family of companies with many subsidiaries and related entities (each an “Affiliate”) engaging in a broad range of commercial real estate businesses including, but not limited to, brokerage services, property and facilities management, valuation, investment fund management and development. At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow Company, may have or represent clients who have competing interests in the same transaction. For example, Affiliates or their clients may have or express an interest in the property described in this Memorandum (the “Property”), and may be the successful bidder for the Property. Your receipt of this Memorandum constitutes your acknowledgement of that possibility and your agreement that neither CBRE, Inc. nor any Affiliate has an obligation to disclose to you such Affiliates’ interest or involvement in the sale or purchase of the Property. In all instances, however, CBRE, Inc. and its Affiliates will act in the best interest of their respective client(s), at arms’ length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and its Affiliates will conduct their respective businesses in a manner consistent with the law and all fiduciary duties owed to their respective client(s).

Your receipt of this Memorandum constitutes your acknowledgement that (i) it is a confidential Memorandum solely for your limited use and benefit in determining whether you desire to express further interest in the acquisition of the Property, (ii) you will hold it in the strictest confidence, (iii) you will not disclose it or its contents to any third party without the prior written authorization of the owner of the Property (“Owner”) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any manner detrimental to the Owner or CBRE, Inc. If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return it to CBRE, Inc.

This Memorandum contains select information pertaining to the Property and the Owner, and does not purport to be all-inclusive or contain all or part of the information which prospective investors may require to evaluate a purchase of the Property. The information contained in this Memorandum has been obtained from sources believed to be reliable, but has not been verified for accuracy, completeness, or fitness for any particular purpose. All information is presented “as is” without representation or warranty of any kind. Such information includes estimates based on forward-looking assumptions relating to the general economy, market conditions, competition and other factors which are subject to uncertainty and may not represent the current or future performance of the Property. All references to acreages, square footages, and other measurements are approximations. This Memorandum describes certain documents, including leases and other materials, in summary form. These summaries may not be complete nor accurate descriptions of the full agreements referenced. Additional information and an opportunity to inspect the Property may be made available to qualified prospective purchasers. You are advised to independently verify the accuracy and completeness of all summaries and information contained herein, to consult with independent legal and financial advisors, and carefully investigate the economics of this transaction and Property’s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS MEMORANDUM IS SOLELY AT YOUR OWN RISK. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions at any time with or without notice to you. All offers, counteroffers, and negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have any legal commitment or obligation except as set forth in a fully executed, definitive purchase and sale agreement delivered by the Owner.

© 2018 CBRE, Inc. All Rights Reserved. 2 TABLE OF CONTENTS

01. Executive Summary

02. Property Description

CONTACT 03. Location Overview SCOTT HERBOLD First Vice President CBRE Investment Properties - Healthcare +1 210 507 1120 [email protected] 04. Market Overview

05. Investment Overview

06. Process & Offer Instructions

3 01. EXECUTIVE SUMMARY

4 EXECUTIVE SUMMARY

OFFERING PRICE Best Offer

BUILDING SIZE 10,136 SF

YEAR BUILT 1985

OCCUPANCY 50%

THE OFFERING INVESTMENT HIGHLIGHTS CBRE’s Investment Properties Group is pleased to exclusively present the Judson Office Building in , Texas for purchase. The Judson Office Building is a 10,136 Strategically located near the Northeast Methodist Hospital campus, the Judson square-foot freestanding medical and professional center strategically located across Office Building presents an excellent opportunity for investors to acquire a from HCA’s Northeast Methodist Hospital. The property provides ample parking with three well-parked office or medical office property below replacement cost and create parking lots that include 18 covered parking spaces for tenants and visitors. additional value through lease-up of the remaining vacancy. > Excellent User Investment Opportunity The Judson Office Building is strategically located in San Antonio’s northeast submarket just off Interstate 35. In addition to Northeast Methodist Hospital, other economic drivers to the area include Morgan’s Wonderland, Northeast Independent School District’s > Strategic Location Near Northeast Methodist athletic complex, Toyota Field Soccer League Stadium (home of San Antonio FC of the United Hospital Campus Soccer League), STAR Soccer Complex, The Forum at Olympia Parkway regional power center, Joint Base San Antonio – Randolph, Northeast Lakeview College and the future site of IKEA. > Value-Add Lease-Up Opportunity Well-Below Replacement Cost The northeast submarket is characterized by a growing number of middle-class neighborhoods served by I-35 and Loop 1604 (212,000 and 121,000 daily vehicles in 2016). The rapid > Excellent Accessibility with Ingress/Egress to commercial and residential growth along northeast San Antonio’s I-35 corridor all the way to I-35 via Toepperwein and Judson Roads Austin reflects its desirability as the gateway to San Antonio. Population within three miles is 108,025 with an average household income of $73,673. The daytime population of 88,517 indicates the heavy residential nature of the immediate area, boding well for service tenants > Ample Parking of 6.4 per 1000 Square Feet such as healthcare and retail. includes 18 Covered Spaces 5 02. PROPERTY DESCRIPTION

