NEW ALBANY MEDICAL OFFICE BUILDING | NEW ALBANY | … › d2 › If0-ZEAw... · Marcus & Millichap is pleased to present the New Albany MOB. The project is located in the Louisville,

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of 2015 Marcus & Millichap. All rights reserved. 1

NEW ALBANY MEDICAL OFFICE BUILDING | NEW ALBANY | INDIANA | OFFERING MEMORANDUM

NON-ENDORSEMENT NOTICE:

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation’s logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONTACT THE MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

Confidentiality Agreement

PROPERTY DESCRIPT ION PROPERTY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . 5 MAPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7 AERIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

F INANCIAL ANALYSIS F INANCIAL OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . 11 RENT ROLL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 ARGUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-15 TENANT SUMMARIES . . . . . . . . . . . . . . . . . . . . . . 16-17 RECENT SALES COMPARABLES MAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 COMPARABLES . . . . . . . . . . . . . . . . . . . . . . . . . 21-22

LEASE COMPARABLES MAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 COMPARABLES . . . . . . . . . . . . . . . . . . . . . . . . . . 25-27

DEMOGRAPHIC ANALYSIS DEMOGRAPHIC ANALYSIS . . . . . . . . . . . . . . . . . . . . 29 DEMOGRAPHIC REPORT . . . . . . . . . . . . . . . . . . . . . 30 DEMOGRAPHIC MAPS . . . . . . . . . . . . . . . . . . . . . . . 31

MARKET OVERVIEW LOUISV ILLE, KENTUCKY . . . . . . . . . . . . . . . . . . . . 33-39

| T A B L E O F C O N T E N T S |

New AlbANy MedicAl Office buildiNg

PROPERTY DESCRIPTION



Marcus & Millichap is pleased to present the New Albany MOB. The project is located in the Louisville, KY MSA at 2125 State Street in New Albany, IN.

The New Albany MOB is a 59,587 SF, multi-tenant medical office building situated near the Floyd Memorial Hospital campus. Located 0.3 miles from the 329-bed Floyd Memorial Hospital (BBB- Credit), the subject property is a testament to the growing demand for medical services in the local area. Floyd Memorial occupies 60% of the current rentable space and would like to further expand their operations at the property. Floyd Memorial Hospital is currently under contract to be acquired by the A- credit rated Baptist Health. The project is currently 95% leased to 3 tenants offering an investor the opportunity to own a stabilized and majority credit leased MOB.

The building’s excellent access to the I-265, coupled with its close proximity to the Floyd Memorial Hospital, provides ideal positioning and convenient services.

INVESTMENT SUMMARY

• 59,587 SF Multi-Tenant MOB (95% Leased)

• 0.3 Miles from 329-Bed Floyd Memorial Hospital (BBB- Credit)

• Floyd Memorial Leases 60% of the Space & Would Like to

Expand Offering Upside Potential

• $190/SF - Well Below Replacement Cost

• Sub 7-Percent Market Vacancy Within a 5-Mile Radius

INVESTMENT HIGHLIGHTS

Address 2125 State StreetNew Albany, IN 47150

Property Type Medical OfficeAssessor’s Parcel Number 22-05-02-700-383.000-008Gross Leasable Area (GLA) 59,587 SFLot Size 7.28 ACYear Built 1996Type of Ownership Fee SimpleFloor Area Ratio (FAR) 0.19Parking Ratio 4.17:1,000 SFConstruction Type MasonryNumber of Floors 1Parking Surface 300 Free Surface Spaces



PROPERTY DESCRIPTIONLOCAL MAP


PROPERTY DESCRIPTIONREGIONAL MAP


PROPERTY DESCRIPTIONAERIAL MAP

FINANCIAL ANALYSIS



FINANCIAL OVERVIEWPrice $11,350,000Down Payment 35% / $3,972,000Rentable Square Feet 59,587 SFPrice/Rentable SF $190.48CAP Rate - Current 7.00%Parcel Size 7.28 ACYear Built 1996Type of Ownership Fee Simple

FINANCING Loan Amount $7,377,500Loan Type Proposed NewInterest Rate 4.5%Amortization 30 YearsLoan information is time sensitive and subject to change. Contact your local Marcus & Millicap Capital Corporation representative.

Occupied Space $841,008Available Space at Market Rents $46,886 Gross Potential Rent $887,894Expense Reimbursements $241,117Other Income $2,160Gross Potential Income $1,131,171Vacancy/Collection Allowance 5.3% / $46,886Effective Gross Income $1,084,285Total Expenses $289,671Net Operating Income $794,614Debt Service $448,569Debt Coverage Ratio 1.77Net Cash Flow After Debt Service 8.71% / $346,045Principal Reduction $103,309Total Return 11.31% / $449,354

ANNUALIZED OPERATING DATA

Current Per SFReal Estate Taxes (1) $128,200 $2.15 Insurance $10,500 $0.18Utilities $55,000 $0.92Repairs & Maintenance $39,000 $0.65Management Fee (2) (% of EGI) $43,371 $0.73HVAC $3,700 $0.06Janitorial $4,400 $0.07Other $3,300 $0.06Security $2,200 $0.04TOTAL EXPENSES $289,671 $4.86

EXPENSES

(1) RE Taxes - The full tax amount is shown. Taxes are currently abated for all the tenants in the building.(2) Management Fee - Projected at 4 percent EGI.*Based on 2014 expenses. All tenants pay Janitorial expenses directly for their suites. Region 10 additionally pays Utilities and Trash expenses directly. The property shares a dumpster with the hospital.

