Ati Physical Therapy 724 E

OFFERING MEMORANDUM

Subject Property Render Photo ATI PHYSICAL THERAPY 724 E. Rollins Road Round Lake Beach,Illinois 60073 NON-ENDORSEMENT AND DISCLAIMER NOTICE

Disclaimer THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Mil- lichap Real Estate Investment Services, Inc. © 2019 Marcus & Millichap. All rights reserved.

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Property Name: ATI PHYSICAL THERAPY Location: Round Lake Beach, Illinois Act ID: ZAB0370401

SPECIAL COVID-19 NOTICE All potential buyers are strongly advised to take advantage of their opportunities and obligations to conduct thorough due diligence and seek expert opinions as they may deem necessary, especially given the unpredictable changes resulting from the continuing COVID-19 pandemic. Marcus & Millichap has not been retained to perform, and cannot conduct, due diligence on behalf of any prospective purchaser. Marcus & Millichap’s principal expertise is in marketing investment properties and acting as intermedi- aries between buyers and sellers. Marcus & Millichap and its investment professionals cannot and will not act as lawyers, accountants, contractors, or engineers. All potential buyers are admonished and advised to engage other professionals on legal issues, tax, regulatory, financial, and accounting matters, and for questions involving the property’s physical condition or financial outlook. Projections and pro forma financial statements are not guarantees and, given the potential volatility created by COVID-19, all potential buyers should be comfortable with and rely solely on their own projections, analyses, and decision-making. A Progressive Vision With exceptional, patient-centered care, trusted expertise and remarkable outcomes, our goal is to exceed customers' expectations-every day, in every clinic. ATI is a nationally-recognized rehabilitation provider, specializing in research-based physical therapy, workers’ compensation rehab, employer worksite solutions, sports medicine, home health, and a variety of specialty therapies. Source:www.atipit.com

Named Best Physical Therapy Practice in the Nation Our Patients Love Us! Close to Home We Treat the Pros Dedicated to Research Accept Most Insurances Complimentary Injury Screenings Helping Children with Physical Impairments Property Analysis section 1 OFFERING PRICE CAP RATE $1,701,125 6.40%

Price $1,701,125 Cap Rate 6.40% Initial Cash-on-Cash Return 7.32% Price/SF $484.38 Lease Type NN Gross Square Feet 3,512 Year Built 2020 Occupancy 100% NOI $108,872 ATI Physical Therapy is an outpatient orthopedic private practice that focuses on providing high-quality rehabilitation services. ATI distinguishes itself in the rehabilitation industry by taking a comprehensive, whole body approach with emphasis on hands-on, one- to-one care. ATI Physical Therapy was named the “Best Physical Therapy Practice” in the nation by Advance Magazine for performing exceptionally strong in all areas of assessment including patient care and growth, employee training and retention, services, community presence, facilities, and company expansion.

Founded in 1996, ATI Physical Therapy began with one clinic in Willowbrook, Illinois. Today, ATI is the largest physical therapy company under one brand name in the United States. ATI has close to 900 clinic locations. ATI offers patient-centered care and evidence-based services in physical therapy, aquatic therapy, hand therapy, sports medicine, work conditioning/ hardening, industrial health services, and women’s health. Source:www.atipt.com

ATI PHYSICAL THERAPY

Website www.atipt.com Founded 1996

Number of Locations 900

Corporate Headquarters Bolingbrook, Illinois About ATI Leading the industry, ATI has built a differentiated platform in therapy that is focused on our patients.

A Progressive Vision With exceptional, patient-centered care, trusted expertise and remarkable outcomes, our goal is to exceed customers' expectations—every day, in every clinic. ATI is a nationally-recognized rehabilitation provider, specializing in research-based physical therapy, workers’ compensation rehab, employer worksite solutions, sports medicine, home health, and a variety of specialty therapies.

The ATI Difference “It’s always a good day at ATI.” That’s what our patients tell us. So we’re committed to being the bright spot in your day.

