American Realty Capital Healthcare Trust Iii Inactive
Filed: 29 Sep 17, 12:00am
Exhibit (c)(3)
NOTE: A request for confidential treatment has been made with respect to portions of the following document that are marked ***. The redacted portions have been submitted separately with the Securities and Exchange Commission.
PROJECT PELICAN DISCUSSION MATERIALS March 6, 2017
POTENTIAL INTEREST - FEEDBACK DATE COMPANY BANKER NDA STATUS STATUS / NOTES CONTACTED *** Houser 8/10/16 Executed Preliminary Interested in 11 assets (2 senior housing and 9 MOBs) 10/24/16 Bid *** Houser 12/6/16 Executed Preliminary Interested in all 19 assets, citing an interest in the portfolio at a range of Bid $105mm-$110mm, all cash; have not really dug in at this time *** Houser 5/17/16 Executed TBD Interested in 3 assets (2 senior housing and 1 MOBs). Would be willing to split 10/24/16 MOB & SH. Unwilling to provide pricing guidance at this time due to capital raising challenges HTI Houser 3/3/17 Executed Preliminary Interested in entire portfolio for an aggregate bid of $98.5mm Bid *** Bencina 1/12/17 Executed LOI Interested in 5 single-tenant MOB assets for an aggregated bid of $19.295mm *** Dupuy 5/20/16 Executed Preliminary Interested in 2 assets (2 senior housing). Initial pricing for Cedarhurst (RIDEA) is 10/25/16 Bid $9.5MM-$10.0MM. Initial pricing for Arcadian Cove (Net Lease) is $3.7MM- $4.0MM *** Bencina 1/12/17 Sent Pass Could not agree upon certain clauses in the NDA. Length of remaining lease 1/31/17 terms on the single-tenant MOBs not attractive enough for them to make an exception on the NDA *** Bencina 1/12/17 Sent Pass No response; likely a pass. Interest would have been in the single-tenant MOBs *** Houser 8/10/16 Executed Pass After initial indications of interest in a strategic wholeco deal, their interest 10/25/16 faded. They officially passed on 2/7/17 11/3/16
HCIII PORTFOLIO ACQUISITION SUMMARY ACQUISITION ACQUISITION ACQUISITION PROPERTY NAME CITY STATE DATE PRICE CAP RATE ASSISTED LIVING Cedarhurst (RIDEA) Collinsville IL 8/21/15 $11,600,000 7.14% Arcadian Cove (Net Lease) Richmond KY 8/25/15 4,775,000 7.33% 2 PROPERTIES $16,375,000 7.21% MEDICAL OFFICE DaVita Bay Breeze Dialysis Center Largo FL 3/6/15 1,650,000 6.82% RAI Care Center Clearwater FL 4/20/15 4,750,000 7.11% DaVita Dialysis Hudson FL 5/4/15 2,725,000 7.12% Rockwall Medical Plaza Rockwall TX 6/11/15 6,639,000 6.13% Decatur Medical Office Building Decatur GA 7/24/15 5,100,000 10.16% MetroHealth Buckeye Health Center Cleveland OH 8/3/15 5,550,000 7.59% Philip Professional Center Lawrenceville GA 8/14/15 9,000,000 6.50% Galesburg VA Outpatient Clinic Galesburg IL 8/25/15 2,630,000 