FINANCIAL ANALYSIS


RENT ROLL

Suite # Tenant SF % of Total SF

Lease Commencement

Lease Expiration

Annual Rent Rent/SF Changes

On Changes To Lease Type Other Terms

1 Floyd Memorial Weight Management 2,631 4.42% 9/8/2008 9/30/2018 $38,445 $14.61 None None NNN None

2 (1) New Horizons Physical Therapy 2,302 3.86% 12/1/2005 11/30/2017* $35,087 $15.24 12/1/2016 $2,971/Mo. NNN See

Comments

3Floyd Memorial Medical Group

Surgery8,272 13.88% 1/17/2011 1/31/2021 $105,505 $12.75 None None NNN None

5 (2) Floyd Memorial Hospital 7,129 11.96% 1/1/2016 6/30/2026 $149,715 $21.00 7/2021 $13,723/Mo. NNN See

Comments

6 (3) Floyd Memorial Hospital 12,478 20.94% 8/1/2016 1/31/2022 $212,126 $17.00 None None NNN None

15 (4) Floyd Memorial Hospital 5,060 8.49% 1/1/2016 6/30/2026 $86,020 $17.00 7/2021 $7,885/Mo. NNN See

Comments

16 (5) Region 10 Workforce Board Inc. 18,957 31.81% 1/5/2011 1/5/2021 $214,110 $11.29 None None MG None

17 VACANT 2,758 4.63% - - - - - - - -TOTAL AVAILABLE 2,758 5%TOTAL OCCUPIED 56,829 95% $841,008

(1) M&M analysis assumed that this tenant will exercise their remaining 1 year option on 12/1/2016 @ $2,971.67/Mo. Please note that Floyd Memorial Hospital will occupy this suite when the current tenant moves out. Floyd Memorial has signed a lease for this space through 5/31/2028 (all firm term). The lease has a build-out term (6 months max) at $9.00/SF NNN. Full rental payments will commence after the build-out at $17.00/SF NNN. In Years 6-10 of the lease, the rental rate will increase to $18.70/SF NNN.

(2) Please Note that the new tenant will be Floyd Memorial Hospital on a 10.5 Year NNN Lease (all firm term), paying $9.00/SF NNN during their build-out term (6 months max) and $21/SF NNN during their full rental term, which will commence on or before 7/1/2016. In Years 6-10 of the lease, the rental rate will increase to $23.10/SF NNN. The M&M analysis reflects the full Floyd Memorial rental amount of $21/SF NNN and any difference in rent in analysis year 1 will be credited to the buyer at COE.

(3)The current tenant Advanced ENT & Allergy will occupy this suite until 7/31/2016. Please note that the new tenant thereafter will be Floyd Memorial Hospital on a 10.5 Year NNN Lease (5 Years Firm Term). Floyd Memorial will pay $8.50/SF NNN during their build-out term (6 months max) starting on 8/1/2016. Full rental payments will commence on or before 2/1/2017 at $17.00/SF NNN. In Years 6-10, if the tenant does not vacate, the rental rate will increase to $18.70/SF NNN. The M&M analysis reflects the full Floyd Memorial rental amount and reimbursements of $17.00/SF NNN and any difference in rent/reimbursements in analysis year 1 will be credited to the buyer at COE.

(4) Please Note that the new tenant will be Floyd Memorial Hospital on a 10.5 Year NNN Lease (all firm term), paying $9.00/SF NNN during their build-out term (6 months max) and $17.00/SF NNN during their full rental term, which will commence on or before 7/1/2016. In Years 6-10 of the lease, the rental rate will increase to $18.70/SF NNN. The M&M analysis reflects the full Floyd Memorial rental amount of $17.00/SF NNN and anydifference in rent in analysis year 1 will be credited to the buyer at COE.

(5) This tenant reimburses taxes (tax-exempt). This tenant’s revenue is derived from grants and contracts with the State of Indiana. As is customary with government sponsored entities, the tenant has the right to cancel their lease if the State terminates or significantly reduces the tenant’s grants/contracts.

FINANCIAL ANALYSIS

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of 2015 Marcus & Millichap. All rights reserved. ACT ID W0090987 13

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11For the Years Ending Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023 Mar-2024 Mar-2025 Mar-2026 Mar-2027

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Potential Gross Revenue Base Rental Revenue $887,894 $884,658 $894,317 $901,659 $945,349 $1,115,319 $1,150,756 $1,156,591 $1,160,844 $1,170,333 $1,239,461 Absorption & Turnover Vacancy ($46,886) ($3,916) ($42,579) ($20,000) ($4,531) ($4,431) ($48,174) ($44,732)

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Scheduled Base Rental Revenue $841,008 $884,658 $890,401 $901,659 $902,770 $1,095,319 $1,146,225 $1,152,160 $1,160,844 $1,122,159 $1,194,729

Expense Reimbursement Revenue RE Taxes $122,267 $131,404 $134,194 $138,058 $136,121 $142,516 $148,099 $151,829 $156,199 $154,007 $158,447 Insurance $6,675 $7,339 $7,481 $7,710 $8,384 $11,672 $12,130 $12,436 $12,793 $12,615 $12,976 Utilites $46,886 $51,558 $52,107 $53,052 $56,081 $68,235 $64,727 $66,355 $68,239 $67,554 $64,864 R&M $24,788 $27,258 $27,787 $28,637 $31,139 $43,355 $45,054 $46,189 $47,518 $46,851 $48,201 Mgmt Fee $27,566 $29,759 $29,963 $30,495 $33,791 $54,494 $56,851 $57,384 $58,113 $56,027 $59,020 HVAC $2,352 $2,586 $2,636 $2,716 $2,955 $4,114 $4,274 $4,382 $4,508 $4,446 $4,573 Janitorial $4,101 $4,509 $4,559 $4,640 $4,906 $5,969 $5,660 $5,804 $5,971 $5,908 $5,674 Other $2,097 $2,307 $2,350 $2,422 $2,636 $3,669 $3,812 $3,909 $4,020 $3,964 $4,079 Security $1,398 $1,537 $1,568 $1,616 $1,757 $2,446 $2,542 $2,606 $2,681 $2,642 $2,719 Stormwater $2,987 $3,285 $3,349 $3,452 $3,752 $5,225 $5,430 $5,566 $5,726 $5,646 $5,808

