First Choice Emergency Room

SUBJECT PROPERTY

EXCLUSIVE OFFERING | $8,711,000 – 6.75% CAP FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

214.915.8890 property. 6,391+ SF building on 1.06+ acres. Relocation from high performing store to new freestanding location. First Choice Emergency Room is based in Lewisville, TX and is the leading freestanding emergency room system. Parent company, Adeptus Health, had BOB MOORHEAD tenant. [email protected] $243 million in patient service revenue (fiscal year ended December 2014) and $109 million in patient service revenue (2015 Q3). 15-year, Corporate Absolute NNN lease, with 14 years remaining and 2.0% annual rent increases every year during initial term & options. JOE CAPUTO lease structure. [email protected] location. First Choice Emergency Room is located at the intersection of Marina Bay Dr (15,529 Cars / Day) and S Shore Blvd (11,201 Cars / Day) just south of RUSSELL SMITH the NASA Johnson Space Center. Marina Bay Dr is an east-west thoroughfare which serves the northern portion of League City and connects the immediate trade [email protected] area to I-45, one of Houston’s main transportation corridors. Numerous national credit tenants have taken advantage of this convenience and accessibility. The subject property is within close proximity to McDonald’s, Burger King, Starbucks, CVS, Walgreens, Randall’s, GNC, Subway, Anytime Fitness, and smoothie King. Other tenants near the subject property include Kroger, Taco Bell, Advanced Auto Parts, Firestone Complete Auto Care, and Clear Creek High School. Table of contents | Disclaimer FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

PAGE 1: COVER Disclaimer Trivanta (“Agent”) has been engaged as an agent for the sale of the property located at PAGE 2: TABLE OF CONTENTS | DISCLAIMER 3016 Marina Bay Dr, League City, TX by the owner of the Property (“Seller”). The Property is being offered for sale in an “as-is, where-is” condition and Seller and Agent make no PAGE 3: INVESTMENT | TENANT | LEASE OVERVIEW representations or warranties as to the accuracy of the information contained in this Offering Memorandum. The enclosed materials include highly confidential information and are being furnished solely for the purpose of review by prospective purchasers of the PAGE 4-5: AERIAL PHOTOS interest described herein. The enclosed materials are being provided solely to facilitate the prospective investor’s own due diligence for which it shall be fully and solely responsible. The material contained herein is based on information and sources deemed to be reliable, PAGE 6: SITE PLAN but no representation or warranty, express or implied, is being made by Agent or Seller or any of their respective representatives, affiliates, officers, employees, shareholders, PAGE 7: LOCATION OVERVIEW partners and directors, as to the accuracy or completeness of the information contained herein. Summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of RD PAGE 8: 3 QUARTER 2015 HIGHLIGHTS & GUIDANCE some of the principal provisions contained therein. Neither the Agent nor the Seller shall have any liability whatsoever for the accuracy or completeness of the information contained PAGE 9: MARKET OUTLOOK herein or any other written or oral communication or information transmitted or made available or any action taken or decision made by the recipient with respect to the Property. Interested parties are to make their own investigations, projections and conclusions without PAGE 10: PRESS GANEY AWARD reliance upon the material contained herein. Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and PAGE 11-12: LOCATION MAPS for any reason. Seller and Agent each expressly reserves the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time, with or without notice. PAGE 13: DEMOGRAPHICS This offering is made subject to omissions, correction of errors, change of price or other terms, prior sale or withdrawal from the market without notice. Agent is not authorized to make any representations or agreements on behalf of Seller. Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing additional investigation and/or making an offer to purchase the Property unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered, and approved by Seller and any conditions to Seller’s obligations hereunder have been satisfied or waived. By taking possession of and reviewing the information contained herein, the recipient agrees that (a) the enclosed materials and their contents are of a highly confidential nature and will be held and treated in the strictest confidence and shall be returned to Agent or Seller promptly upon request; and (b) the recipient shall not contact employees or tenants of the Property directly or indirectly regarding any aspect of the enclosed materials or the Property without the prior written approval of the Seller or Agent; and (c) no portion of the enclosed materials may be copied or otherwise reproduced without the prior written authorization of Seller and Agent.

