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214.915.8890
JOE CAPUTO
BOB MOORHEAD
RUSSELL SMITH
property. Underwent major renovations in 2013, to include a new roof. Significant improvements contributed by tenant. Top performing location.
tenant. First Choice Emergency Room is based in Lewisville, TX and is the leading freestanding emergency room system. $78.2 million in sales in 2012
lease structure. Brand new, 7-year, net lease with 10% annual rent increases beginning year 6 every 5-years.
location. First Choice Emergency Room is located at the intersection of Center Street (26,945 Cars / Day) and Pasadena Boulevard (18,344 Cars / Day) just
west of Houston Beltway 8 (78,400 Cars / Day). The population within a 1-mile radius of the subject property is projected to grow by 4.9% over the 5-year period
ending in 2017. San Jacinto College (28,549 Students) and the south campus of Deer Park High School (3,811 students) are nearby. The average annual
household income within this radius is $76,659. Houston MSA location: with an MSA population of 5,946,800, Houston anchors the 6th largest metro area in the
US. Deer Park is 30 minutes southeast of Houston.
EXCLUSIVE OFFERING | $2,368,000 - 7% CAP
FIRST CHOICE EMERGENCY ROOM
3701 Center Street, Deer Park, TX
SUBJECT PROPERTY
EXP Realty Advisors, Inc. (“Agent”) has been engaged as an agent for the sale of the
property located at 3701 Center Street, Deer Park, TX by the owner of the Property
(“Seller”). The Property is being offered for sale in an “as-is, where-is” condition and Seller
and Agent make no representations or warranties as to the accuracy of the information
contained in this Offering Memorandum. The enclosed materials include highly confidential
information and are being furnished solely for the purpose of review by prospective
purchasers of the interest described herein. The enclosed materials are being provided
solely to facilitate the prospective investor’s own due diligence for which it shall be fully and
solely responsible. The material contained herein is based on information and sources
deemed to be reliable, but no representation or warranty, express or implied, is being made
by Agent or Seller or any of their respective representatives, affiliates, officers, employees,
shareholders, partners and directors, as to the accuracy or completeness of the information
contained herein. Summaries contained herein of any legal or other documents are not
intended to be comprehensive statements of the terms of such documents, but rather only
outlines of some of the principal provisions contained therein. Neither the Agent nor the
Seller shall have any liability whatsoever for the accuracy or completeness of the
information contained herein or any other written or oral communication or information
transmitted or made available or any action taken or decision made by the recipient with
respect to the Property. Interested parties are to make their own investigations, projections
and conclusions without reliance upon the material contained herein. Seller reserves the
right, at its sole and absolute discretion, to withdraw the Property from being marketed for
sale at any time and for any reason. Seller and Agent each expressly reserves the right, at
their sole and absolute discretion, to reject any and all expressions of interest or offers
regarding the Property and/or to terminate discussions with any entity at any time, with or
without notice. This offering is made subject to omissions, correction of errors, change of
price or other terms, prior sale or withdrawal from the market without notice. Agent is not
authorized to make any representations or agreements on behalf of Seller. Seller shall
have no legal commitment or obligation to any interested party reviewing the enclosed
materials, performing additional investigation and/or making an offer to purchase the
Property unless and until a binding written agreement for the purchase of the Property has
been fully executed, delivered, and approved by Seller and any conditions to Seller’s
obligations hereunder have been satisfied or waived. By taking possession of and
reviewing the information contained herein, the recipient agrees that (a) the enclosed
materials and their contents are of a highly confidential nature and will be held and treated
in the strictest confidence and shall be returned to Agent or Seller promptly upon request;
and (b) the recipient shall not contact employees or tenants of the Property directly or
indirectly regarding any aspect of the enclosed materials or the Property without the prior
written approval of the Seller or Agent; and (c) no portion of the enclosed materials may be
copied or otherwise reproduced without the prior written authorization of Seller and Agent.