Source:www.atipt.com ATI Physical Therapy Opens 10 New Clinics, in 6 States in December, Closing Out Another High-Growth Year

Bolingbrook, Ill., December 11, 2019

ATI Physical Therapy (ATI), one of the nation’s largest providers of physical therapy services, is proud to announce a tremendous year of growth with 69 total clinic openings throughout the country, including 10 new clinics opening this month alone. This figure, along with significant performance data from the rest of 2019, shows notable progress for the company, as measured by key metrics of new clinic openings and same-store growth.

Throughout October and November of 2019, 14 clinics opened across the country, including seven new clinic locations over the course of 10 days in Texas and South Carolina, two states which ATI has seen an increased need for physical therapy services, along with Michigan, Arizona and points in between. ATI attributes its growth and continued progress to results-driven, patient-centered care, along with delivering a trusted experience that patients expect and can rely upon.

“For me, opening new clinic locations is exciting. It’s an opportunity to bring needed physical therapy services to more people to help improve their health and quality of life. These openings reflect the proven, measurable results and value that physical therapy provides throughout the country,” said Labeed Diab, Chief Executive Officer of ATI. “I’m proud to lead an organization that contributes to consistent, high standards of care and helps patients understand the benefits of physical therapy. While these recent accomplishments are a result of ATI’s collective hard work and clinical excellence over many years, we continue to find ways to improve our organization every day for the benefit of our patients and team members.” “A sign of a healthy organization is its ability to grow,” said Nate Bard, Chief Growth Officer. “ATI is on a great track for continued growth and is headed towards leading the industry in changing how consumers think about and utilize physical therapy services.”

ATI is a privately held, nationally recognized healthcare company, specializing in outpatient rehabilitation and adjacent healthcare services. With a focus on delivering a remarkable experience to every patient, every day, ATI has close to 900 locations from coast to coast. ATI was named “Best Physical Therapy Practice in the Nation” by ADVANCE magazine and was one of the first physical therapy companies in the country to achieve URAC Core Accreditation, a mark of distinction that recognizes its commitment to quality healthcare. Based in Bolingbrook, Illinois, ATI gives back to communities across the country through the ATI Foundation, a non-profit established by ATI, which has provided more than $5 million in resources and funding to children with physical impairments. For more information on ATI Physical Therapy, and a complete list of clinic locations, services and the ATI Foundation, please visit ATIpt.com. Source:www.atipt.com Advent International to acquire majority stake in ATI Physical Therapy Investment to strengthen ATI’s leadership in existing regional markets and accelerate its expansion in new markets across theUnited States BOSTON, MA and BOLINGBROOK, IL, March 29, 2016 – Advent International (“Advent”), one of the largest and most experienced global private equity investors, today announced that it has agreed to acquire a majority ownership interest in ATI Physical Therapy (“ATI”), a leading outpatient physical therapy provider in the United States, from KRG Capital Partners. ATI’s current management team, led by Dylan Bates, will retain a significant minority stake in the company and continue to lead ATI. Financial terms were not disclosed. The transaction, which is subject to regulatory approval and other customary closing conditions, is expected to be completed in the second quarter of 2016.

“We are pleased to welcome Advent as our new investment partner,” said Dylan Bates, Chief Executive Officer of ATI. “The outpatient physical therapy market in the U.S. is large, growing and highly fragmented, and we believe that Advent’s resources and expertise with healthcare services companies will help us to continue to successfully execute and accelerate our expansion strategy. With Advent’s support, we will continue to focus on our core competencies that drive growth, operational efficiency and the very best physical therapy offering for patients across the country.”

Founded in 1996, ATI is a nationally-recognized rehabilitation provider, specializing in research-based physical therapy, workers’ compensation rehab, employer worksite solutions and sports medicine. ATI operates more than 500 clinics conveniently located in high-traffic areas across 19 U.S. states and the company is a leader in each of its top nine markets, with No.1 or No.2 positions by store count. In 2015, ATI’s facilities served nearly 300,000 unique patients. The company provides high-quality clinical care and is working with healthcare professionals and insurance providers to develop market-leading outcomes reporting capabilities in order to improve patient experience and quality of life.