6 PROPERTY DESCRIPTION

BUILDING SPECIFICATIONS Judson Office Building is an elevated two-story office building BUILDING NAME Judson Medical Building built into a hill to provide covered parking at street level beneath ADDRESS 12501 Judson Road, San Antonio, TX the Property and two additional surface parking lots at the same TENANCY % 50% elevation as the first floor of the building. Each floor contains BUILDING SIZE 10,136 SF 5,068 square feet and an elevator connects the street level parking YEAR BUILT 1985 with the two tenant floors. LAND AREA (ACRES) 0.8752 Acres PARCEL NUMBER 05049-206-0010 ZONING OCL 65 Total Surface Spaces (6.4:1000 SF); 18 Covered Parking PARKING Spaces OWNERSHIP Fee Simple Interest FOUNDATION/STRUCTURE Concerete Piers EXTERIOR WALLS Stucco HEATING & COOLING (HVAC) Package Units for HVAC ELEVATORS & STAIRS One Passenger Elevator Cab and One Stairwell FLOORING Tile, Carpet and Faux Wood in Tenant Spaces CEILINGS 2-Foot by 4-Foot Suspended Acoustic Tiles

FIRE SAFETY/SPRINKLER Overhead Sprinklers

7 INVESTMENT HIGHLIGHTS

Excellent User Investment Opportunity – With two tenants occupying 50% of the 10,136 square feet, an investor can occupy the property immediately.

Strategic Location Near Northeast Methodist Hospital Campus – The Property sits across the street from Northeast Methodist Hospital only one block off Interstate 35 with 212,000 vehicles daily. Healthcare, retail, office and residential properties have been infilling around the hospital over the past few years.

Value-Add Lease-Up Opportunity Well-Below Replacement Cost – With few blocks of vacant office space in Interstate 35/Loop 1604 area, an investor may acquire the property well-below replacement cost and significantly enhance value by leasing current vacancies.

Excellent Accessibility – The Property benefits from excellent access to I-35, with both on-ramp and off-ramp connections via both Judson and Toepperwein Roads

Ample Parking of 6.4 per 1000 Square Feet includes 18 Covered Spaces – The 65 parking spaces provide a parking ratio of 6.4 spaces per 1000 square feet, with additional parking along Woodsrim Street. There are 18 covered parking spaces, all with covered access to the Property.

8 SITE PLAN

9 FLOOR PLANS

10 FLOOR PLANS

11 FLOOR PLANS

12 03. LOCATION OVERVIEW

13 LOCATION LOCATION OVERVIEW OVERVIEW Northeast San Antonio Submarket This portion of San Antonio’s northeast submarket is marked by stable middle-class neighborhoods, significant commercial and residential growth and serves as San Antonio’s gateway for those driving south on I-35 from Austin and Dallas. The traffic count on this section of Interstate 35 is 212,000 vehicles daily (2016). There are 108,025 people living within three miles of the Property with an average household income of $73,673. The three-mile daytime population of 88,517 is indicative of the heavy concentration of stay-at-home spouses and retirees, boding well for healthcare, retail and service businesses.