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Total Reimbursement Revenue $241,117 $261,542 $265,994 $272,798 $281,522 $341,695 $348,579 $356,460 $365,768 $359,660 $366,361

LED Sign Income $2,160 $2,214 $2,269 $2,326 $2,384 $2,444 $2,505 $2,568 $2,632 $2,698 $2,765 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________

Total Potential Gross Revenue $1,084,285 $1,148,414 $1,158,664 $1,176,783 $1,186,676 $1,439,458 $1,497,309 $1,511,188 $1,529,244 $1,484,517 $1,563,855 General Vacancy ($57,310) ($54,100) ($58,723) ($18,765) ($52,851) ($70,436) ($71,222) ($76,331) ($28,326) ($35,559)

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Effective Gross Revenue $1,084,285 $1,091,104 $1,104,564 $1,118,060 $1,167,911 $1,386,607 $1,426,873 $1,439,966 $1,452,913 $1,456,191 $1,528,296

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Operating Expenses RE Taxes $128,200 $131,405 $134,690 $138,057 $141,509 $145,047 $148,673 $152,390 $156,199 $160,104 $164,107 Insurance $10,500 $10,762 $11,032 $11,307 $11,590 $11,880 $12,177 $12,481 $12,793 $13,113 $13,441 Utilites $50,300 $51,557 $52,846 $54,168 $55,522 $56,910 $58,333 $59,791 $61,286 $62,818 $64,388 R&M $39,000 $39,975 $40,974 $41,999 $43,049 $44,125 $45,228 $46,359 $47,518 $48,706 $49,923 Mgmt Fee $43,371 $43,644 $44,183 $44,722 $46,716 $55,464 $57,075 $57,599 $58,117 $58,248 $61,132 HVAC $3,700 $3,792 $3,887 $3,984 $4,084 $4,186 $4,291 $4,398 $4,508 $4,621 $4,736 Janitorial $4,400 $4,510 $4,623 $4,738 $4,857 $4,978 $5,103 $5,230 $5,361 $5,495 $5,632 Other $3,300 $3,383 $3,467 $3,554 $3,643 $3,734 $3,827 $3,923 $4,021 $4,121 $4,224 Security $2,200 $2,255 $2,311 $2,369 $2,428 $2,489 $2,551 $2,615 $2,680 $2,747 $2,816 Stormwater $4,700 $4,817 $4,938 $5,061 $5,188 $5,318 $5,451 $5,587 $5,726 $5,870 $6,016

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Total Operating Expenses $289,671 $296,100 $302,951 $309,959 $318,586 $334,131 $342,709 $350,373 $358,209 $365,843 $376,415

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Net Operating Income $794,614 $795,004 $801,613 $808,101 $849,325 $1,052,476 $1,084,164 $1,089,593 $1,094,704 $1,090,348 $1,151,881

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Debt Service Interest Payments $329,553 $324,085 $318,366 $312,385 $306,129 $299,585 $292,741 $285,582 $278,094 $270,263 Principal Payments $119,016 $124,483 $130,202 $136,184 $142,440 $148,983 $155,828 $162,986 $170,474 $178,306

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Total Debt Service $448,569 $448,568 $448,568 $448,569 $448,569 $448,568 $448,569 $448,568 $448,568 $448,569

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Leasing & Capital Costs Tenant Improvements $24,325 $264,491 $124,236 $28,146 $27,521 $208,337 $230,488 Leasing Commissions $5,639 $61,314 $28,800 $6,525 $6,380 $48,296 $53,431

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Total Leasing & Capital Costs $29,964 $325,805 $153,036 $34,671 $33,901 $256,633 $283,919

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Cash Flow After Debt Service $346,045 $346,436 $323,081 $359,532 $74,951 $450,872 $600,924 $607,124 $646,136 $385,146 $867,962But Before Taxes =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== ===========

Revenue/Expense Notes RE Taxes The full tax amount is shown. Taxes are currently abated for all the tenants in the building.

Schedule Of Prospective Cash FlowIn Inflated Dollars for the Fiscal Year Beginning 04/01/2016

ARGUS

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of 2015 Marcus & Millichap. All rights reserved. ACT ID W0090987 14

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11For the Years Ending Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023 Mar-2024 Mar-2025 Mar-2026 Mar-2027

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Potential Gross Revenue Base Rental Revenue $887,894 $884,658 $894,317 $901,659 $945,349 $1,115,319 $1,150,756 $1,156,591 $1,160,844 $1,170,333 $1,239,461 Absorption & Turnover Vacancy ($46,886) ($3,916) ($42,579) ($20,000) ($4,531) ($4,431) ($48,174) ($44,732)

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Scheduled Base Rental Revenue $841,008 $884,658 $890,401 $901,659 $902,770 $1,095,319 $1,146,225 $1,152,160 $1,160,844 $1,122,159 $1,194,729

Expense Reimbursement Revenue RE Taxes $122,267 $131,404 $134,194 $138,058 $136,121 $142,516 $148,099 $151,829 $156,199 $154,007 $158,447 Insurance $6,675 $7,339 $7,481 $7,710 $8,384 $11,672 $12,130 $12,436 $12,793 $12,615 $12,976 Utilites $46,886 $51,558 $52,107 $53,052 $56,081 $68,235 $64,727 $66,355 $68,239 $67,554 $64,864 R&M $24,788 $27,258 $27,787 $28,637 $31,139 $43,355 $45,054 $46,189 $47,518 $46,851 $48,201 Mgmt Fee $27,566 $29,759 $29,963 $30,495 $33,791 $54,494 $56,851 $57,384 $58,113 $56,027 $59,020 HVAC $2,352 $2,586 $2,636 $2,716 $2,955 $4,114 $4,274 $4,382 $4,508 $4,446 $4,573 Janitorial $4,101 $4,509 $4,559 $4,640 $4,906 $5,969 $5,660 $5,804 $5,971 $5,908 $5,674 Other $2,097 $2,307 $2,350 $2,422 $2,636 $3,669 $3,812 $3,909 $4,020 $3,964 $4,079 Security $1,398 $1,537 $1,568 $1,616 $1,757 $2,446 $2,542 $2,606 $2,681 $2,642 $2,719 Stormwater $2,987 $3,285 $3,349 $3,452 $3,752 $5,225 $5,430 $5,566 $5,726 $5,646 $5,808