7.16% Illinois CancerCare Clinic Galesburg IL 8/25/15 3,400,000 7.16% Woodlake Office Center Woodbury MN 9/11/15 14,400,000 7.01% Greenfield Medical Plaza Gilbert AZ 10/8/15 7,000,000 7.05% Lee Mem. Health Sys. Outpatient Ctr Fort Myers FL 10/22/15 5,275,000 7.16% Beaumont Medical Center Warren MI 12/4/15 13,650,000 8.08% Madison Medical Plaza Joliet IL 12/4/15 19,500,000 6.27% UnityPoint Clinic - Muscatine Muscatine IA 12/31/15 5,592,041 7.37% UnityPoint Clinic - Moline Moline IL 12/31/15 3,578,786 7.36% 17 PROPERTIES $110,439,827 7.16% 19 TOTAL PROPERTIES $126,814,827 7.17%
POTENTIAL INTEREST SIDE-BY-SIDE COMPARISON (LESS ***) FOUR BIDS FOR SEPARATE SUB-PORTFOLIOS HAVE BEEN RECEIVED FOR A TOTAL OF 16 ASSETS. BASED ON THESE BIDS, ONLY THREE MULTI-TENANT MOBS ARE REMAINING PROPERTY NAME CITY STATE ACQUISITION DATE REMAINDER ASSISTED LIVING CEDARHURST (RIDEA) COLLINSVILLE IL 8/21/15 XX ARCADIAN COVE (NET LEASE) RICHMOND KY 8/25/15 XX 2 PROPERTIES MEDICAL OFFICE: SINGLE-TENANT DAVITA BAY BREEZE DIALYSIS CENTER LARGO FL 3/6/15 X DECATUR MEDICAL OFFICE BUILDING DECATUR GA 7/24/15 X METROHEALTH BUCKEYE HEALTH CENTER CLEVELAND OH 8/3/15 X GALESBURG VA OUTPATIENT CLINIC GALESBURG IL 8/25/15 X ILLINOIS CANCERCARE CLINIC GALESBURG IL 8/25/15 X WOODLAKE OFFICE CENTER WOODBURY MN 9/11/15 X LEE MEM. HEALTH SYS. OUTPATIENT CTR FORT MYERS FL 10/22/15 X UNITYPOINT CLINIC - MUSCATINE MUSCATINE IA 12/31/15 X UNITYPOINT CLINIC - MOLINE MOLINE IL 12/31/15 X 9 PROPERTIES MEDICAL OFFICE: MULTI-TENANT RAI CARE CENTER CLEARWATER FL 4/20/15 X DAVITA DIALYSIS HUDSON FL 5/4/15 X ROCKWALL MEDICAL PLAZA ROCKWALL TX 6/11/15 X PHILIP PROFESSIONAL CENTER LAWRENCEVILLE GA 8/14/15 X GREENFIELD MEDICAL PLAZA GILBERT AZ 10/8/15 X BEAUMONT MEDICAL CENTER WARREN MI 12/4/15 X MADISON MEDICAL PLAZA JOLIET IL 12/4/15 X X 8 TOTAL PROPERTIES 1 7 PROPERTIES 19 TOTAL PROPERTIES NOTE: DOES NOT INCLUDE ***'S BID FOR ENTIRE PORTFOLIO 3
COMBINED BIDS (*** + *** + ***) IMPLIED NAV PURCHASE IMPLIED CAP RATE PROPERTY 2016E NOI 2017E NOI CAP RATE 2016E NOI 2017E NOI GAV DaVita Bay Breeze $114,605 $116,897 6.82% 8.86% 9.04% $1,293,000 Decatur MOB 525,793 478,875 10.16% 8.06% 7.34% 6,524,000 MetroHealth Buckeye 421,051 421,238 7.59% 8.83% 8.75% 4,813,855 Woodlake Office Center 1,015,504 1,035,814 7.01% 8.83% 8.75% 11,837,153 Lee Memorial 374,662 384,031 7.16% 9.24% 9.47% 4,056,000 UnityPoint Muscatine 391,442 391,441 7.37% 9.10% 8.65% 4,527,000 Unity Point Moline 250,344 250,343 7.36% 9.10% 8.65% 2,895,000 Galesburg Portfolio 433,367 438,618 7.16% 8.83% 8.75% 5,012,472 Rockwall Medical Plaza 458,713 468,605 6.13% 8.83% 8.75% 5,355,159 Greenfield Medical Center 525,580 530,735 7.05% 8.83% 