2 Investment overview FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

Lease overview PRICE: $8,711,000 Initial Lease Term: 15-Years, Plus 5, 5-Year Options to Renew

CAP RATE: 6.75% Rent Commencement: October 2014

CAP RATE (AVG TERM REMAIN.): 7.70% Lease Expiration: October 2029 Lease Type: Absolute NNN NET OPERATING INCOME: $587,956 Rent Increases: 2.0% Annual Increases BUILDING AREA: 6,391+ Square Feet Annual Rent (Year 1): $576,427 Annual Rent (Year 11): $702,662 LAND AREA: 1.06+ Acres Annual Rent (Year 2): $587,956 Annual Rent (Year 12): $716,715 YEAR RENOVATED: 2014 Annual Rent (Year 3): $599,715 Annual Rent (Year 13): $731,049

LANDLORD RESPONSIBILITY: None Annual Rent (Year 4): $611,709 Annual Rent (Year 14): $745,670

OWNERSHIP: Fee Simple Interest Annual Rent (Year 5): $623,944 Annual Rent (Year 15): $760,584

OCCUPANCY: 100% Annual Rent (Year 6): $636,422 Option 1 (Year 16-20): FMR

Annual Rent (Year 7): $649,151 Option 2 (Year 21-25): Opt 1 * 1.02

Annual Rent (Year 8): $662,134 Option 3 (Year 26-30): Opt 2 * 1.02

Annual Rent (Year 9): $675,377 Option 4 (Year 31-35): Opt 3 * 1.02 Tenant overview Annual Rent (Year 10): $688,884 Option 5 (Year 36-40): Opt 4 * 1.02 Guarantor: Corporate

FIRST CHOICE EMERGENCY ROOM | www.fcer.com First Choice Emergency Room is based in Lewisville, TX and is the leading freestanding emergency room system; it is both the largest and the oldest. First Choice Emergency Room is revolutionizing the delivery of emergency medical services for adult and pediatric emergencies, both major and minor. First Choice Emergency Room facilities are innovative, freestanding, and fully equipped emergency rooms with state of the art diagnostic technology (CT Scanners, Ultrasound, Digital X-ray) and on-site labs. All First Choice Emergency Room locations are exclusively staffed with board-certified emergency physicians and emergency trained registered nurses. With 55 locations in Houston, Dallas/Fort Worth, Austin, and Colorado Springs, patients receive high-quality care and have an alternative to today’s overburdened hospital system. Inc. Magazine ranked First Choice as one of the fastest growing businesses in the U.S. in 2010, 2011, and 2012. The company was named as one of the 2013 Best Companies to Work for in Texas. The company’s current growth plans are backed by Sterling Partners, which has invested $59 million in the business. First Choice generated $78.2 million in revenue in 2012, up from $37 million in 2008. First Choice was established in 2002 by Dr. Jack Novak, and Thomas S. Hall is the company’s current CEO. First Choice plans to build more Freestanding Emergency Rooms, as stated in 2012. The company has plans to invest over $100 million over the next few years by developing many more facilities. New facilities, within 15 months after opening, generally have historically generated between approximately $4.5 million to $5.5 million in annual net revenue. In the second quarter of 2014, Medical Properties Trust, Inc. (MPT) executed a new binding agreement for an additional $150 million commitment to develop multiple facilities with First Choice’s parent company, Adeptus Health, aggregating $250 million in development funding to Adeptus. Adeptus Health, had $243 million in patient service revenue (fiscal year ended December 2014) and $109 million in patient service revenue for the three month period ended September 30, 2015.