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Total Reimbursement Revenue $241,117 $261,542 $265,994 $272,798 $281,522 $341,695 $348,579 $356,460 $365,768 $359,660 $366,361

LED Sign Income $2,160 $2,214 $2,269 $2,326 $2,384 $2,444 $2,505 $2,568 $2,632 $2,698 $2,765 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________

Total Potential Gross Revenue $1,084,285 $1,148,414 $1,158,664 $1,176,783 $1,186,676 $1,439,458 $1,497,309 $1,511,188 $1,529,244 $1,484,517 $1,563,855 General Vacancy ($57,310) ($54,100) ($58,723) ($18,765) ($52,851) ($70,436) ($71,222) ($76,331) ($28,326) ($35,559)

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Effective Gross Revenue $1,084,285 $1,091,104 $1,104,564 $1,118,060 $1,167,911 $1,386,607 $1,426,873 $1,439,966 $1,452,913 $1,456,191 $1,528,296

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Operating Expenses RE Taxes $128,200 $131,405 $134,690 $138,057 $141,509 $145,047 $148,673 $152,390 $156,199 $160,104 $164,107 Insurance $10,500 $10,762 $11,032 $11,307 $11,590 $11,880 $12,177 $12,481 $12,793 $13,113 $13,441 Utilites $50,300 $51,557 $52,846 $54,168 $55,522 $56,910 $58,333 $59,791 $61,286 $62,818 $64,388 R&M $39,000 $39,975 $40,974 $41,999 $43,049 $44,125 $45,228 $46,359 $47,518 $48,706 $49,923 Mgmt Fee $43,371 $43,644 $44,183 $44,722 $46,716 $55,464 $57,075 $57,599 $58,117 $58,248 $61,132 HVAC $3,700 $3,792 $3,887 $3,984 $4,084 $4,186 $4,291 $4,398 $4,508 $4,621 $4,736 Janitorial $4,400 $4,510 $4,623 $4,738 $4,857 $4,978 $5,103 $5,230 $5,361 $5,495 $5,632 Other $3,300 $3,383 $3,467 $3,554 $3,643 $3,734 $3,827 $3,923 $4,021 $4,121 $4,224 Security $2,200 $2,255 $2,311 $2,369 $2,428 $2,489 $2,551 $2,615 $2,680 $2,747 $2,816 Stormwater $4,700 $4,817 $4,938 $5,061 $5,188 $5,318 $5,451 $5,587 $5,726 $5,870 $6,016

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Total Operating Expenses $289,671 $296,100 $302,951 $309,959 $318,586 $334,131 $342,709 $350,373 $358,209 $365,843 $376,415

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Net Operating Income $794,614 $795,004 $801,613 $808,101 $849,325 $1,052,476 $1,084,164 $1,089,593 $1,094,704 $1,090,348 $1,151,881

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Debt Service Interest Payments $329,553 $324,085 $318,366 $312,385 $306,129 $299,585 $292,741 $285,582 $278,094 $270,263 Principal Payments $119,016 $124,483 $130,202 $136,184 $142,440 $148,983 $155,828 $162,986 $170,474 $178,306

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Total Debt Service $448,569 $448,568 $448,568 $448,569 $448,569 $448,568 $448,569 $448,568 $448,568 $448,569

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Leasing & Capital Costs Tenant Improvements $24,325 $264,491 $124,236 $28,146 $27,521 $208,337 $230,488 Leasing Commissions $5,639 $61,314 $28,800 $6,525 $6,380 $48,296 $53,431

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Total Leasing & Capital Costs $29,964 $325,805 $153,036 $34,671 $33,901 $256,633 $283,919

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Cash Flow After Debt Service $346,045 $346,436 $323,081 $359,532 $74,951 $450,872 $600,924 $607,124 $646,136 $385,146 $867,962But Before Taxes =========== =========== =========== =========== =========== =========== =========== =========== =========== =========== ===========

Revenue/Expense Notes RE Taxes The full tax amount is shown. Taxes are currently abated for all the tenants in the building.

Schedule Of Prospective Cash FlowIn Inflated Dollars for the Fiscal Year Beginning 04/01/2016

ARGUS

PROSPECTIVE PROPERTY RESALE

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10For the Years Ending Mar-2017 Mar-2018 Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023 Mar-2024 Mar-2025 Mar-2026 ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Resale Amount Gross Proceeds from Sale $10,600,053 $10,688,173 $10,774,680 $11,324,333 $14,033,013 $14,455,520 $14,527,907 $14,596,053 $14,537,973 $15,358,413 Commissions & Adjustments ($318,002.00) ($320,645.00) ($323,240.00) ($339,730.00) ($420,990.00) ($433,666.00) ($435,837.00) ($437,882.00) ($436,139.00) ($460,752.00)

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Net Proceeds From Sale $10,282,051 $10,367,528 $10,451,440 $10,984,603 $13,612,023 $14,021,854 $14,092,070 $14,158,171 $14,101,834 $14,897,661

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Outstanding Debt Retirement Total Principal Balances ($7,258,484) ($7,134,002) ($7,003,799) ($6,867,615) ($6,725,175) ($6,576,192) ($6,420,363) ($6,257,378) ($6,086,904) ($5,908,598)