8.75% 6,065,173 Beaumont Medical Center 1,154,214 1,134,309 8.08% 8.83% 8.75% 12,962,741 Madison Medical Center 1,305,473 1,238,502 6.27% 8.83% 8.75% 14,153,446 Cedarhurst of Collinsville (RIDEA) 898,691 934,911 7.14% 9.02% 9.34% 10,009,204 Arcadian Cove (NNN) 350,000 358,750 7.33% 9.02% 9.34% 3,840,796 $8,219,438 $8,183,068 Portfolio GAV $93,345,000 Plus: Total Assets 17,363,000 Less: Total Liabilities 7,618,000 NET ASSET VALUE (EXCLUDING 3 REMAINDER ASSETS) $103,090,000 Common Shares Outstanding 6,983,437 NET ASSET VALUE PER SHARE $14.76 NOTE: THE “COMBINED BIDS” SCENARIO LEAVES 3 ASSETS, WITH A COST BASIS OF $16.475MM, UNADDRESSED. FOR 2016E NOI, 8.83% IMPLIED CAP RATE USED FOR *** ASSETS; 9.10% IMPLIED CAP RATE USED FOR *** ASSETS; 9.02% CAP RATE USED FOR *** ASSETS. FOR 2017E NOI, 8.75% IMPLIED CAP RATE USED FOR *** ASSETS; 8.65% IMPLIED CAP RATE USED FOR *** ASSETS; 9.34% CAP RATE USED FOR *** ASSETS. 4
*** (PRELIMINARY BID) IMPLIED NAV PURCHASE IMPLIED CAP RATE PROPERTY 2016E NOI 2017E NOI CAP RATE 2016E NOI 2017E NOI GAV DaVita Bay Breeze $114,605 $116,897 6.82% 8.54% 8.52% $1,371,492 Decatur MOB 525,793 478,875 10.16% 8.54% 8.52% 5,618,406 MetroHealth Buckeye 421,051 421,238 7.59% 8.54% 8.52% 4,942,179 Woodlake Office Center 1,015,504 1,035,814 7.01% 8.54% 8.52% 12,152,699 Lee Memorial 374,662 384,031 7.16% 8.54% 8.52% 4,505,648 UnityPoint Muscatine 391,442 391,441 7.37% 8.54% 8.52% 4,592,584 Unity Point Moline 250,344 250,343 7.36% 8.54% 8.52% 2,937,153 Galesburg Portfolio 433,367 438,618 7.16% 8.54% 8.52% 5,146,090 RAI Care Center 348,270 352,117 7.11% 8.54% 8.52% 4,131,216 DaVita Dialysis 198,030 201,990 7.12% 8.54% 8.52% 2,369,850 Rockwall Medical Plaza 458,713 468,605 6.13% 8.54% 8.52% 5,497,913 Philips Professional Center 629,528 638,482 6.50% 8.54% 8.52% 7,490,997 Greenfield Medical Center 525,580 530,735 7.05% 8.54% 8.52% 6,226,854 Beaumont Medical Center 1,154,214 1,134,309 8.08% 8.54% 8.52% 13,308,292 Madison Medical Center 1,305,473 1,238,502 6.27% 8.54% 8.52% 14,530,738 Cedarhurst of Collinsville (RIDEA) 898,691 934,911 7.14% 8.54% 8.52% 10,968,850 Arcadian Cove (NNN) 350,000 358,750 7.33% 8.54% 8.52% 4,209,038 $9,395,266 $9,375,657 Portfolio GAV $110,000,000 Plus: Total Assets 17,363,000 Less: Total Liabilities 7,618,000 NET ASSET VALUE $119,745,000 Common Shares Outstanding 6,983,437 NET ASSET VALUE PER SHARE $17.15 NOTE: THE *** (PRELIMINARY BID) COVERS THE ENTIRE PORTFOLIO 5
HTI (PRELIMINARY BID) IMPLIED NAV PURCHASE IMPLIED CAP RATE PROPERTY 2016E NOI 2017E NOI CAP RATE 2016E NOI 2017E NOI GAV DaVita Bay Breeze $114,605 $116,897 6.82% 9.54% 9.52% $1,228,109 Decatur MOB 525,793 478,875 10.16% 9.54% 9.52% 5,031,027 