“ATI has become a leader in its chosen markets and we see a number of avenues for continued growth and expansion,” said John Maldonado, a Managing Director at Advent. “ATI is a high-quality operator with best-in-class clinics, a strong leadership team and active de novo and acquisition strategies that we believe will enable it to grow by opening new ATI clinics and by being a primary consolidator in a fragmented industry. We are pleased to have the opportunity to work with the ATI team to enhance the company’s leadership position in the highly attractive and dynamic outpatient physical therapy market.”

The $15 billion outpatient physical therapy market is large and growing, with more than18,000 freestanding clinics in the United States providing cost-effective treatment options to patients dealing with any number of musculoskeletal injuries and other conditions. Advent expects the market will continue to grow based on the aging population’s need for physical therapy and the increased utilization of physical therapy by a wide range of age groups resulting from the growing awareness of physical therapy’s clinical value and cost effectiveness.

As part of the transaction, Advent Operating Partner Dr. Chris Krubert will join ATI’s Board of Directors. Dr. Krubert brings extensive healthcare services expertise, having served for nearly a decade as Chief Executive Officer of ApolloMD, a healthcare professional services firm consisting of more than 2,500 healthcare professionals specializing in a variety of fields. Advent’s Operating Partners serve as independent advisors to Advent and its portfolio companies and are a long-established element of the firm’s highly-operational approach to investing.

Advent has been investing in the healthcare sector for 25 years and has completed over 35 investments in 14 countries worldwide. Recent healthcare investments in the U.S. and Europe include Genoa, a QoL Healthcare Company, the largest specialty pharmacy operator in the U.S. focusing primarily on serving the needs of the mental health community; Mediq, a Netherlands-based international distributor of pharmaceuticals, medical devices and related care services; and Cotiviti, a leading payment accuracy provider in the U.S. CLICK LINK TO VIEW ARTICLE Source: https://www.adventinternational.com ABOUT ADVENT Founded in 1984, Advent International is one of the largest and most experienced global private equity firms. With offices on four continents, we have established a globally integrated team of more than 200 investment professionals, focused on buyouts and growth equity investments in five core sectors. Since initiating our private equity strategy in 1989, we have invested $47 billion in over 350 private equity investments across 41 countries, and as of June 30, 2019, managed $54.3 billion in assets. Today, as we did more than 30 years ago, we seek to invest in well-positioned companies and partner with management teams to create value through sustained revenue and earnings growth. INVESTMENT STRATEGY We employ a long-established strategy of operationally intensive, sector-focused investing across all of our markets globally. We seek to invest in well-positioned companies with operational and strategic improvement potential and partner with management teams to create value by driving revenue and earnings growth.

HOW WE ADD VALUE Across the globe, Advent employs a highly operational approach to investing. We partner with management teams to build long-term value in companies by accelerating revenue and earnings growth through operational improvements, strategic repositioning and market expansion, both domestically and internationally. Key to this approach is our resource-intensive platform. Our global team of more than 200 investment professionals, including an in-house Portfolio Support Group, is complemented by a network of over 95 independent Operating Partners, who work with us on a consulting basis to improve and grow the businesses in which we invest.

OUR VALUES Advent has a collegial culture with a strong focus on partnership. As an integrated global firm owned by our partners, we work together across offices and share responsibility for the success of our organization as one team. Common values that shape our business include trust, intellectual honesty and mutual respect.

Our emphasis on teamwork and joint accountability extends to our portfolio companies. We aim to make a con- structive contribution to businesses and leave them strongly positioned for the long term, working closely with management teams to achieve a collective vision for the future. SOURCE:www.adventinternational.com PROPERTY SUMMARY

THE OFFERING LEASE SUMMARY

Property Single-Tenant Medical Office Tenant ATI Physical Therapy 724 East Rollins Road Property Address Rent Increases 2% Annual Rental Escalations Round Lake Beach, IL 60073