Northeast Methodist Hospital opened in 1985 between Interstate 35 and the Judson Office Building, along the frontage road at the Toepperwein Road intersection. The hospital has undergone extensive renovations to upgrade and expand its facilities and services, including the purchase of an adjacent car dealership for future growth. The hospital is an accredited chest pain center, is certified by the Joint Commission as a stroke center, and offers cardiac and orthopedic surgeries, inpatient rehabilitation, cancer treatment and intensive care. Annually, the 179-bed hospital receives over 50,000 emergency room visits, 9000 inpatients and performs 6000 cardiac procedures, making it one of the fastest growing heart service programs in Texas. Northeast Methodist is owned and operated by a joint venture between San Antonio-based Methodist Healthcare Ministries and Nashville-based HCA. HCA has nine hospitals in San Antonio and is one of the country’s largest for-profit hospital systems with 174 hospitals and 119 surgical centers. HCA is also the second largest private employer in San Antonio with over 10,000 employees.

IKEA, the Swedish-founded furniture and home accessory company now based in The Netherlands, has recently closed on a 31-acre site in the city of Live Oak on Interstate 35 just west of the Judson Office Building. Site work and construction of the 290,000-square foot retail store is underway with the hiring of 250 employees and store opening planned for early 2019.

14 RETAIL MAP

15 04. MARKET OVERVIEW

16 MARKET OVERVIEW

San Antonio is celebrating its 300th anniversary in 2018 > 7th largest city in the US with 2.4 million people in the San Antonio-New Braunfels MSA > Home to 3 major military bases > Ranked 1st in Texas and 3rd in US for job growth (3.0%) in 2017 (US Bureau of Labor Statistics) DIVERSE ECONOMY San Antonio continues to earn its reputation as a very stable and predictable market, with a solid and diverse economic foundation built on healthcare & biosciences, financial services, technology, UNEMPLOYMENT RATE (2017) construction, tourism, military and government sectors. 5

Fortune 500 Companies Headquartered in San Antonio 4 4.1 Valero (#37) Petroleum Refiner and Marketing 3.9 USAA (#102) Financial Services 3 Andeavor (fka Tesoro) (#117) Petroleum Refiner 3.0 CST Brands Inc. (#306) Fuel and Convenience Store Retailer 2 iHeartMedia Inc. (#426) Mass Media Other Corporate Headquarters 1

Acelity Medical Devices 0 Bill Miller BBQ Quick Serve Restaurant US TX SA Banking H-E-B Grocery Harland Clarke Marketing Harte Hanks Digital Marketing NuStar Energy Petroleum Pipeline & Terminal Operator JOB GROWTH PERCENTAGE (2017) Rackspace Managed Cloud Computing 4 Security Service Federal Credit Union Financial Services SWBC Financial Services 3 Quick Serve Restaurant 3.0 Whataburger Quick Serve Restaurant 2.7 2 EDUCATION 1.4 Eight accredited universities call San Antonio home, to include Trinity University, the University of Texas at San Antonio 1 (UTSA), St. Mary’s University, University of the Incarnate Word (UIW) and Texas A&M University – San Antonio. The Alamo Area Community College district also has four campuses. 0 17 US TX SA MARKET OVERVIEW

AREA HOSPITALS MAJOR EMPLOYERS Methodist Hospital 685 Joint Base SA - Lackland Military 37,097 Christus Santa Rosa Hospital 668 Joint Base SA - Military 32,000 USAA Financial Services 15,000 Baptist Medical Center 627 H-E-B Grocery 14,588 Methodist Specialty & Transplant 379 Northside ISD Education 12,751 Southwest General Hospital 327 Joint Base SA - Randolph Military 11,068 Nix Healthcare System 297 North East ISD Education 10,522 St. Luke’s Baptist Hospital 295 City of San Antonio Government 9,145 Northeast Baptist Hospital 291 Methodist Healthcare System Healthcare 7,747 Christus Santa Rosa Children’s Hospital 244 San Antonio ISD Education 7,000 Methodist Children’s Hospital 190 Baptist Health System Healthcare 6,498 Wells Fargo Financial Services 5,153 Christus Santa Rosa Medical Center 178 ATT Telecommunications 4,200 Christus Santa Rosa - Westover 150 Frost Bank Financial 3,982 Southeast Baptist Hospital 133 Bill Miller BBQ Restaurant 3,540