MetroHealth Buckeye 421,051 421,238 7.59% 9.54% 9.52% 4,425,497 Woodlake Office Center 1,015,504 1,035,814 7.01% 9.54% 9.52% 10,882,189 Lee Memorial 374,662 384,031 7.16% 9.54% 9.52% 4,034,603 UnityPoint Muscatine 391,442 391,441 7.37% 9.54% 9.52% 4,112,450 Unity Point Moline 250,344 250,343 7.36% 9.54% 9.52% 2,630,087 Galesburg Portfolio 433,367 438,618 7.16% 9.54% 9.52% 4,608,090 RAI Care Center 348,270 352,117 7.11% 9.54% 9.52% 3,699,317 DaVita Dialysis 198,030 201,990 7.12% 9.54% 9.52% 2,122,093 Rockwall Medical Plaza 458,713 468,605 6.13% 9.54% 9.52% 4,923,131 Philips Professional Center 629,528 638,482 6.50% 9.54% 9.52% 6,707,847 Greenfield Medical Center 525,580 530,735 7.05% 9.54% 9.52% 5,575,865 Beaumont Medical Center 1,154,214 1,134,309 8.08% 9.54% 9.52% 11,916,971 Madison Medical Center 1,305,473 1,238,502 6.27% 9.54% 9.52% 13,011,615 Cedarhurst of Collinsville (RIDEA) 898,691 934,911 7.14% 9.54% 9.52% 9,822,107 Arcadian Cove (NNN) 350,000 358,750 7.33% 9.54% 9.52% 3,769,002 $9,395,266 $9,375,657 Portfolio GAV $98,500,000 Plus: Total Assets 17,363,000 Less: Total Liabilities 7,618,000 NET ASSET VALUE $108,245,000 Common Shares Outstanding 6,983,437 NET ASSET VALUE PER SHARE $15.50 NOTE: THE HTI (PRELIMINARY BID) COVERS THE ENTIRE PORTFOLIO 6
BID ANALYSIS *** PROPERTY NAME ACQUISITION PRICE ACQUISITION CAP RATE 2016E NOI 2017E NOI *** 2016E NOI 2017E NOI ASSISTED LIVING 0 PROPERTIES $0 0.00% $0 $0 $0 $0 MEDICAL OFFICE: SINGLE-TENANT METROHEALTH BUCKEYE HEALTH CENTER GALESBURG VA OUTPATIENT CLINIC ILLINOIS CANCERCARE CLINIC WOODLAKE OFFICE CENTER 5.550.000 2.630.000 3.400.0 14,400,000 7.59% 7.16% 7.16% 7.01% 421,051 184,167 249,200 1,015,504 421,238 184,434 254,184 1,035,814 ^ ^ ^ ^ 421,051 184,167 249,200 1,015,504 421,238 184,434 254,184 1,035,814 4 PROPERTIES $25,980,000 7.22% $1,869,922 $1,895,670 $1,869,922 $1,895,670 MEDICAL OFFICE: MULTI-TENANT ROCKWALL MEDICAL PLAZA 6,639,000 6.13% 458,713 468,605 X 458,713 468,605 GREENFIELD MEDICAL PLAZA BEAUMONT MEDICAL CENTER MADISON MEDICAL PLAZA 7,000,000 13.650.000 19.500.000 7.05% 8.08% 6.27% 525,580 1,154,214 1,305,473 530,735 1,134,309 1,238,502 X X X 525,580 1,154,214 1,305,473 530,735 1,134,309 1,238,502 4 PROPERTIES $46,789,000 6.82% $3,443,980 $3,372,151 $3,443,980 $3,372,151 8 PROPERTIES $72,769,000 6.96% $5,313,902 $5,267,821 $5,313,902 $5,267,821 8 TOTAL PROPERTIES $72,769,000 6.96% $5,313,902 $5,267,821 $5,313,902 $5,267,821 $72,769,000 $5,313,902 $5,267,821 $60,200,000 $5,313,902 $5,267,821 IMPLIED CAP 7.30% 7.24% 8.83% 8.75% COMPARISON OF BID TO HCIII ACQUISTION ($12,569,000) 1.87% 1.79%