Price $1,701,125 Guarantor Corporate Guarantee

Capitalization Rate 6.40% Lease Type NN

Price/SF $484.38 Lease Commencement 10/15/2020

Lease Expiration 10/14/2030 PROPERTY DESCRIPTION Lease Term 10 Years Year Built / Renovated 2020 Term Remaining on Lease (Years) 10 Years Gross Leasable Area 3,512

Zoning Commercial Renewal Options Two, Five-Year Options

Type of Ownership Fee Simple Landlord Responsibility Roof & Structure Occupancy 100% Tenant Responsibility Taxes, Insurance, CAM (Utilities)

Right of First Refusal/Offer NA RENT SCHEDULE

LEASE SUMMARY

YEAR ANNUAL RENT MONTHLY RENT RENT/SF CAP RATE

Current $108,872 $9,073 $31.00 6.40%

08/15/2021 $111,049 $9,254 $31.62 6.53%

08/15/2022 $113,262 $9,439 $32.25 6.66%

08/15/2023 $115,545 $9,629 $32.90 6.79%

08/15/2024 $117,863 $9,822 $33.56 6.93%

08/15/2025 $120,216 $10,018 $34.23 7.07%

08/15/2026 $122,604 $10,217 $34.91 7.21%

08/15/2027 $125,062 $10,422 $35.61 7.35%

08/15/2028 $127,556 $10,630 $36.32 7.50%

08/15/2029 $130,120 $10,843 $37.05 7.65%

OPTION 8/2030 $132,718 $11,060 $37.79 7.80%

OPTION 8/2031 $135,387 $11,282 $38.55 7.96%

OPTION 8/2032 $138,092 $11,508 $39.32 8.12%

OPTION 8/2033 $140,866 $11,739 $40.11 8.28%

OPTION 8/2034 $143,676 $11,973 $40.91 8.45%

OPTION 8/2035 $146,556 $12,213 $41.73 8.62%

OPTION 8/2036 $149,471 $12,456 $42.56 8.79%

OPTION 8/2037 $152,456 $12,705 $43.41 8.96%

OPTION 8/2038 $155,511 $12,959 $44.28 9.14%

OPTION 8/2039-8/2040 $158,637 $13,220 $45.17 9.33% PRICING MATRIX

ANNUALIZED OPERATING INFORMATION

Base Rental Income $108,872

Operating Expense Reimbursement $27,859

Gross Income $136,731

Operating Expenses $27,859

Net Operating Income $108,872

OPERATING EXPENSES

CAM ( Operating Costs) $8,956

Taxes $17,560

Management Fee $1,343

Total Expenses $27,859

Total Expenses Per SF $7.93

FINANCING

New Acquisition Financing $1,190,788

Loan to Value 70.00%

Interest Rate 3.50%

Amortization Period 25 Years

Loan Constant 6.01%

Annual Debt Service Payment $71,536

Year 1 Debt Service Coverage 1.52

Year 1 Debt Yield 9.14%

Year 1 Net Cash Flow After Debt Service $37,336

You Have a Choice

If you need therapy, YOU HAVE A CHOICE when selecting your provider. Explore all your options and discover how ATI will exceed your expectations. INVESTMENT OVERVIEW

Marcus & Millichap is pleased to present the fee-simple ownership interest in 724 East Rollins Road Round Lake Beach, Illinois. This 3,512-square foot medical office property boasts a brand-new, 2020 build-to-suit for its tenant ATI Physical Therapy. ATI operates the site under a fresh 10-year Net Lease with two percent annual rental escalators and two five-year options. The lease is corporately guaranteed by ATI Holdings Inc., a Delaware corporation that

provides leading services in physical therapy, workers compensation rehab, sports medicine, home health, and many more therapies offered throughout the United States. Current annual rental revenue generates $108,872 per year, with a two-percent escalation. Strategically positioned off Rollins Road, the site sees over 20,900 vehicles per day.

This property offers an investor the opportunity to acquire a long-term passive asset, featuring competitive rental escalations and renewal terms. The parcel

boasts excellent frontage and is corporately guaranteed by ATI Holdings Inc. The property yields a healthy DCR of 1.52 with a year 1 Debt Yield of 9.14 percent.