___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________Net Resale Proceeds After Debt $3,023,567 $3,233,526 $3,447,641 $4,116,988 $6,886,848 $7,445,662 $7,671,707 $7,900,793 $8,014,930 $8,989,063

=========== =========== =========== =========== =========== =========== =========== =========== =========== ===========

Unleveraged Annual IRR -2.41% 2.73% 4.41% 6.25% 9.86% 9.83% 9.61% 9.44% 9.26% 9.43%Leveraged Annual IRR -15.18% -0.61% 4.31% 9.44% 17.96% 17.47% 16.67% 16.08% 15.51% 15.62%

Prospective Property Resale


FINANCIAL ANALYSISARGUS ASSUMPTIONS

Property TimingStart of Analysis: 4/01/2016End of Analysis: 3/31/2026Analysis Period: 10 YearsMarket Leasing Assumptions (All Tenants)Vacant Suite: Leased-up in Month 13 of the analysis Renewal Probability: 90% Market Rental Rate: $17.00/SF NNN with No Annual IncreasesMonths Vacant (1): 12 MonthsTIs: $25/SF New & $7/SF Renewal LCs: 6% New/2% RenewalLength of Renewal Leases: 5 Years(1) Vacancy Downtime – M&M analysis projected 12 months of blended downtime, which results in 1 actual month of downtime in the analysis

General VacancyGeneral Vacancy: Existing Year 1 & 5% GPI ThereafterTerminal Cap RateTerminal Cap Rate: 7.5%DebtLTV: 65%Term: 10 YearsRate: 4.5%Amortization: 30 Years


TENANT SUMMARY

Tenant Name Floyd Memorial HospitalRentable Square Feet 35,570 SFPro Rata Share of Project 60%Lease Commencement VariesLease Expiration VariesCredit Rating BBB-Headquartered New Albany, INWebsite www.floydmemorial.com

Floyd Memorial Medical Group is a group of primary care physicians, specialty physicians, nurse practitioners and physician assistants who are employed by Floyd Memorial Hospital and Health Services. We offer patients a network of primary care and specialty providers at locations throughout Southern Indiana including Floyd, Clark, Harrison, Scott and Washington counties.

*www.floydmemorial.com

FINANCIAL ANALYSIS


TENANT SUMMARY

Tenant Name Region 10 Workforce Board IncRentable Square Feet 18.957 SFPro Rata Share of Project 32%Lease Commencement 1/5/2011Lease Expiration 1/5/2021Locations 6Headquartered Jeffersonville, INWeb Site www.workoneregion10.com

The WorkOne center is the heart of the workforce development system. It’s where service delivery partners connect with customers, and with each other. WorkOne helps people find a new or better job, choose a career, find a good employee, access training, or get the information needed to succeed in today’s ever-evolving workplace.

*www.workoneregion10.com/about-us.html

FINANCIAL ANALYSIS

RECENT SALES COMPARABLES



1)2)3)4)5)6)

New Albany MOBScripps Medical PlazaThe JeffersonPinnacle OrthopaedicsEmpire Medical Building17 DavisThree Tree Medical Arts Building

RECENT SALESNew Albany MOBNEW ALBANY, IN

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Chicago, Inc. © 2015 Marcus &Millichap. All rights reserved.

RECENT SALES MAPRECENT SALES COM

PARABLES



0.00

40.00

80.00

120.00

160.00

200.00

240.00

280.00

320.00

360.00

400.00

Subject ScrippsMedicalPlaza

TheJefferson

PinnacleOrthopaedics

EmpireMedicalBuilding

17Davis

ThreeTree

MedicalArts

Building

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00


TheJefferson



17Davis

ThreeTree

MedicalArts

Building

Average Price Per Rentable SF

Average Cap Rate



CAP RATE AND PRICE PER RENTABLE SF

0.00

40.00

80.00

120.00

160.00

200.00

240.00

280.00

320.00

360.00

400.00


TheJefferson



17Davis

ThreeTree

MedicalArts

Building

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00


TheJefferson



17Davis

ThreeTree

MedicalArts

Building

Average Price Per Rentable SF

Average Cap Rate



CAP RATE AND PRICE PER RENTABLE SF

AVERAGE CAP RATE

AVERAGE PRICE PER RENTABLE SF



1 480 4th Avenue, Chula Vista, CA 91910

Property Name

Scripps Medical Plaza

Close of Escrow 1/22/2014

Sales Price $17,900,000

Rentable SF 62,449 SF

Price/Rentable SF $286 .63

Year Built/Renovated 1975 / 1999

CAP Rate 6 .97%

Occupancy 100%

Comments: On-Campus MOB . The building is 20% leased to the AA - credit rated Scripps Health .

3 300 Tower Road NE, Marietta, GA 30060

Property Name

Pinnacle Orthopedics





Year Built/Renovated 2004

CAP Rate 6 .59%

Occupancy 100%

Comments: On-Campus MOB . The building is 88% leased to Pinnacle Orthopedics .

2 1600 W 38th Street, Austin, TX 78731

Property Name

The Jefferson






CAP Rate 7 .05%

Occupancy 88%

Comments: Near Campus MOB . The building is 24% leased to the AA credit rated Ascension Health and 14% leased to Austin Radiological Associates (15 Locations) .


4 200 Hospital Drive, Glen Burnie, MD 21061

Property Name

Empire Medical Building






CAP Rate 6 .84%

Occupancy 92%

Comments: On-Campus MOB . The building is 26% leased to Chesapeake Orthopedic & Sports Medicine Center .

6 16259 Sylvester Road SW, Burien, WA 98166

Property Name

Three Tree Medical Arts Building






CAP Rate 7 .05%

Occupancy 100%

Comments: On-Campus MOB . The building is 88% leased to A credit rated Highline Medical Center and it is subject to a ground lease .