BID ANALYSIS *** PROPERTY NAME ACQUISITION PRICE ACQUISITION CAP RATE 2016E NOI 2017E NOI *** 2016E NOI 2017E NOI ASSISTED LIVING 0 PROPERTIES $0 0.00% $0 $0 $0 $0 MEDICAL OFFICE: SINGLE-TENANT DAVITA BAY BREEZE DIALYSIS CENTER DECATUR MEDICAL OFFICE BUILDING 1.650.000 5.100.000 6.82% 10.16% 114,605 525,793 116,897 478,875 X X 114,605 525,793 116,897 478,875 LEE MEM. HEALTH SYS. OUTPATIENT CTR UNITYPOINT CLINIC - MUSCATINE UNITYPOINT CLINIC - MOLINE 5,275,000 5,592,041 3,578,786 7.16% 7.37% 7.36% 374,662 412,044 263,520 384,031 391,441 250,343 X X X 374,662 412,044 263,520 384,031 391,441 250,343 5 PROPERTIES $21,195,827 8.63% $1,690,624 $1,621,587 $1,690,624 $1,621,587 MEDICAL OFFICE: MULTI-TENANT 0 PROPERTIES $0 0.00% $0 $0 $0 $0 5 PROPERTIES $21,195,827 8.63% $1,690,624 $1,621,587 $1,690,624 $1,621,587 5 TOTAL PROPERTIES $21,195,827 8.63% $1,690,624 $1,621,587 $1,690,624 $1,621,587 $21,195,827 $1,690,624 $1,621,587 $19,295,000 $1,690,624 $1,621,587 IMPLIED CAP 7.98% 7.65% 8.76% 8.40% COMPARISON OF BID TO HCIII ACQUISTION ($1,900,827) 0.14% -0.22%
BID ANALYSIS *** PROPERTY NAME ACQUISITION PRICE ACQUISITION CAP RATE 2016E NOI 2017E NOI *** 2016E NOI 2017E NOI ASSISTED LIVING CEDARHURST (RIDEA) ARCADIAN COVE (NET LEASE) $11,600,000 $4,775,000 7.14% 7.33% 898,691 350,000 934,911 358,750 X X 898,691 350,000 934,911 358,750 $16,375,000 7.21% $1,248,691 $1,293,661 $1,248,691 $1,293,661 MEDICAL OFFICE: SINGLE-TENANT 0 PROPERTIES $0 0.00% $0 $0 $0 $0 MEDICAL OFFICE: MULTI-TENANT 0 PROPERTIES $0 0.00% $0 $0 $0 $0 2 PROPERTIES $0 0.00% $0 $0 $0 $0 2 TOTAL PROPERTIES $16,375,000 3.61% $1,248,691 $1,293,661 $1,248,691 $1,293,661 $16,375,000 $1,248,691 $1,293,661 $13,850,000 $1,248,691 $1,293,661 IMPLIED CAP 7.63% 7.90% 9.02% 9.34% COMPARISON OF BID TO HCIII ACQUISTION ($2,525,000) 5.41% 5.73% ^
BID ANALYSIS *** ACQUISITION ACQUISITION PROPERTY NAME PRICE CAP RATE 2016E NOI 2017E NOI *** 2016E NOI 2017E NOI ASSISTED LIVING CEDARHURST (RIDEA) $11,600,000 7.14% 898,691 934,911 X 898,691 934,911 ARCADIAN COVE (NET LEASE) $4,775,000 7.33% 350,000 358,750 X 350,000 358,750 7.21% $1,248,691 $1,293,661 $1,248,691 $1,293,661 MEDICAL OFFICE: SINGLE-TENANT DAVITA BAY BREEZE DIALYSIS CENTER 1,650,000 6.82% 114,605 116,897 X 114,605 116,897 DECATUR MEDICAL OFFICE BUILDING 5, 1 00,000 10.16% 525,793 478,875 X 525,793 478,875 METROHEALTH BUCKEYE HEALTH CENTER 5,550,000 7.59% 421,051 421,238 X 421,051 421,238 GALESBURG VA OUTPATIENT CLINIC 2,630,000 7.16% 184,167 184,434 X 184,167 184,434 ILLINOIS CANCERCARE CLINIC 3,400,000 7.16% 249,200 254,184 X 249,200 254,184 WOODLAKE OFFICE CENTER 14,400,000 7.01% 1,015,504 1,035,814 X 1,015,504 1,035,814 LEE MEM. HEALTH SYS. OUTPATIENT CTR 5,275,000 7.16% 374,662 384,031 X 374,662 384,031 