3 AERIAL PHOTO FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

NASA Johnson Space Center

Former Location

Clear Creek High School

4 AERIAL PHOTO FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

Corporate Offices

Former Location

5 Site plan FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

6 Location overview FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

IMMEDIATE TRADE AREA HOUSTON-SUGAR LAND-BAYTOWN METROPOLITAN AREA First Choice Emergency Room is located at the intersection of Marina Bay Dr The Houston-Sugar Land-Baytown Metropolitan Statistical Area (MSA), (15,529 Cars / Day) and S Shore Blvd (11,201 Cars / Day) just south of the colloquially known as Greater Houston, is the 6th largest in the United States NASA Johnson Space Center. Marina Bay Dr is an east-west thoroughfare with a population of 5,946,800. From 2000 to 2030, the metropolitan area is which serves the northern portion of League City and connects the immediate projected by Woods & Poole Economics to rank 5th in the nation in population trade area to I-45, one of Houston’s main transportation corridors. The property growth—adding 2.66 million people. In 2006, Greater Houston ranked 1st in is a relocation from high performing store to new freestanding location. Texas and 3rd in the U.S. within the category of "Best Places for Business and Careers" by Forbes. The Greater Houston Gross Metropolitan Product (GMP) Numerous national credit tenants have taken advantage of this convenience in 2005 was $308.7 billion, up 5.4 percent from 2004 in constant dollars. By and accessibility. The subject property is within close proximity to McDonald’s, 2010, the GMP rose to $384 billion, 5th in the nation. Only 28 nations other Burger King, Starbucks, CVS, Walgreens, Randall’s, GNC, Subway, Anytime than the United States have a GDP exceeding the Greater Houston GMP. Fitness, and smoothie King. Other tenants near the subject property include Mining, which in Houston is almost entirely oil and gas exploration and Kroger, Taco Bell, Advanced Auto Parts, Firestone Complete Auto Care, and production, accounts for 11 percent of Greater Houston's GMP. Clear Creek High School. Houston is 2nd to New York City in Fortune 500 headquarters. Galveston Bay LEAGUE CITY, TX and the Buffalo Bayou together form one of the most important shipping hubs League City is a city in the U.S. state of Texas, within Houston–Sugar Land- in the world, and the Port of Houston, the Port of Texas City, and the Port of Baytown metropolitan area. The city is partially in the counties of Galveston Galveston are all major seaports located in Greater Houston. The area is one and Harris. As of the 2010 census, League City's population was 83,560. of the leading centers of the energy industry, particularly petroleum processing, League City is centrally located along I-45 between Houston and Galveston. and many companies have large operations in this region. The MSA comprises Interstate 45, which serves as the main transportation corridor through the largest petrochemical manufacturing area in the world, including for Houston’s metropolitan region, traverses the center of the City providing synthetic rubber, insecticides, and fertilizers. Much of metro area's success as residents access to I-10 and US 59. There are two beltways (Loop 610 and a petrochemical complex is enabled by the Houston Ship Channel. The area is Beltway 8) around Houston that intersect with Interstate 45, giving access to all also the world's leading center for building oilfield equipment, and is a major major cities in Texas. center of biomedical research, aeronautics, and high-technology. League City’s housing market continues to experience growth as location and Houston is home to the Texas Medical Center—the largest medical center in quality of life make it a highly desirable place to call home for many of the the world—several universities (including Rice University, Texas Southern NASA engineers and scientists including doctors and others that work in the University, and The University of Houston), and two of the largest systems of region. Housing sales are on the rise, while the inventory for single family higher learning in the United States (The Houston and Lone Star Community homes is shrinking, resulting in increased new home construction. The Clear College systems). The University of Houston’s annual impact on the Houston- Creek Independent School District Education Village is a uniquely designed area's economy alone equates to that of a major corporation: $1.1 billion in new 144 acre campus that brings together a comprehensive high school, funds attracted annually to the Houston area, $3.13 billion in total economic intermediate school, and elementary school on a single site. This PK-12 benefit, and 24,000 local jobs generated. CNN/Money and Money Magazine campus includes shared and multi-use facilities that have been created with a have recognized 5 cities in the Greater Houston area the past 3-years as part community of learners in mind. of its 100 Best Places to Live in the United States.

