Confidentiality Agreement - Microsoft

Tennova Healthcare An Office Investment Opportunity2 5 7 BA N CO R PS O U T H PA R K WAY, JAC KS O N , T N 3 8 3 0 5

James R. MorrisSenior Vice President

615 850 [email protected]

Lee Ann JamesAssociate

615 850 2765 [email protected]

P. 2 : TENNOVA HEALTHCARE : OFFERING MEMORANDUM | COLLIERS INTERNATIONAL

This Offering Memorandum contains select information pertaining to the business and affairs of the Property at 257 Bancorpsouth Parkway, Jackson, TN. It has been prepared by Colliers International. This Offering Memorandum may not be all-inclusive or contain all of the information a prospective purchaser may desire. The information contained in this Offering Memorandum is confidential and furnished solely for the purpose of a review by a prospective purchaser of the Property. It is not to be used for any other purpose or made available to any other person without the written consent of Seller or Colliers International. The material is based in part upon information supplied by the Seller and in part upon financial information obtained by Colliers International from sources it deems reliable. Owner, nor their officers, employees, or agents makes any representation or warranty, express or implied, as to the accuracy or completeness or this Offering Memorandum or any of its contents and no legal liability is assumed or shall be implied with respect thereto. Prospective purchasers should make their own projections and form their own conclusions without reliance upon the material contained herein and conduct their own due diligence.

By acknowledging your receipt of this Offering Memorandum from Colliers International, you agree:

1. The Offering Memorandum and its contents are confidential;

2. You will hold it and treat it in the strictest of confidence; and

3. You will not, directly or indirectly, disclose or permit anyone else to disclose this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Seller.

Owner and Colliers International expressly reserve the right, at their sole discretion, to reject any and all expressions of interest or offers to purchase the Property and to terminate discussions with any person or entity reviewing this Offering Memorandum or making an offer to purchase the Property unless and until a written agreement for the purchase and sale of the Property has been fully executed and delivered.

If you wish not to pursue negotiations leading to the acquisition of 257 Bancorpsouth Parkway, Jackson, TN or in the future you discontinue such negotiations, then you agree to purge all materials relating to this Property including this Offering Memorandum.

A prospective purchaser’s sole and exclusive rights with respect to this prospective transaction, the Property, or information provided herein or in connection with the sale of the Property shall be limited to those expressly provided in an executed Purchase Agreement and shall be subject to the terms thereof. In no event shall a prospective purchaser have any other claims against Seller or Colliers International or any of their affiliates or any of their respective officers, Directors, shareholders, owners, employees, or agents for any damages, liability, or causes of action relating to this solicitation process or the marketing or sale of the Property.

This Offering Memorandum shall not be deemed to represent the state of affairs of the Property or constitute an indication that there has been no change in the state of affairs of the Property since the date this Offering Memorandum.

Confidentiality Agreement

OFFERING MEMORANDUM | COLLIERS INTERNATIONAL : TENNOVA HEALTHCARE : P. 3

Table of ContentsExecutive Summary ......................................................................... 4Property Overview ........................................................................... 5Siteplan .............................................................................................. 6Solar Energy ........................................................................................... 7Property Images ................................................................................ 8 Regional Location .............................................................................. 9 Property Aerial .................................................................................. 10Area Employers ................................................................................. 11Jackson Overview ............................................................................. 12Demographics .................................................................................... 13Tenant Profiles .................................................................................. 14Financials .......................................................................................... 15


EXECUTIVE OVERVIEWColliers International is the exclusive sale advisor for the Tennova Building in Jackson, TN. The 41,000-square foot office building was developed in

2012 and is home to four premier office tenants representing companies in healthcare, logistics, and social services industries. The property is

located on the high-growth east side of Jackson in the Park Place Development near Interstate 40 and several exciting new retail projects. The

Tennova building is Leed Silver Certified and is currently 90% occupied.