UNITYPOINT CLINIC - MUSCATINE 5,592,041 7.37% 391,441 391,441 X 391,441 391,441 UNITYPOINT CLINIC - MOLINE 3,578,786 7.36% 250,344 250,343 X 250,344 250,343 9 PROPERTIES $47,175,827 7.93% $3,526,766 $3,517,257 $3,526,766 $3,517,257 MEDICAL OFFICE: MULTI-TENANT RAI CARE CENTER 4,750,000 7.11% 348,270 352,117 X 348,270 352,117 DAVITA DIALYSIS 2,725,000 7.12% 198,030 201,990 X 198,030 201,990 ROCKWALL MEDICAL PLAZA 6,639,000 6.13% 458,713 468,605 X 458,713 468,605 PHILIP PROFESSIONAL CENTER 9,000,000 6.50% 629,528 638,482 X 629,528 638,482 GREENFIELD MEDICAL PLAZA 7,000,000 7.05% 525,580 530,735 X 525,580 530,735 BEAUMONT MEDICAL CENTER 13,650,000 8.08% 1,154,214 1,134,309 X 1,154,214 1,134,309 MADISON MEDICAL PLAZA 19,500,000 6.27% 1,305,473 1,238,502 X 1,305,473 1,238,502 8 PROPERTIES $63,264,000 6.81% $4,619,808 $4,564,740 $4,619,808 $4,564,740 17 PROPERTIES $110,439,827 7.30% $8,146,574 $8,081,997 $8,146,574 $8,081,997 17 TOTAL PROPERTIES $126,814,827 6.08% $9,395,265 $9,375,657 $9,395,265 $9,375,657 $126,814,827 $9,395,265 $9,375,657 $110,000,000 $9,395,265 $9,375,657 IMPLIED CAP 7.41% 7.39% 8.54% 8.52% COMPARISON OF BID TO HCIII ACQUISTION ($16,814,827) 2.46% 2.45% ^
INDICATION OF INTEREST ANALYSIS *** PROPERTY NAME ACQUISITION PRICE ACQUISITION CAP RATE 2016E NOI 2017E NOI *** 2016E NOI 2017E NOI ASSISTED LIVING CEDARHURST (RIDEA) ARCADIAN COVE (NET LEASE) $11,600,000 $4,775,000 7.14% 7.33% 898,691 350,000 934,911 358,750 X X 898,691 350,000 934,911 358,750 $16,375,000 7.21% $1,248,691 $1,293,661 $1,248,691 $1,293,661 MEDICAL OFFICE: SINGLE-TENANT 0 PROPERTIES $0 0.00% $0 $0 $0 $0 MEDICAL OFFICE: MULTI-TENANT MADISON MEDICAL PLAZA 19,500,000 6.27% 1,305,473 1,238,502 X 1,305,473 1,238,502 1 PROPERTIES $19,500,000 6.27% $1,305,473 $1,238,502 $1,305,473 $1,238,502 3 PROPERTIES $19,500,000 6.27% $1,305,473 $1,238,502 $1,305,473 $1,238,502 3 TOTAL PROPERTIES $35,875,000 4.34% $2,554,164 $2,532,163 $2,554,164 $2,532,163 $35,875,000 $2,554,164 $2,532,163 N/A $2,554,164 $2,532,163 IMPLIED CAP 7.12% 7.06% N/A N/A COMPARISON OF BID TO HCIII ACQUISTION N/A N/A N/A ^
POTENTIAL REMAINING PORTFOLIO (IN THE *** + *** + *** SCENARIO) PROPERTY NAME ACQUISITION PRICE ACQUISITION CAP RATE 2016E NOI 2017E NOI REMAINDER 2016E NOI 2017E NOI ASSISTED LIVING 0 PROPERTIES $0 0.00% $0 $0 $0 $0 MEDICAL OFFICE: SINGLE-TENANT 0 PROPERTIES $0 0.00% $0 $0 $0 $0 MEDICAL OFFICE: MULTI-TENANT RAI CARE CENTER DAVITA DIALYSIS 4.750.000 2.725.000 7.11% 7.12% 348,270 198,030 352,117 201,990 X X 348,270 198,030 352,117 201,990 PHILIP PROFESSIONAL CENTER 9,000,000 6.50% 629,528 638,482 X 629,528 638,482 3 PROPERTIES $16,475,000 6.77% $1,175,828 $1,192,589 $1,175,828 $1,192,589 