PAGE 3: INVESTMENT | TENANT | LEASE OVERVIEW
PAGE 1: COVER
PAGE 2: TABLE OF CONTENTS | DISCLAIMER
PAGE 10: DEMOGRAPHICS
Table of contents | Disclaimer FIRST CHOICE EMERGENCY ROOM
3701 Center Street, Deer Park, TX
PAGE 7: IPO PRESS RELEASE
PAGE 8-9: LOCATION MAPS
Disclaimer
2
PAGE 5: AERIAL PHOTO
PAGE 4: SITE PLAN
PAGE 6: LOCATION OVERVIEW
SUBJECT PROPERTY PRIOR TO PANDA EXPRESS EXPANSION
FIRST CHOICE EMERGENCY ROOM | www.fcer.com
First Choice Emergency Room is based in Lewisville, TX and is the leading freestanding emergency room system; it is both the largest and the oldest. First Choice
Emergency Room is revolutionizing the delivery of emergency medical services for adult and pediatric emergencies, both major and minor. First Choice
Emergency Room facilities are innovative, freestanding, and fully equipped emergency rooms with state of the art diagnostic technology (CT Scanners,
Ultrasound, Digital X-ray) and on-site labs. All First Choice Emergency Room locations are exclusively staffed with board-certified emergency physicians and
emergency trained registered nurses. With locations in Houston, Dallas/Fort Worth, Austin, and Colorado Springs, patients receive high-quality care and have an
alternative to today’s overburdened hospital system.
Inc. Magazine ranked First Choice as one of the fastest growing businesses in the U.S. in 2010, 2011, and 2012. The company was named as one of the 2013
Best Companies to Work for in Texas. The company’s current growth plans are backed by Sterling Partners, which has invested $59 million in the business. First
Choice generated $78.2 million in revenue in 2012, up from $37 million in 2008. First Choice was established in 2002 by Dr. Jack Novak, and Thomas S. Hall is
the company’s current CEO. First Choice plans to build more Freestanding Emergency Rooms, as stated in 2012. The company has plans to invest over $100
million over the next few years by developing many more facilities. As stated in a Dallas Morning News article in March 2013, CEO Tom Hall stated that First
Choice plans to add 6 to 8 new DFW facilities in the next 12 to 18 months.
PRICE: $2,368,000
CAP RATE: 7.0%
NET OPERATING INCOME: $165,750
BUILDING AREA: 6,500+ Square Feet
LAND AREA: 0.64+ Acres
YEAR BUILT / RENOVATED: 1994 / 2013
LANDLORD RESPONSIBILITY: Includes Roof & Structure*
OWNERSHIP: Fee Simple Interest
OCCUPANCY: 100%
*Brand New Roof In 2013
Tenant overview
3
Investment overviewFIRST CHOICE EMERGENCY ROOM
3701 Center Street, Deer Park, TX
Guarantor: First Choice ER, LLC
Lease Expiration: September 2020
Rent Commencement: September 2013
Initial Lease Term: 7-Years, Plus 1, 7-Year Options to Renew
Rent Increases: 10% in Lease Year 6 & Escalating Every 5-Yrs.
Year 1-5 Annual Rent (Current): $165,750
Lease Type: Net Lease
Year 6-7 Annual Rent: $182,325
Year 8-10 Annual Rent (Option 1): $182,325
Year 11-14 Annual Rent (Option 1): $200,557
Lease overview
5
Aerial photoFIRST CHOICE EMERGENCY ROOM
3701 Center Street, Deer Park, TX
Pasadena Boulevard (18,344 Cars / Day)Carpenter
Elementary
School
Bonnette
Junior High
School
Deer Park
High School SouthAbshire
Stadium
Houston Beltway 8 (78,400 Cars / Day)
Deer Park
Elementary
School
Providence at Town Square
Senior Living
IMMEDIATE TRADE AREA
First Choice Emergency Room is located at the intersection of Center Street
(26,945 Cars / Day) and Pasadena Boulevard (18,344 Cars / Day) just west of
Houston Beltway 8 (78,400 Cars / Day). Center Street is a north-south arterial
road that traverses Deer Park and Pasadena Boulevard provides the trade
area with direct access to Houston Beltway 8, which is Houston’s outer ring
road.