INVESTMENT HIGHLIGHTS

• New Construction ~ 2020 Build-To-Suit • Brand-New 10-Year Lease Structure • ATI Holdings Inc. Corporate-Guarantee • Attractive Two Percent Annual Rental Escalators

• Two Five-Year Renewal Options • Round Lake Beach Prime Retail Concentration • Premier Outlot to Meijer Grocery Store • Positioned on Busy Rollins Road Offering Excellent Visibility • Excellent Ingress/Egress to a Major Thoroughfare • High Traffic Counts - Exposure to over 20,900+ VPD

ATI PHYSICAL THERAPY SUBJECT PROPERTY

Market Overview section 2 ROUND LAKE BEACH, ILLINOIS LOCATED IN LAKE COUNTY ILLINOIS

Round Lake is a suburb of Chicago. Round Lake is in Lake County. Living in Round Lake offers residents a sparse suburban feel and most residents own their homes. In Round Lake there are a lot of parks. Many families and young professionals live in Round Lake and residents tend to have moderate political views. The public schools in Round Lake are above average.

B. Harris noticed that only a small portion of Round Lake’s shoreline had been built up since the coming of the railroad in 1901. The lake’s reputation as a resort area convinced him that the west side of the lake could be prof- itably developed even during the Great Depression. Charging as little as $295 for a summer home lacking electricity, water, and sanitary systems, Harris correctly believed that blue-collar Chicagoans would find his development attractive.

As the area’s population increased, demands for municipal services grew. Residents voted to incorporate in January 1937 since the neighboring village of Round Lake was unwilling to annex them. John J. Lynch was appointed the temporary president of a village whose name—Round Lake Beach—the state of Illinois refused to accept because of the prior existence of the village of Round Lake. After months of lobbying, the Illinois Secretary of State accepted the village name as sufficiently unique. Hans Roeh was elected village president at the end of April 1937.

Round Lake Beach’s population ballooned as returning World War II servicemen deserted the city for a suburban setting. The opportunity to have a home costing as little as $895 was a powerful attraction to those veterans. By the early 1960s, Round Lake Beach’s population surpassed that of neighboring Round Lake and made “The Beach,” as residents call the community, the largest population concentration in western Lake County. You don’t have to travel far from home to find yourself in another world. Just an hour north of Chicago, the magic in Lake County begins.

Source:www.liveability.com | www.lakecountyil.com Spring Summer Spring starts a month early in Lake County with its very own Restaurant Lake County has all you need for one-of-akind outdoor experiences. With a Week in early March. What’s on the menu? The flavors of over 60 participating wealth of lakes and waterways, Lake County is perfect for boating, swimming fine to casual dining destinations, brew pubs and cafés. Plus, you can enjoy and fishing. Hike tranquil trails while enjoying the beautiful scenery. Get your exclusive prix fixe menus and special offers that are only available during thrills on world-class roller coasters and water park slides. Don't miss on Grass these “Ten Days to Savor.” Lake: Blarney Island’s Thunder on the Chain, where the drag boats reach 150 mph on Thursday nights. And be sure to join the party at lively summer festivals, like Vernon Hills' Summer Celebration and Lake Zurich’s Rock the Block.