11 PROPERTIES $16,475,000 6.77% $1,175,828 $1,192,589 $1,175,828 $1,192,589 1 1 TOTAL PROPERTIES $16,475,000 6.77% $1,175,828 $1,192,589 $1,175,828 $1,192,589 $16,475,000 $1,175,828 $1,192,589 $14,003,750 $1,175,828 $1,192,589 IMPLIED CAP 7.14% 7.24% 8.40% 8.52% COMPARISON OF BID TO HCIII ACQUISTION ($2,471,250) 1.63% 1.75% ^ NOTE: VALUE OF REMAINING ASSETS IS BASED ON AVERAGE DISCOUNT TO COST (~15%) BASED ON BIDS 12
INDICATION OF INTEREST ANALYSIS HTI PROPERTY NAME ACQUISITION PRICE ACQUISITION CAP RATE 2016E NOI 2017E NOI HTI 2016E NOI 2017E NOI ASSISTED LIVING CEDARHURST (RIDEA) ARCADIAN COVE (NET LEASE) $11,600,000 $4,775,000 7.14% 7.33% 898,691 350,000 934,911 358,750 XX 898,691 350,000 934,911 358,750 2 PROPERTIES $16,375,000 7.21% $1,248,691 $1,293,661 $1,248,691 $1,293,661 MEDICAL OFFICE: SINGLE-TENANT DAVITA BAY BREEZE DIALYSIS CENTER 1,650,000 6.82% 114,605 116,897 X 114,605 116,897 DECATUR MEDICAL OFFICE BUILDING 5,100,000 10.16% 525,793 478,875 X 525,793 478,875 METROHEALTH BUCKEYE HEALTH CENTER 5,550,000 7.59% 421,051 421,238 X 421,051 421,238 GALESBURG VA OUTPATIENT CLINIC 2,630,000 7.16% 184,167 184,434 X 184,167 184,434 ILLINOIS CANCERCARE CLINIC 3,400,000 7.16% 249,200 254,184 X 249,200 254,184 WOODLAKE OFFICE CENTER 14,400,000 7.01% 1,015,504 1,035,814 X 1,015,504 1,035,814 LEE MEM. HEALTH SYS. OUTPATIENT CTR 5,275,000 7.16% 374,662 384,031 X 374,662 384,031 UNITYPOINT CLINIC - MUSCATINE 5,592,041 7.37% 391,441 391,441 X 391,441 391,441 UNITYPOINT CLINIC - MOLINE 3,578,786 7.36% 250,344 250,343 X 250,344 250,343 9 PROPERTIES $47,175,827 7.93% $3,526,766 $3,517,257 $3,526,766 $3,517,257 MEDICAL OFFICE: MULTI-TENANT RAI CARE CENTER 4,750,000 7.11% 348,270 352,117 X 348,270 352,117 DAVITA DIALYSIS 2,725,000 7.12% 198,030 201,990 X 198,030 201,990 ROCKWALL MEDICAL PLAZA 6,639,000 6.13% 458,713 468,605 X 458,713 468,605 PHILIP PROFESSIONAL CENTER 9,000,000 6.50% 629,528 638,482 X 629,528 638,482 GREENFIELD MEDICAL PLAZA 7,000,000 7.05% 525,580 530,735 X 525,580 530,735 BEAUMONT MEDICAL CENTER 13,650,000 8.08% 1,154,214 1,134,309 X 1,154,214 1,134,309 MADISON MEDICAL PLAZA 19,500,000 6.27% 1,305,473 1,238,502 X 1,305,473 1,238,502 8 PROPERTIES $63,264,000 6.81% $4,619,808 $4,564,740 $4,619,808 $4,564,740 1 7 PROPERTIES $110,439,827 7.30% $8,146,574 $8,081,997 $8,146,574 $8,081,997 1 7 TOTAL PROPERTIES $126,814,827 6.08% $9,395,265 $9,375,657 $9,395,265 $9,375,657 ^ $126,814,827 $9,395,265 $9,375,657 $98,500,000 $9,395,265 $9,375,657 IMPLIED CAP 7.41% 7.39% 9.54% 9.52% COMPARISON OF BID TO HCIII ACQUISTION ($28,314,827) 3.46% 3.44% ^