Numerous national credit tenants have taken advantage of this convenience
and accessibility. The subject property shares the southeast corner of the
intersection with an HEB grocery store, Starbucks, and Chase Bank. The site
is adjacent to the newly constructed Shoppes at Town Square shopping center
which includes T-Mobile, Verizon Wireless, Baskin Robbins, Firehouse Subs,
and Anytime Fitness in its tenant mix. Other retailers nearby include
Walgreens, CVS, Radio Shack, Food Town, Sonic, Shell, Papa John’s, Little
Caesar’s, Church Chicken, and Valero. First Choice also fronts a newly
constructed 14-acre senior living development, Providence at Town Square
Senior Living.
The population within a 1-mile radius of the subject property is projected to
grow by 4.9% over the 5-year period ending in 2017. The average annual
household income within this radius is $76,659. The subject property has the
additional advantage of being surrounded by numerous schools. The south
campus of Deer Park High School (3,811 Students) is just north of First Choice
Emergency Room. Carpenter Elementary School (910 Students) and Bonnette
Junior High School (769 Students) are just west of the site. Deer Park
Elementary School (719 Students) is nearby to the east. Additionally, San
Jacinto Junior College (28,549 Students) is close by to the south.
DEER PARK, TX
Deer Park is a suburb of Houston, TX located to the southeast of the city. The
Deer Park population was 12,773 in 1970, and 28,520 in 2000. This growth has
been fueled by the growth of the petrochemical industry as well as the growth
of business along the Houston Ship Channel. According to a 2012 report, ship
channel traffic accounts for more than 1 million Texas jobs and generates more
than a $178 billion impact on the state's economy. Deer Park has a school
district with 14 campuses, a city library, community theater, municipal court
building, three fire stations, numerous city parks and recreational facilities,
state-of-the-art water and sewer processing facilities, a post office, several
hotels, 14 major industries as well as several light industrial companies.
6
Location overviewFIRST CHOICE EMERGENCY ROOM
3701 Center Street, Deer Park, TX
Today, Deer Park has approximately 9,000 homes and 32,010 residents. Thevibrant local economy boasted a 5.4% unemployment rate as of April 2013.
HOUSTON-SUGAR LAND-BAYTOWN METROPOLITAN AREA
The Houston-Sugar Land-Baytown Metropolitan Statistical Area (MSA),
colloquially known as Greater Houston, is the 6th largest in the United States
with a population of 5,946,800. From 2000 to 2030, the metropolitan area is
projected by Woods & Poole Economics to rank 5th in the nation in population
growth—adding 2.66 million people. In 2006, Greater Houston ranked 1st in
Texas and 3rd in the U.S. within the category of "Best Places for Business and
Careers" by Forbes. The Greater Houston Gross Metropolitan Product (GMP)
in 2005 was $308.7 billion, up 5.4 percent from 2004 in constant dollars. By
2010, the GMP rose to $384 billion, 5th in the nation. Only 28 nations other
than the United States have a GDP exceeding the Greater Houston GMP.
Mining, which in Houston is almost entirely oil and gas exploration and
production, accounts for 11 percent of Greater Houston's GMP.