18 © 2018 CBRE, Inc. All rights reserved. This information has been obtained from sources believed reliable, but has not been verified for accuracy or completeness. You should conduct a careful, independent investigation of the property and verify all information. Any reliance on this information is solely at your own risk. HOSPITAL MAP

19 05. INVESTMENT OVERVIEW

20 LEASE COMPARABLES

Property Year Rent Rate/ Percentage Building SF Notes Address Built SF Occupied Type

Toepperwein Medical Plaza Parking Ratio 4.0/1,000 12602 Topperwein Rd 50,179 1986 $23.50 MG 95% Medical Next to Northeast Methodist Hospital. On-site radiology San Antonio, TX and lab services.

Village at Live Oak Parking Ratio 4.1/1,000 12315 Judson Rd. 24,394 1985 $15.00 NNN 78% Medical/Retail Mixed use medical and retail tenants San Antonio, TX

Northeast Methodist Pavilion 12413 Judson Rd. 16,008 1985 $20.50 FS 73% Medical Parking Ratio 4.4/1,000 San Antonio, TX

Live Oak Medical Complex 11515 Toepperwein Rd 15,704 2007 $20.00 NNN 78% Medical Parking Ratio 2.9/1,000 San Antonio, TX

Northeast Methodist Plaza 12709 Toepperwein Rd 48,924 1985 $23.50 FS 96% Medical Parking Ratio 3.7/1,000 San Antonio, TX

21 INVESTMENT OVERVIEW

RENT ROLL COMM EXP EXPENSE SUITE TENANT RSF RENT/YR RATE/RSF DATE DATE STOP BASE YR 101 2,027 Mar 2013 FEB 2021 $48,648 $24.00 Dr. Lindsey Schlepp, D.D.S 2018 102 Vacant 2,375

201 Vacant 2643 BASE YR 202 3,091 Jan 2006 OCT 2020 $74,184 $24.00 Dr. Huyen, Nguyen, M.D., P. 2017 TOTAL 10,136 $122,832 $24.00

22 INVESTMENT OVERVIEW

OPERATING EXPENSES RECENT CAPITAL IMPROVEMENTS 2017 2016 2015 New 3-Ton Condensing Unit and Air Handler $5,400 2017

Utilities $11,276 $11,243 $10,647 New 2-Ton Condensing Unit and Air Handler $5,300 2017

Insurance $660 $679 $809 Pylon and Exterior Signage $8,000 2017

Janitorial $21,798 $21,674 $20,100 Gutters, Facia, Stucco, Waterproofing, Paint $134,000 2016 Replace Water Main from Backflow Preventer Property Tax $22,944 $22,314 $21,653 $7,000 2015 to the Building Maintenance $25,779 $26,234 $23,574 Repair/Replace Roof Drain Lines $23,000 2015

Security $1,411 $1,239 $852 Garage Improvements, Plumbing, Stucco $25,000 2015 $83,872 $83,383 $77,635 TOTAL $8.27 PSF $8.23 PSF $7.66 PSF Exterior Door Improvements $30,000 2015

*Excludes Property Management

23 06. OFFERING INSTRUCTIONS

24 OFFERING INSTRUCTIONS

Submit offers electronically to Scott Herbold at [email protected] and include the following:

Terms • Purchase Price • Earnest Money Deposit • Inspection Period • Closing Period

Investor Information • Description of Purchaser’s equity sources • Details on Purchaser’s debt (if any) • Description of your due diligence process • Description of any contingencies, caveats, and approvals of which the Ownership should be aware in evaluating your offer

Condition of Sale • The Property is being offered in its “as is” condition. Purchaser shall confirm the condition and suitability of the Property through their own due diligence, without any reliance upon information provided herein

Interested parties are requested to direct all communication regarding the property to:

SCOTT HERBOLD CBRE Investment Properties - Texas Healthcare 200 Concord Plaza, Suite 800 San Antonio, TX 78216 [email protected] T 210.507.1120 F 210.340.1827 25