POTENTIAL REMAINING PORTFOLIO (CONT’D) ACQUISITION ACQUISITION SIZE (SF) PRICE CAP RATE MOB: MULTI-TENANT CITY, STATE MSA / NEAREST MSA RAI Care Center Clearwater, FL Clearwater/Tampa 14,936 $4,750,000 7.11% DaVita Dialysis Hudson, FL Clearwater/Tampa 8,984 2,725,000 7.12% Philip Professional Center Lawrenceville, GA Atlanta 31,483 9,000,000 6.50% MULTI-TENANT TOTAL 55,403 $16,475,000 6.77% ALL MOB 55,403 $16,475,000 6.77%
BID COMPARISON (***+***+*** VS ***) IMPLIED NAV GROSS ASSET VALUE (GAV) PROPERTY ***+***+*** *** Portfolio GAV $93,345,000 $110,000,000 Plus: Total Assets 17,363,000 17,363,000 Less: Total Liabilities 7,618,000 7,618,000 NET ASSET VALUE $103,090,000 $119,745,000 Common Shares Outstanding 6,983,437 6,983,437 NET ASSET VALUE PER SHARE $14.76 $17.15 Potential Brokered Assets Value $14,003,750 Potential Broker Fee 280,075 Adjusted GAV $107,068,675 $110,000,000 Adjusted NAV $116,813,675 $119,745,000 Adjusted NAV Per Share $16.73 $17.15 NOTE: POTENTIAL BROKERED ASSETS ASSUME A VALUE OF 15% DISCOUNT TO COST, BASED ON OTHER BIDS. POTENTIAL BROKER FEE ASSUMES A 2.00% FEE CHARGED ON THE SALE OF THE THREE REMAINING ASSETS 15
BID COMPARISON (***+***+*** VS HTI) IMPLIED NAV GROSS ASSET VALUE (GAV) PROPERTY ***+***+*** HTI Portfolio GAV $93,345,000 $98,500,000 Plus: Total Assets 17,363,000 17,363,000 Less: Total Liabilities 7,618,000 7,618,000 NET ASSET VALUE $103,090,000 $108,245,000 Common Shares Outstanding 6,983,437 6,983,437 NET ASSET VALUE PER SHARE $14.76 $15.50 Potential Brokered Assets Value $14,003,750 Potential Broker Fee 280,075 Adjusted GAV $107,068,675 $98,500,000 Adjusted NAV $116,813,675 $108,245,000 Adjusted NAV Per Share $16.73 $15.50 HTI bid effectively attributes a total value of $5.16mm for the remaining three assets, a 68.7% discount to cost NOTE: POTENTIAL BROKERED ASSETS ASSUME A VALUE OF 15% DISCOUNT TO COST, BASED ON OTHER BIDS. POTENTIAL BROKER FEE ASSUMES A 2.00% FEE CHARGED ON THE SALE OF THE THREE REMAINING ASSETS 16
SUMMARY CONCLUSIONS INITIAL CORE PROCESS AND DECEMBER 2016/JANUARY 2017 EFFORT Feedback on our portfolio has been fairly consistent throughout the processes Covers difference types of buyers Spans approximately nine months of marketing ***’s reluctance to bid is fairly telling We do not expect this sentiment to change Certain asset-specific statistics will only get worse for us Buyers will continue to be disciplined Unfortunately, two of who we considered our most likely buyers have challenges with their fund raising This is an independent issue, but the portfolio feedback feeds into this challenge The macro environment will likely not get any more constructive for us Recent new supply has hit the market, making it increasingly challenging to keep the focus of potential bidders