Winter Autumn Have the most wonderful time of the holiday season in Lake County. Enjoy Autumn in Lake County is that magical time when the forests and fields become skiing, snowmobiling or snowshoe through the beautiful Lake County Forest a riot of oranges, reds and vibrant yellows. From September through November, Preserves. Enjoy shopping for gifts at Gurnee Mills or one of our many specialty it’s also the season for the Lake County Spooks & Spirits Autumn Celebration. shops. Don’t miss our holiday event highlights: a Dickens Holiday to remember Enjoy family fun and music at The Great Highwood Pumpkin Festival. Enjoy in Libertyville or Six Flags Holiday in the Park. And, kids’ eyes will light up as the world-class corn mazes and more at Richardson Adventure Farm and Antioch brings holiday scenes to life with more than 60 oversized shadow boxes Didier Farms Pumpkin Fest. Get your thrills by day and frights by night at Six on display as part of their Kringle Christmas Village Tour. Flags Great America Fright Fest in Gurnee ~ featuring fun rides and haunted attractions. The spirits are very near on the Lake County Libation Trail, as local craft breweries, wineries and distilleries serve up flights, bites and pairings. Visit and discover the country’s fastest roller coaster, the world’s biggest corn maze and stallions that dance like ballet stars. Six Flags Great America in Gurnee, 17 of the country’s fastest, tallest and wildest roller coasters will take your breath away. This landmark amusement park has rides for every age -75 of them including the iconic, double-deck carousel. At Hurricane Harbor, your aquatic adventure includes ocean-size waves at the half-million gallon wave pool and jaw-dropping water slides. Everyone can have fun on the water and land when you stay at Gurnee’s Great Wolf Lodge. Slide snf whip through the vortexes of Coyote Cannon—one of 11 towering water slides at the resort’s huge indoor water park. Take a break and enjoy Adventure Park’s mini- golf, climbing wall, arcade and more. Everyone is cleared for takeoff at Extreme Flight Simulation in Gurnee— Chicagoland’s only flight simulator open to the public. Pilot a 737NG commercial jet to some of the world’s most famous and exotic airports. The aroma of funnel cakes means it’s time for an All- American classic: the 91st Annual Lake County Fair Get up-close-and-personal with birds, reptiles, amphibians, and mammals at the in Grayslake. The “Summer’s Best Fest” in late July Wildlife Discovery Center in Lake Forest. Set in a tallgrass prairie, this unique natural is five days and nights packed with national music history museum also offers science tours and nature walks. It’s showtime for the acts, great food, a midway, motocross and the Rodeo world’s most remarkable breed of horses at Old Mill Creek’s Tempel Farms. Thrill to a Stampede. It’s “island time” May through September performance of the famed Tempel Lipizzans stallions, learn about dressage riding and at Antioch’s Blarney Island- the “Key West of the tour the stables. Love Animals? At Lambs Farm in Libertyville, you’ll meet over 300 Midwest.” This is a unique Chain O’Lakes bar and of them in the farmyard, petting zoo and Dogwood Pet Shop. The kids will also adore restaurant, and is accessible only by boat. Bring your the old-world carousel and mini-train. Get ready for an amazing Fall Season. There is own or take the boat shuttle from Port of Blarney for a PumpkinFest at Didier Farms in Lincolnshire which features a mind-boggling corn a relaxing afternoon. Take a spin over to WhirlyBall maze, hayrides, an exotic zoo and kiddie rides. Lose yourself in the world’s largest in Vernon Hills for a “crazy-fun” mash-up of hockey corn maze at Richardson Adventure Farms in Spring Grove. Attractions also include a and lacrosse played in souped-up bumper cars. 700-foot-long zipline, petting zoo,pumpkin patch and rides.

Source: https://lfparksandrec.com/wildlife-discovery-center Source: https://www.visitlakecounty.org/SixFlagsGreatAmericaandHurricane- LAKEFRONT PARK OF ROUND LAKE BEACH

A beautiful park that is open to the residents and the public. Ancient oak trees line the shore and the park. A great place to bring the children and family to play, swim, picnic or celebrate! Children's playground, bathroom facilities, picnic tables, 4 shelters, path and overlook along the shoreline for walking and enjoying, sandy beach for swimming with lifeguards during posted hours and boat launch.

Boating Public Park Jet Ski Swimming

Source:https://www.visitlakecounty.org/LakefrontParkofRoundLakeBeach 76,974

POPULATION STATISTIC WITHIN A THREE -MILE RADIUS

50,890

TOTAL HOUSEHOLDS IN A FIVE MILE RADIUS

$97,805

AVERAGE HOUSEHOLD INCOME IN A THREE-MILE RADIUS

Subject Property Render Photo

EXCLUSIVELY LISTED BY: Broker of Record - Steven Weinstock Marcus & Millichap One Mid America Plaza, Suite 200 Oakbrook Terrace, IL 60181 Tel: 630-570-2200 Fax: 630-570-2323 [email protected]