5 17 Davis Boulevard, Tampa, FL 33606

Property Name

17 Davis






CAP Rate 7 .00%

Occupancy 93%

Comments: On-Campus MOB . The building is 73% leased to the AA- credit rated USF Health .


LEASE COMPARABLES



1)2)3)4)5)6)

New Albany MOBTrinity PlazaNorthgate Medical CenterThe Cancer Center Of Indiana2630 Grant Line Road618 E Market Street2315 Green Valley Road

LEASE COMPARABLESNew Albany MOBNEW ALBANY, IN


RENT COMPARABLES MAPLEASE COM

PARABLES


Average Occupancy

0

10

20

30

40

50

60

70

80

90

100

Subject TrinityPlaza

NorthgateMedicalCenter

TheCancerCenterOf

Indiana

2630GrantLineRoad

618E

MarketStreet

2315GreenValleyRoad

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Subject NorthgateMedicalCenter

21

LEASE COMPARABLES

Average Rent per SF

New Albany MOBNEW ALBANY, IN


OCCUPANCY AND AVERAGE RENT PER SF

Average Occupancy

0

10

20

30

40

50

60

70

80

90

100

Subject TrinityPlaza

NorthgateMedicalCenter

TheCancerCenterOf

Indiana

2630GrantLineRoad

618E

MarketStreet

2315GreenValleyRoad

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Subject NorthgateMedicalCenter

21

LEASE COMPARABLES

Average Rent per SF

New Albany MOBNEW ALBANY, IN


OCCUPANCY AND AVERAGE RENT PER SF

AVERAGE OCCUPANCY

AVERAGE RENT PER SF

LEASE COMPARABLES


1 2325 Green Valley Road, New Albany, IN 47150

Property Name

Trinity Plaza


Occupancy 100%


Comments: 0 .6 miles from the subject property .


Property Name

The Cancer Center of Indiana


Occupancy 100%

Year Built 2005


2 3605 Northgate Court, New Albany, IN 47150

Property Name

Northgate Medical Center


Occupancy 89%

Year Built 2000


Rent/SF Available SF Lease Type

N/A 0 N/A


$17 .00 5,700 NNN


N/A 0 N/A

LEASE COMPARABLES


4 2630 Grant Line Road, New Albany, IN 47150

Property Name

2630 Grant Line Road


Occupancy 100%




Property Name

2315 Green Valley Road


Occupancy 100%

Year Built 2006


5 618 E Market Street, New Albany, IN 47150

Property Name

618 E Market Street


Occupancy 100%

Year Built 1882

Comments: 2 miles from the subject property .


N/A 0 N/A


N/A 0 N/A


N/A 0 N/A

LEASE COMPARABLES

DEMOGRAPHIC ANALYSIS



DEMOGRAPHIC REPORT1 Mile 3 Miles 5 Miles

2000 Population 8,810 45,641 119,6922010 Population 8,884 44,235 113,6932014 Population 9,056 44,861 115,2672019 Population 9,107 44,634 115,564

2000 Households 3,683 19,080 47,2742010 Households 3,757 18,771 46,1762014 Households 3,847 19,114 46,9732019 Households 3,917 19,174 47,497

2014 Average Household Size 1.78 2.29 2.382014 Daytime Population 99,674 199,667 287,038

2000 Owner Occupied Housing Units 48.20% 58.58% 55.96%2000 Renter Occupied Housing Units 46.32% 34.81% 35.66%2000 Vacant 5.48% 6.61% 8.38%2014 Owner Occupied Housing Units 47.03% 57.88% 56.33%2014 Renter Occupied Housing Units 52.97% 42.12% 43.67%2014 Vacant 8.36% 9.37% 11.69%2019 Owner Occupied Housing Units 46.82% 57.69% 56.36%2019 Renter Occupied Housing Units 53.18% 42.31% 43.64%2019 Vacant 8.84% 9.79% 12.07%

$ 0 - $14,999 27.9% 17.8% 22.2%$ 15,000 - $24,999 13.3% 13.4% 14.6%$ 25,000 - $34,999 12.9% 13.7% 12.3%$ 35,000 - $49,999 15.7% 15.3% 14.6%$ 50,000 - $74,999 14.7% 19.3% 17.1%$ 75,000 - $99,999 7.5% 9.9% 8.7%$100,000 - $124,999 3.8% 4.9% 5.1%$125,000 - $149,999 2.1% 2.5% 2.4%$150,000 - $199,999 1.6% 1.8% 1.7%$200,000 - $249,999 0.2% 0.5% 0.6%$250,000 + 0.3% 0.9% 0.9%

2014 Median Household Income $31,132 $39,702 $35,8882014 Per Capita Income $18,487 $22,843 $20,8482014 Average Household Income $42,880 $53,002 $50,678



Population

In 2014, the population in your selected geography is 115,266. The population has changed by -3.69% since 2000. It is estimated that the population in your area will be 115,564 five years from now, which represents a change of 0.25% from the current year. The current population is 47.55% male and 52.44% female. The median age of the population in your area is 37.6, compare this to the Entire US average which is 37.3. The population density in your area is 1,466.01 people per square mile.

Households

There are currently 46,973 households in your selected geography. The number of households has changed by 0.63% since 2000. It is estimated that the number of households in your area will be 47,496 five years from now, which represents a change of 1.11% from the current year. The average household size in your area is 2.42 persons.

Income

In 2014, the median household income for your selected geography is $35,888, compare this to the Entire US average which is currently $51,972. The median household income for your area has changed by 12.13% since 2000. It is estimated that the median household income in your area will be $40,789 five years from now, which represents a change of 13.65% from the current year.

The current year per capita income in your area is $20,847, compare this to the Entire US average, which is $28,599. The current year average household income in your area is $50,678, compare this to the Entire US average which is $74,533.