7 THIRD QUARTER 2015 HIGHLIGHTS & GUIDANCE – PRESS RELEASE FIRST CHOICE EMERGENCY ROOM

4747 Little Road, Arlington, TX

Third Quarter 2015 Highlights

. Systemwide net patient services revenue was $109.0 million versus $57.6 million in prior year, an increase of 89%;

. Net operating revenue was $88.2 million versus $57.6 million in prior year, an increase of 53%;

. Adjusted EBITDA was $18.6 million versus $7.0 million in prior year, an increase of 166%;

. Adjusted earnings per share was $0.31 and GAAP earnings per share was $0.05;

. Net income attributable to Adeptus Health Inc. was $0.7 million;

. Cash flow provided by operating activities was $4.0 million versus a usage of $14.1 million in prior year; and

. The Company opened six freestanding facilities during the third quarter 2015.

2015 Guidance

. Based on our strong performance in the third quarter of 2015 and continued full year growth plans including 24 freestanding facilities and two new hospitals, we are raising our annual guidance.

. We expect systemwide net patient services revenue, which includes revenue from our unconsolidated joint ventures, of $405.0 million to $410.0 million for the full year 2015.

. We expect Adjusted EBITDA of $73.0 million to $75.0 million and Adjusted earnings per share of $1.20 to $1.25 for the full year 2015.

Zupsic, Jackie. "Adeptus Health Reports Third Quarter 2015 Results And Raises Full Year Guidance." -- LEWISVILLE, Texas, Oct. 22, 2015 /PRNewswire/ --. Adeptus Health, 22 Oct. 2015. Web. 30 Oct. 2015.

8 THIRD QUARTER 2015 HIGHLIGHTS – PRESS RELEASE FIRST CHOICE EMERGENCY ROOM

4747 Little Road, Arlington, TX

Adeptus Healthcare System Partners

"By creating new independent facilities… and partnering with leading local healthcare systems, such as Dignity Health, UCHealth, and Ochsner Health System, we are part of the solution that is transforming the delivery of emergency medical care in the U.S. …"

Market Outlook

We are maintaining the growth of our freestanding emergency room network at an expected rate of opening 24 new sites per year, including both owned and joint venture facilities. Our second hospital, located in Carrollton, Texas, a Dallas-Ft Worth suburb, remains on schedule to open in the fourth quarter.

ADPT's growth is addressing the shortage of quality emergency medical care in the U.S. As the most recentAmerican College of Emergency Physicians (ACEP) survey highlights, America's emergency care system remains overstretched as emergency visits continue to rise. Respondents noted that this rise is combined in part with an increase in the acuity of patients' injuries and/or illnesses. Again, this underscores the growing need for additional access points to high quality, 24/7 emergency care. Our facilities offer just that with convenient neighborhood locations.