EXECUTIVE SUMMARY

• Net Leased Office Building

• 5 year old construction

• Leed Silver Certified

• Excellent condition

• Strong tenancy

• High growth corridor

Investor HighlightsInvestment Overview

Price $6,600,000

Cap Rate 7.35%

NOI $483,596

Occupancy 90.2%

Address 257 Bancorpsouth, Jackson, TN 38305

Land Area 4.34 acres

Year Built 2012

Parking 215

Zoning SC-1, Planned Unit Development


PROPERTY OVERVIEWProperty Name Tennova Office Building

Address 257 Bancorpsouth Parkway, Jackson, TN 38305

Site Acreage 4.34 acres

GLA 41,787

Flood Zone Not within a 100-year flood plain

Parking Spaces 215

Number of Buildings 1

Number of Floors 1

Year Built 2012

Number of Units 4

Signage Internally illuminated monument sign

Zoning SC - 1, Planned Unit Development

Access Three curb cuts provide access along the eastern property boundary

Superstructure Silver LEED Certification - steel frame construction

Foundation Type Slab

Exterior Facade Masonry walls

Roof Standing seam metal roof with 15-year warranty

Fire Sprinklers fully sprinkled

Interior

Combination of private offices, open workspace areas, break rooms, conference rooms, restrooms and storage areas. Commercial grade carpet, vinyl and ceramic tile floor coverings, sheetrock walls and a drop acoustical ceiling with recessed fluorescent lighting. Ceiling height is 10 feet. Doors are solid wood with metal framing.

Mechanical There is a $360,000 roof mounted solar panel system providing 72KW of renewable power that is designed to provide approximately $22,000 in revenue annually.

PROPERTY OVERVIEW


NOT APART

BANCORPSOUTH PARKWAY

EAST

PARK

SQUARE

Occupied Vacant

TENANT SQUARE FOOTAGETennova 23,984TNCSA 8,000BCBS 1,818CH Robinson 3,902Vacant 4,083TOTAL 41,787

SITEPLAN

PROPERTY OVERVIEW

OFFERING MEMORANDUM | COLLIERS INTERNATIONAL : TENNOVA HEALTHCARE : P. 7PROPERTY OVERVIEW

L E E D S I L V E R C E R T I F I E D SOLAR RENEWABLE ENERGY SYSTEM

One of the primary design elements for this project includes a 19.2 KW photovoltaic array solar renewable energy system. This system will

produce from an economic stand point approximately 74% of the total power consumed, while generating a significant per year savings in utility

cost. This is a cutting edge program. The program is designed to reduce the cost of electrical power by selling power to TVA. This is

accomplished by entering into a 10-year contract with TVA beginning January 1, 2012. Tennova receives the full benefit of the solar revenue

generated on a monthly basis for the term of the TVA contract. The contract is managed by JEA and payments are made to the landlord each

month. The landlord makes payments to Tennova.


PROPERTY OVERVIEW

PROPERTY IMAGES


REGIONAL LOCATION

TENNOVA HEALTHCARE

DOWNTOWN

UNION UNIV.

PROPERTY OVERVIEW

TENNOVA HEALTHCARE


PROPERTY AERIAL

TENNOVA HEALTHCARE

THE BALLPARK AT JACKSON

WEST TN HEALTHCARE SPORTSPLEX

HOLIDAY INN EXPRESS

SONIC + MCDONALDS

TACO BELL

INTERSTATE 40

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Interstate I-40 Traffic Count: 43K

PROPERTY OVERVIEW

SHELL

FOOD GIANT HIBBETT SPORTSFACTORY CONNECTORDOLLAR TREE

KENWORTH

TOYOTA BOSHUKU TN

CARLOCK PRESTIGE CAR DEALERSHIP

SKY ZONE

Home of the Jackson GeneralsThe Double-A team is an affiliate of the Arizona Diamondbacks


Crocke

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nty N Highland Ave

N Parkway E

Ridgecrest Ext.

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Airways Blvd

S High

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Ashport Rd

1

1918

21

17 20

23

4

5

6

7

8

9

10

11

12

16

15

14

13

Jackson City LimitsDelta Faucet - 880 Employees

Liberty High School - 1,100 Students, 95 Staff, 82 Teachers

ARJ Mfg. - 180 Employees

UGN Mfg. - 317 Employees

Carlstar Group - 455 Employees

Bluescope Buildings - 164 Employees

Mighty Auto - 67 Employees

Proctor & Gamble - 824 Employees

Pinnacle Foods - 450 Employees

TBDN Tennessee Company - 410 Employees

Jackson State Community College - 4,689 Students, Staff 140, Faculty 93

Grainger - 11 Employees

Dement Asphalt - 4 Employees

TEC Environmental Labs - 11 Employees

Fugitt Rubber - 9 Employees

Cinema Planet 10 - 22 Employees

Kenworth - 12 Employees

Comfort Inn - 20 Employees

Pilot/Denny’s - 25 Employees

Speedway Travel - 15 Employees

PARKPLACE - 836 Employees

Area EmployersThe area surrounding Park Place Development is a regional center for employment. Many of WestTennessee’s major employers are located within a five-minute drive of the I-40/F.E. Wright interchange.