Houston is 2nd to New York City in Fortune 500 headquarters. Galveston Bay
and the Buffalo Bayou together form one of the most important shipping hubs
in the world, and the Port of Houston, the Port of Texas City, and the Port of
Galveston are all major seaports located in Greater Houston. The area is one
of the leading centers of the energy industry, particularly petroleum processing,
and many companies have large operations in this region. The MSA comprises
the largest petrochemical manufacturing area in the world, including for
synthetic rubber, insecticides, and fertilizers. Much of metro area's success as
a petrochemical complex is enabled by the Houston Ship Channel. The area is
also the world's leading center for building oilfield equipment, and is a major
center of biomedical research, aeronautics, and high-technology.
Houston is home to the Texas Medical Center—the largest medical center in
the world—several universities (including Rice University, Texas Southern
University, and The University of Houston), and two of the largest systems of
higher learning in the United States (The Houston and Lone Star Community
College systems). The University of Houston’s annual impact on the Houston-
area's economy alone equates to that of a major corporation: $1.1 billion in new
funds attracted annually to the Houston area, $3.13 billion in total economic
benefit, and 24,000 local jobs generated. CNN/Money and Money Magazine
have recognized 5 cities in the Greater Houston area the past 3-years as partof its 100 Best Places to Live in the United States.
7
IPO PRESS RELEASEFIRST CHOICE EMERGENCY ROOM
3701 Center Street, Deer Park, TX
“First Choice Emergency Room has tapped Goldman Sachs Group Inc and Deutsche Bank AG to prepare an initial public offering that could come in the second quarter of this year, people
familiar with the matter said on Friday.
First Choice, the largest freestanding emergency room network in Texas and backed by private equity firm Sterling Partners, is the latest in a string of private equity-owned healthcare
services companies looking to go public this year. Representatives for First Choice, Sterling Partners and Goldman Sachs did not immediately respond to requests for comment. Deutsche
Bank declined to comment.
First Choice, founded in 2002 and headquartered in Lewisville, Texas, had around $100 million of revenues in 2012. It offers emergency medical services for adult and pediatric patients,
and has locations in Houston, Dallas/Fort Worth, Austin and Colorado Springs. The company, which competes against traditional hospital emergency rooms, says its facilities are equipped
to serve both major and minor emergency needs, and its business model helps cut down on patient wait times.”
Oran, Olivia, and Soyoung Kim. "First Choice Emergency Hires Goldman, Deutsche for IPO -sources." Reuters. Thomson Reuters, 09 Apr. 0011. Web. 17 Apr. 2014.
10
DemographicsFIRST CHOICE EMERGENCY ROOM
3701 Center Street, Deer Park, TX
Demographic snapshot
HOUSTON SHIP CHANNEL
DOWNTOWN HOUSTON, TX
Radius 1 Mile 3 Mile 5 Mile
Population:
2017 Projection 16,264 85,860 176,461
2012 Estimate 15,507 82,469 169,362
2010 Census 15,390 82,112 167,942
Growth 2012-2017 4.90% 4.10% 4.20%
Growth 2010-2012 0.80% 0.40% 0.80%
Households:
2017 Projection 5,786 29,658 59,044
2012 Estimate 5,565 28,652 57,024
2010 Census 5,514 28,448 56,395
Growth 2012-2017 4.00% 3.50% 3.50%
Growth 2010-2012 0.90% 0.70% 1.10%
Owner Occupied 3,780 20,012 36,845
Renter Occupied 1,785 8,640 20,180
2012 Avg Household Income $76,659 $73,372 $67,097
2012 Med Household Income $60,917 $59,068 $52,552
2012 Per Capita Income $27,235 $25,505 $22,692
2012 Households by Household Inc:
Income Less than $15,000 412 2,485 6,633
Income $15,000 - $24,999 474 2,376 5,729
Income $25,000 - $34,999 517 2,340 5,801
Income $35,000 - $49,999 743 3,930 8,490
Income $50,000 - $74,999 1,180 6,786 12,217
Income $75,000 - $99,999 779 4,252 7,403
Income $100,000 - $149,999 1,098 4,721 7,403
Income $150,000 - $199,999 175 962 1,778
Income $200,000+ 188 801 1,571