9 Press Ganey Guaradian of Excellence Award – PRESS RELEASE FIRST CHOICE EMERGENCY ROOM

4747 Little Road, Arlington, TX

REPRESENTATIVE PHOTO November 4, 2014 (Lewisville, Texas) – First Choice Emergency Room, an Adeptus Health company (NYSE:ADPT),is proud to announce it has been named a 2014 Guardian of Excellence Award winner by Press Ganey Associates, Inc. The Guardian of Excellence Award recognizes top-performing facilities that consistently achieved the 95th percentile of performance in Patient Experience nationwide. “We are honored to be receiving the Guardian of Excellence award again in 2014,” said Thomas S. Hall, President and CEO of Adeptus Health. “This award represents our team’s commitment to delivering the highest quality of emergency medical care to our patients each and every day.” First Choice Emergency Room is revolutionizing the delivery of emergency medical services for adult and pediatric emergencies by offering patients convenient, neighborhood access to emergency medical care. First Choice Emergency Room facilities are innovative, freestanding, and fully equipped emergency rooms with state of the art diagnostic technology (CT Scanners, Ultrasound, and Digital X-ray) and on-site labs. Furthermore, each facility is staffed with board-certified physicians and emergency trained registered nurses. The Press Ganey Guardian of Excellence Award is a nationally-recognized symbol of achievement in health care. Presented annually, the award honors clients who consistently sustained performance in the top 5% of all Press Ganey clients for each reporting period during the course of one year. "We are proud to partner with First Choice Emergency Room,” said Patrick T. Ryan, CEO of Press Ganey. “The award is a testament to the organization’s commitment to reduce patient suffering and deliver more patient-centered care. By achieving and sustaining this level of excellence, First Choice Emergency Room is benefiting patients and helping advance the quality of health care.” Press Ganey is the nation’s leading health care performance improvement company and partners with more than 11,000 health care facilities, including more than half of all U.S. hospitals, to measure and improve the patient experience. SOURCE: First Choice Emergency Room | Copyright © 2014 PR Newsire. All rights reserved. 10 Location map FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

11 Location map FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

12 Demographics FIRST CHOICE EMERGENCY ROOM

3016 Marina Bay Dr, League City, TX (HOUSTON)

3016 Marina Bay Dr 3016 Marina Bay Dr 1 mi radius 3 mi radius 5 mi radius 1 mi radius 3 mi radius 5 mi radius League City, TX 77573 League City, TX 77573

2014 Estimated Population 8,597 63,695 147,147 2014 Est. Labor Population Age 16 Years or Over 6,990 50,741 115,072 2019 Projected Population 9,390 69,170 159,409 2014 Est. Civilian Employed 69.4% 69.0% 67.7% 2010 Census Population 7,976 59,375 137,437 2014 Est. Civilian Unemployed 2.6% 2.9% 2.8% 2000 Census Population 6,477 47,872 111,758 2014 Est. in Armed Forces 0.2% 0.3% 0.2% Projected Annual Growth 2014 to 2019 1.8% 1.7% 1.7% 2014 Est. not in Labor Force 27.7% 27.8% 29.2%

POPULATION

Historical Annual Growth 2000 to 2014 2.3% 2.4% 2.3% LABORFORCE 2014 Labor Force Males 49.9% 49.5% 49.5% 2014 Labor Force Females 50.1% 50.5% 50.5% 2014 Estimated Households 3,786 27,248 59,469 2019 Projected Households 4,134 29,587 64,477 2010 Occupation: Population Age 16 Years or Over 4,380 32,232 71,616 2010 Census Households 3,483 25,227 55,159 2010 Mgmt, Business, & Financial Operations 19.4% 17.9% 16.8% 2000 Census Households 2,719 20,415 44,822 2010 Professional, Related 29.4% 30.7% 28.5% Projected Annual Growth 2014 to 2019 1.8% 1.7% 1.7% 2010 Service 15.2% 13.1% 14.5%

HOUSEHOLDS Historical Annual Growth 2000 to 2014 2.8% 2.4% 2.3% 2010 Sales, Office 26.0% 23.1% 22.9% 2010 Farming, Fishing, Forestry 0.1% 0.1% 0.2% 2014 Est. Population Under 10 Years 8.9% 12.0% 12.9% 2010 Construction, Extraction, Maintenance 3.3% 7.0% 7.9%

OCCUPATION 2014 Est. Population 10 to 19 Years 12.6% 12.8% 13.5% 2010 Production, Transport, Material Moving 6.7% 8.1% 9.1% 2014 Est. Population 20 to 29 Years 11.5% 13.8% 14.0% 2010 White Collar Workers 74.8% 71.7% 68.2% 2014 Est. Population 30 to 44 Years 18.3% 21.1% 20.8% 2010 Blue Collar Workers 25.2% 28.3% 31.8%