PARKPLACEI-40 at Exit 85Jackson, Tennessee

121

34

67

5

8910111213

1415161718192021

Affordable Dentures - 20 EmployeesATC Fitness - 15 EmployeesBest Western Plus - 25 Employees (Opening Sept 2018)Blue Cross Blue Shield - 12 EmployeesBurger King - 30 Employees (Opening Nov 2017)Carlock Power Sports - 20 EmployeesCH Robinson - 35 EmployeesDollar Tree - 10 EmployeesE-Gamers - 5 EmployeesFactory Connection - 10 EmployeesFBI Regional Office - 35 EmployeesFood Giant - 40 EmployeesGAT Investment Co - 5 EmployeesHappy Nails - 10 EmployeesHibbett Sports - 5 EmployeesHoliday Inn Express - 25 EmployeesHorizon Travel - 10 EmployeesJacks - 30 EmployeesJackson Generals - 50 EmployeesJett’s Pizza - 7 EmployeesJiang Jun Restaurant - 12 EmployeesLa Quinta - 25 Employees (Opening April 2018)Lenny’s - 5 EmployeesLos Portales - 20 EmployeesManpower - 22 EmployeesMcDonald’s - 50 EmployeesNed White Chiropractor - 6 EmployeesPersonal Finance Company - 5 Employees

Total Employees 5,122

Total Students 5,789

Premier Dental - 10 EmployeesRandstad - 5 EmployeesReggie’s - 8 EmployeesSign of the Dove Church - 5 EmployeesSky Zone - 25 EmployeesSonic - 12 EmployeesSparky’s - 39 EmployeesSports Plex - 20 EmployeesSpringHill Suites - 25 Employees (Opening Oct 2018)Subway - 8 EmployeesTaco Bell - 15 EmployeesTennova- 50 EmployeesTN National Guard - 5 EmployeesTNCSA - 50 EmployeesWaffle House - 15 Employees (Opening Dec 2017)

Ben Truex2574 Christmasville Cv, Suite H

Jackson, TN 38308C | 731.616.5366

gatinvest.com

PROPERTY OVERVIEW


Situated on Interstate 40, Jackson is within a day’s drive of 75% of the nation’s major

markets and is the retail epicenter for a 17-county trade area serving a population of more

than 500,000 people. This is a direct result of its accessibility via all forms of conventional

transportation. Six major highways intersect in Jackson, connecting the region to the

nation with four lane access in every direction. I40 has 10 interchanges in Jackson.

Jackson is a geographic hub, strategically located in the center of West Tennessee. As

the retail, medical, legal, educational, cultural and employment center of the region,

Jackson offers the best of major metro amenities while retaining its community flair.

Jackson’s McKelllar-Sipes Regional Airport (MKL) has daily commercial flights to St.

Louis Lambert International Airport via Air Choice One. With its 6,006-foot runway, the

airport can readily handle corporate jets.

The region is unrivaled in its supply of high-quality workers with a dedication and work

ethic to match. With wage rates well below the national average, a manufacturing union

membership of less than one percent, and Tennessee’s status as a right to work state,

Jackson has the type of workforce that new and expanding industries need. Jackson

boasts a labor region population of more than 300,000 people. The workforce is drawn

from a nine-county region and is fueled by seven colleges and universities and a state

technology center in Jackson, plus more in the region. Employers give the workforce high

ratings for work ethic and productivity.

Jackson offers a diversified economic base in an excellent location which continues to

maintain a strong appeal to a wide range of industries, including retail and restaurant

activity. Its attractiveness as a business locale and as a place to live should ensure its

growth well into the twenty-first century.