Race and Ethnicity

The current year racial makeup of your selected area is as follows: 63.12% White, 31.43% Black, 0.03% Native American and 0.62% Asian/Pacific Islander. Compare these to Entire US averages which are: 71.60% White, 12.70% Black, 0.18% Native American and 5.02% Asian/Pacific Islander.

People of Hispanic origin are counted independently of race. People of Hispanic origin make up 3.91% of the current year population in your selected area. Compare this to the Entire US average of 17.13%.

Housing In 2000, there were 28,875 owner occupied housing units in your area and there were 18,398 renter occupied housing units in your area. The median rent at the time was $405.

Employment

In 2014, there are 49,035 employees in your selected area, this is also known as the daytime population. The 2000 Census revealed that 52.63% of employees are employed in white-collar occupations in this geography, and 47.28% are employed in blue-collar occupations. In 2014, unemployment in this area is 10.85%. In 2000, the average time traveled to work was 22.6 minutes.

DEMOGRAPHIC SUMMARYDEM

OGRAPHIC ANALYSIS


P O P U L A T I O N D E N S I T Y E M P L O Y M E N T D E N S I T Y A V E R A G E H O U S E H O L D I N C O M E

DEMOGRAPHIC MAPS

Number of people living in a given area per square mile.

Demographic data © 2012 by Experian.

16

DEMOGRAPHIC ANALYSISEast Village Development ProjectSAN DIEGO, CA

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services, Inc. © 2015 Marcus & Millichap. Allrights reserved.

POPULATION DENSITY

The number of people employed in a given area per square mile.


DEMOGRAPHIC ANALYSIS3691 Airport BoulevardMOBILE, AL

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Atlanta, Inc. © 2015 Marcus &Millichap. All rights reserved.

EMPLOYMENT DENSITY

Average income of all the people 15 years and older occupying a single housing unit.


DEMOGRAPHIC ANALYSIS3691 Airport BoulevardMOBILE, AL

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as tothe accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for anyinaccuracies. Marcus & Millichap is a trademark of Marcus & Millichap Real Estate Investment Services of Atlanta, Inc. © 2015 Marcus &Millichap. All rights reserved.

AVERAGE HOUSEHOLD INCOME


MARKET OVERVIEW



MARKET OVERVIEW

CENTRALIZED LOCATION• Approximately 60 percent of U.S. cities are within a one-day drive of the metro. MAJOR DISTRIBUTION CENTER• Louisville’s strategic location in the country has made it a hub for the logistics and distribution industries. HIGHEST LEVELS OF PORT TRAFFIC• Every year, attention is focused on Louisville when it hosts the Kentucky Derby, the most acclaimed

horse racing event in the world.

MARKET HIGHLIGHTS

The Louisville metro is comprised of seven counties in north central Kentucky and five in southern Indiana. The Ohio River passes through the region, providing a wide and vast flood plain, surrounded by hilly terrain at the metro’s perimeter. The Knobs region, in southern Louisville, hosts the Jefferson Memorial Forest and is largely undeveloped. With few natural barriers to limit outward expansion, the metro has recorded approximately 30 percent population growth since 1990.

GEOGRAPHY

Louisville is home to 1.3 million residents residing within Indiana’s Harrison, Washington, Clark, Floyd and Scott counties, as well as Kentucky’s Jefferson, Spencer, Oldham, Trimble, Meade, Nelson and Shelby counties. Louisville in Kentucky is the region’s largest city with more than 600,000 citizens, followed by Jeffersonville, Indiana.

METRO

AIRPORTS � Louisville International Airport � Browman Field, Clark Regional Airport

MAJOR ROADWAYS � Interstates 64, 65, 71, 264, 265

RAIL � Freight - CSX, Norfolk Southern � Regional Freight - Paducah and Lousiville

PORT � Port of Louisville


ECONOMYAlthough the region’s economy has been historically dominated by the shipping and rail industries, contemporary Louisville boasts a well-diversified economy focused on advanced manufacturing, logistics, life sciences and healthcare among other industry sectors. The metropolitan area is headquarters to three Fortune 500 companies, including Humana, Yum Brands, and Kindred Healthcare. In recent decades, the area has attracted numerous medical and healthcare organizations. Louisville’s downtown medical research campus recently completed an $88 million rehabilitation center, which attracts some of the nation’s top medical talent.

In line with the metropolitan area’s legacy in the transportation industry, Louisville’s economy still benefits from being centrally located in the United States and is within a one-day drive to 60 percent of U.S. cities. The UPS Worldport global air-freight hub at Louisville International Airport makes the region an important player in global shipping and logistics. Automotive and appliance manufacturing are also part of Louisville’s economic fabric, as is the spirits industry. Roughly one-third of all bourbon is produced in the area.

The Louisville economy is accelerating, with the region’s gross metropolitan product on the rise. GMP is forecast to grow by approximately 2.1 percent this year, followed by 3.5 percent in 2015. Regional retail sales will also record continued growth this year, expanding by 6.3 percent, slightly above the national average.

MARKET OVERVIEW


LABORThe Louisville metropolitan area provides a total of 631,400 jobs and over the last five years, nonfarm employment grew at an annual pace of 1.3 percent. Through 2018, annual employment gains are expected to slow to 0.9 percent.

Trade, transportation and utilities is the largest major employment sector in Louisville, accounting for 21 percent of all jobs, or nearly 136,000 positions. This segment of employment is expected to grow 0.6 percent annually through 2018. Education and health services comprise the second biggest share of regional jobs with 87,900 positions, or 14 percent of total regional employment. Jobs in this field are forecast to increase 1.9 percent annually over the next five years. The professional and business services, and the government sectors, each contribute another 13 percent of employment. Louisville is also a major manufacturer of both automotive components and electrical appliances. Jobs in manufacturing represent 12 percent of regional payrolls.