AGE 2014 Est. Population 45 to 59 Years 26.7% 22.8% 21.7% 2014 Est. Population 60 to 74 Years 16.4% 13.2% 12.8% 2010 Drive to Work Alone 85.8% 83.0% 81.6% 2014 Est. Population 75 Years or Over 5.6% 4.2% 4.3% 2010 Drive to Work in Carpool 5.8% 8.2% 9.0% 2014 Est. Median Age 43.2 38.0 36.7 2010 Travel to Work by Public Transportation 0.6% 1.0% 1.1% 2010 Drive to Work on Motorcycle 0.1% 0.3% 0.3% 2014 Est. Male Population 49.7% 49.6% 49.7% 2010 Walk or Bicycle to Work 0.6% 1.3% 2.0% 2014 Est. Female Population 50.3% 50.4% 50.3% WORK TO 2010 Other Means 3.2% 2.0% 2.1%

2014 Est. Never Married 26.9% 30.5% 31.0% TRANSPORTATION 2010 Work at Home 4.0% 4.2% 3.7% 2014 Est. Now Married 53.7% 47.9% 48.5%

&GENDER 2014 Est. Separated or Divorced 14.6% 18.1% 16.5% 2010 Travel to Work in 14 Minutes or Less 21.6% 27.6% 29.4%

MARITAL STATUS MARITAL 2014 Est. Widowed 4.8% 3.6% 3.9% 2010 Travel to Work in 15 to 29 Minutes 35.5% 32.0% 32.3% 2010 Travel to Work in 30 to 59 Minutes 31.9% 31.1% 29.6% 2014 Est. HH Income $200,000 or More 13.3% 8.9% 8.4% 2010 Travel to Work in 60 Minutes or More 11.0% 9.3% 8.7%

2014 Est. HH Income $150,000 to $199,999 14.4% 9.9% 8.6% TIME TRAVEL 2010 Average Travel Time to Work 24.4 22.4 21.6 2014 Est. HH Income $100,000 to $149,999 19.0% 18.6% 17.4% 2014 Est. HH Income $75,000 to $99,999 13.3% 13.0% 13.2% 2014 Est. Total Household Expenditure $295 M $1.86 B $3.94 B 2014 Est. HH Income $50,000 to $74,999 12.7% 18.4% 17.7% 2014 Est. Apparel $14.3 M $89.8 M $191 M 2014 Est. HH Income $35,000 to $49,999 16.4% 12.3% 12.6% 2014 Est. Contributions, Gifts $22.5 M $133 M $280 M 2014 Est. HH Income $25,000 to $34,999 3.0% 6.6% 8.2% 2014 Est. Education, Reading $9.56 M $57.1 M $120 M

INCOME 2014 Est. HH Income $15,000 to $24,999 3.4% 6.6% 7.1% 2014 Est. Entertainment $16.8 M $105 M $223 M 2014 Est. HH Income Under $15,000 4.5% 5.7% 6.7% 2014 Est. Food, Beverages, Tobacco $44.5 M $286 M $609 M 2014 Est. Average Household Income $113,589 $95,250 $92,218 2014 Est. Furnishings, Equipment $13.7 M $84.5 M $179 M 2014 Est. Median Household Income $94,596 $80,355 $77,268 2014 Est. Health Care, Insurance $20.1 M $128 M $272 M 2014 Est. Per Capita Income $50,112 $40,780 $37,317 2014 Est. Household Operations, Shelter, Utilities $88.7 M $557 M $1.18 B 2014 Est. Miscellaneous Expenses $4.71 M $30.2 M $64.0 M

CONSUMEREXPENDITURE 2014 Est. Total Businesses 397 2,926 6,725 2014 Est. Personal Care $4.21 M $26.7 M $56.6 M 2014 Est. Total Employees 3,931 32,905 79,605 2014 Est. Transportation $56.4 M $362 M $769 M 13