JACKSON, TN

AREA OVERVIEW

OFFERING MEMORANDUM | COLLIERS INTERNATIONAL : TENNOVA HEALTHCARE : P. 13AREA OVERVIEW

TENNOVA DEMOGRAPHICS

3 MILE RADIUS 5 MILE RADIUS 10 MILE RADIUS 20 MILE RADIUS

2016 Estimated Population 14,112 56,325 92,815 156,193

2021 Projected Population 13,599 55,098 90,325 153,039

2010 Census Population 14,493 56,841 93,307 156,507

2000 Census Population 11,937 53,399 84,750 145,274

2016 Households 5,749 22,911 37,336 62,537

2021 Projected Households 5,964 24,089 39,031 65,139

2010 Census Households 5,638 22,108 35,950 60,436

2000 Census Households 4,547 20,943 32,883 56,373

2016 Average Household Income $63,034 $56,779 $62,990 $59,922

20201Average Household Income $71,040 $64,326 $71,994 $68,175

2016 Median Household Income $51,930 $41,811 $49,124 $46,490

2021 Median Household Income $57,392 $45,822 $53,991 $51,086

2016 Households by Income$200,000+ 3.0% 2.7% 3.6% 3.0%

$150,000 - $199,999 1.8% 1.7% 2.9% 2.6%

$125,000 - $149,999 4.4% 2.5% 3.2% 3.2%

$100,000 - $124,999 8.7% 5.8% 6.9% 6.0%

$75,000 - $99,999 12.8% 11.0% 12.1% 11.4%

$50,000 - $74,999 18.9% 16.2% 16.3% 17.3%

$35,000 - $49,999 14.1% 14.3% 14.0% 15.2%

$25,000 - $34,999 14.2% 12.1% 12.2% 11.9%

$15,000 - $24,999 9.6% 12.9% 11.1% 12.2%

$10,000 - $14,999 5.5% 8.7% 7.4% 7.0%

<$10,000 7.0% 12.0% 10.3% 10.0%

Daytime DemographicsTotal Businesses 529 3,932 5,659 7,687

Total Employees 7,858 55,148 74,973 93,942

JACKSON, TN


TENANT HIGHLIGHTS

Jackson TN, Hospital Company, LLC :Tennova is one of the state’s largest health networks and one of Tennessee’s

largest employers with more than 4,000 employees dedicated to providing

compassionate care using the latest medical technology. There are three

convenient locations in West Tennessee, offering a full range of medical

services and procedures to patients in the region as well as middle and east

Tennessee. Tennova is committed to serving the health of the communities

they serve by providing quality, personalized care for their patients.

Tennessee Community Services Agency :Tennessee Community Services Agency (TNCSA) is a public agency

created by the General Assembly of Tennessee with a broad mission of

serving Tennesseans in need.

A community based Board of Directors appointed by the Governor guides

the agency and the work in Tennessee’s communities. TNCSA knows

Tennessee’s local resources and needs. They respond quickly to fill social

service needs as they arise in ways other agencies cannot. They coordinate

and deliver services to individuals, families and communities through

contracts with state, federal and local agencies.

Since 1989 the agency has provided services ranging from providing

prevention services, housing and necessities to those affected by natural

disasters. Programs include: DCS monitoring and advocacy, DCS resource

parent advocacy and mentoring program, juvenile drug courts, adult

probation, senior community service employment program. Family services

counseling, at-home support services, and housing crisis hotlines.

C.H. Robinson : Founded in 1905, C.H. Robinson is one of the world’s largest third party

logistics providers, with 2015 gross revenues of $13.5 billion. They provide

freight transportation and logistics, outsource solutions, produce sourcing,

and information services to 110,000 customers through a network of offices

in North America, South America, Europe, and Asia. They provide access to

68,000 transportation providers worldwide, including contract motor

carriers, railroads, air freight carriers, and ocean carriers. With 13,159

employees, the company has built a strong reputation as an industry leader.

The company’s stock is traded on Nasdaq under symbol CHRW

Blue Cross Blue Shield of Tennessee : Blue Cross Blue Shield is Tennessee’s largest health benefit plan

company, which is a not-for-profit organization founded in 1945. Today,

they serve more than 3.3 million people. They employ more than 5,400

people at the headquarters in Chattanooga and our regional offices in

Jackson, Knoxville, Memphis, Nashville and North east Tennessee. The

company provides benefits to about 12,000 companies. More than 82.2

million claims and over $11.6 billion in benefits are paid annually.