Throughout 2018, jobs in construction are projected to post the most robust growth of any major employment sector, at an average of 2.7 percent expansion each year. Education and health services, leisure and hospitality, and professional and business services are all sectors that expect growth in excess of 1.0 percent throughout these years. Only jobs in manufacturing are forecast to contract during this time frame.

631,400 JOBS

MARKET OVERVIEW


EMPLOYERSLouisville has evolved from a transportation and logistics dominated employment landscape to a more diversified economy. Still, some of the most important employers in the metropolitan area are in transportation services. UPS’s central hub at Louisville International Airport provides a dynamic shipping and distribution industry to the region. UPS alone employs more than 20,000 workers. Additionally, Amazon is rapidly expanding operations in the Louisville metro.

The metropolitan area’s lively healthcare industry is also a major source of Louisville residents’ income. Numerous private hospitals and health insurance providers abound in the region. Humana, Northern Healthcare, KentuckyOne Health, and the Baptist Healthcare System comprise some of the largest local names in these industries. Humana itself provides more than 11,000 regional jobs. The continued expansion of Louisville’s downtown medical research campus will likely attract an even greater presence of healthcare firms into the area.

Among the metro’s 73,800 jobs in manufacturing, many stem from automotive and household appliance fabrication. Ford Motor Co. employs approximately 8,500 workers at their Kentucky Truck Plant and Louisville Assembly Plant. Meanwhile, another 6,000 local manufacturing jobs are provided by GE Appliances in Louisville.

United Parcel Services

Humana Inc.

Norton Healthcare Inc.

Ford Motor Co.

GE Appliances

The Kroger Co.

Baptist Healthcare System, Inc.

Catholic Archdiocese of Louisville

LG&E and KU Energy LLC

MAJOR EMPLOYERS

MARKET OVERVIEW


QUALITY OF LIFEThe Louisville metro offers residents a wide array of entertainment and cultural amenities. The most famous is the Kentucky Derby, which annually attracts horse racing enthusiasts and visitors from all over the world. The Derby itself plays a large part in Louisville’s culture, and both Churchill Downs and the Kentucky Derby Museum are open to the public year-round.

Other popular museums in the metro include the Louisville Slugger Museum and Factory and the Frazier History Museum. Visual arts can be found at the Speed Art Museum, which houses works by some of the world’s most famous painters. Louisville is also home to a number of renowned estates and historical houses. Louisville Palace, Conrad’s Castle, Locust Grove, and the Belle of Louisville steamboat are all popular attractions. The metro also provides a multitude of performing arts options. The Louisville Ballet, Louisville Orchestra, Bourbon Baroque, the Kentucky Opera and other organizations stage events across the city, from the Actors Theatre of Louisville to the Kentucky Center and Brown Theatre. The metro also has a vast independent music scene. The Louisville Zoo and Renaissance Fun Park are both popular attractions for children. Additionally, nature lovers can spelunk in the region’s widely popular Louisville Mega Cavern, and hike or bike the many miles of trails.

The City of Louisville prides itself as one of the best college sports towns in the world. The NCAA’s University of Louisville Cardinals are a major source of entertainment for residents, and the metro’s other sports options range from teams in minor league baseball to indoor soccer.

MARKET OVERVIEW


CORPORATE EXPANSION TO SUBURBS TIGHTENS VACANCIES, DEVELOPER ACTIVITY RISINGAfter recovering the jobs lost during the recession, growth in healthcare, logistics, and manufacturing has triggered strong demand for office space. Job creation and company expansion related to the revival of the Ford assembly plant, GE Appliance Park, and Amazon distribution centers has motivated developers to deliver the most space in five years. The majority of construction is located outside of the CBD, where vacancy remains elevated. Humana’s consolidation of several downtown offices and move to the suburbs last year further increased vacancy. Leasing activity has picked up in the suburbs as companies are drawn by shorter commutes and lower rents. In the Hurstbourne/Lyndon submarket, phase one of the University of Louisville ShelbyHurst Research and Office Park will be completed this year. Upon completion spanning three phases, the campus will have more than 1.5 million square feet of space. Additionally, the $2.6 billion Ohio Bridges Project, which will connect downtown Louisville to Jeffersonville, will increase interest from companies to expand and relocate in the metro, supporting healthy office operations. Buyer competition in Louisville heated up last year as international investors stepped into the market with the purchase of two downtown buildings occupied by JPMorgan Chase. This year, private local buyers will search for Class B/C properties offering upside potential within the CBD and south of the city. Buyers have recently taken an interest in small, high quality multi-tenant buildings across the river in the New Albany area. However, listings remain limited as owners recoup losses from the recession with newly penned leases or rebuild the property’s tenant base. Most of the Class B/C properties are trading on a price-per-square-foot basis.

MARKET OVERVIEW


2014 MARKET OUTLOOK2014 NOPI RANK• 26, Down 6 Places. Despite healthy vacancy, six other markets surpassed Louisville due to stronger forecasts.EMPLOYMENT FORECAST• Local employers will add 19,100 positions this year, up from the 10,600 jobs during 2013.CONSTRUCTION FORECAST• Builders will deliver 525,000 square feet of office space, a 1.2 percent expansion of inventory. Roughly 200,000 square feet of space came online in 2013.VACANCY FORECAST• This year, vacancy will fall 70 basis points to 11.4 percent. In 2013, vacancy retreated 50 basis points.INVESTMENT FORECAST• As more local financing becomes available, owners will be motivated to sell assets and re-deploy proceeds.

MARKET OVERVIEW

NEW ALBANY MEDICAL OFFICE BUILDINGOfferung Memorandum

Documents

NEW ALBANY MEDICAL OFFICE BUILDING | NEW ALBANY | … › d2 › If0-ZEAw... · Marcus & Millichap is pleased to present the New Albany MOB. The project is located in the Louisville,