TENANT OVERVIEW

OFFERING MEMORANDUM | COLLIERS INTERNATIONAL : TENNOVA HEALTHCARE : P. 15FINANCIALS

PRO FORMAPer S.F. Annual

IncomeMinimum Rent $12.34 $515,518Total Rental Revenue 12.34 515,518Recoveries 1.98 82,546Total Gross Income 14.31 598,064Vacancy Loss (0%) 0.00 0Effective Gross Income 14.31 598,064

ExpensesCAM (0.44) (18,193)Real Estate Taxes (1.44) (60,192)Insurance (0.27) (11,284)Management Fee (4% of Min. Rent) (0.49) (20,621)Total Expenses (2.64) (110,289)

Net Operating Income 11.67 487,774Capital Reserves ($0.10 PSF) (0.10) (4,179)

NOI After Reserves $11.57 $483,596

YEAR ONE PRO FORMA


RENT ROLLRENT ROLL as of 7/1/17

Lease Dates Minimum Rent Recoveries TotalTenant Suite GLA Start End Annual Monthly PSF % Increase CAM RET Insurance Annual Total PSF Revenue

[1] Jackson, Tennesse Hospital Company LLC 23,984 9/1/12 9/1/23 $323,784 $26,982 $13.50 $1.50 PSF on 9/1/18 $11,486 $34,548 $6,476 $52,510 $2.19 $376,294[2] Tennessee Community Service Agency 8,000 6/24/13 6/24/23 $100,480 $8,373 $12.56 $1.00 PSF on 6/24/18 $3,830 $11,521 $2,160 $17,511 $2.19 $117,991[3] CH Robinson Worldwide Inc. 3,902 10/1/14 10/1/19 $58,530 $4,878 $15.00 Flat $1,869 $5,622 $1,054 $8,545 $2.19 $67,075[4] BlueCross BlueShield of Tennessee, Inc. 1,818 2/16/15 2/16/20 $32,724 $2,727 $18.00 Flat $871 $2,618 $491 $3,980 $2.19 $36,704

VACANT 4,083 1/1/15 12/1/15 $0 $0 $0.00 $0 $0 $0 $0 $0.00 $0Sub-Total 41,787 $515,518 $42,960 $12.34 $18,056 $54,309 $10,181 $82,546 $1.98 $598,064

Totals Owned 41,787 100.0% $515,518 $42,960 $12.34 $18,056 $54,309 $10,181 $82,546 598,064Occupied 37,704 90.2%Vacant 4,083 9.8%

Footnotes:[1][2][3][4][5]

Recoveries

Tenant has 3 - 5 year options at FMV with 180 days notice. Tenant has 2 - 5 year options at $14.56 and $15.56 PSF respectively with 180 days notice.Tenant has 2 - 5 year options at $16.50 and $17.50 PSF respectively with 180 days notice. 5% cumulative compounding cap on CAM (ex. utilities, insurance and snow removal).Tenant has 2 - 5 year options at $19.50 and $21.00 PSF respectively with 180 days notice. 5% cumulative compounding cap on CAM (ex. utilities, insurance and snow removal).CAM Reimbursments are equal to tenant's natural pro rata share of CAM plus 10% admin fee.

FINANCIALS

OFFERING MEMORANDUM | COLLIERS INTERNATIONAL : TENNOVA HEALTHCARE : P. 17FINANCIALS

HISTORICAL OPERATING STATEMENT2015 2016 2017Actual Actual Pro Forma

Potential Gross RevenueBase Rental Revenue $511,428 $515,518 $515,518JEA Solar Income 20,000 20,000 20,000Scheduled Base Rental Revenue 531,428 535,518 535,518

Expense Reimbursement RevenueCAM 24,220 24,504 18,056Real Estate Taxes 52,160 52,558 54,309Insurance 12,317 12,396 10,181Reconcilation to Tenants/Vacant (16,972) (17,768) 0

Total Reimbursement Revenue 71,725 71,690 82,546Total Potential Gross Revenue 603,152 607,208 618,064

[1] Vacancy Loss (%) 0 0 0Effective Gross Revenue 603,152 607,208 618,064

Operating ExpensesCAM 15,507 18,193 18,193JEA Solar Reimbursement to Tennova 17,232 19,542 20,000Real Estate Taxes 60,192 60,192 60,192Insurance 8,883 10,300 11,284

[2] Management Fee (4% of Min. Rent) 20,457 20,621 20,621Total Operating Expenses 122,271 128,848 130,289

Net Operating Income $480,881 $478,360 $487,774

[1][2][3] 2017 Pro Forma expenses are equal to 2017 Budget.

HISTORICAL OPERATING STATEMENT

Property has historically charged a 4% Management fee on base rental revenue only. Analysis assumes 0% Vacancy Loss for Pro Forma as 10% of the property is Vacant.


Colliers International523 3rd Avenue South, Nashville, TN 37210MAIN 615 850 2700 FAX 615 244 2957colliers.com

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Confidentiality Agreement - Microsoft