rancho professional center

R A N C H O P R O F E S S I O N A L C E N T E R

2 , 4 0 0 S F F U L L Y L E A S E D T O R A D N E T C O N D O I N T H E I N L A N D E M P I R E C A L I F O R N I A

This Confidential Offering Memorandum (“Memorandum”) is being delivered subject to the terms of the Confidentiality

Agreement (the “Confidentiality Agreement”) signed by you and constitutes part of the Confidential Information (as defined

in the Confidentiality Agreement). It is being given to you for the sole purpose of evaluating the possible investment in 8710

Monroe Court, Suite 100, Rancho Cucamonga, CA (the “Project”), and is not to be used for any other purpose or made available

to any other party without the prior written consent of Seller, or its exclusive broker, Cushman & Wakefield. This Memorandum

was prepared by Cushman & Wakefield based primarily on information supplied by Seller. It contains select information about

the Project and the real estate market but does not contain all the information necessary to evaluate the Project. The financial

projections contained herein (or in any other Confidential Information) are for general reference only. They are based on

assumptions relating to the overall economy and local competition, among other factors. Accordingly, actual results may vary

materially from such projections. Various documents have been summarized herein to facilitate your review; these summaries

are not intended to be a comprehensive statement of the terms or a legal analysis of such documents. While the information

contained in this Memorandum and any other Confidential Information is believed to be reliable, neither Cushman & Wakefield

nor Seller guarantees its accuracy or completeness. Because of the foregoing and since the investment in the Project is being

offered on an “As Is, Where Is” basis, a prospective investor or other party authorized by the prospective investor to use such

material solely to facilitate the prospective purchaser’s investigation, must make its independent investigations, projections

and conclusions regarding the investment in the Project without reliance on this Memorandum or any other Confidential

Information. Although additional Confidential Information, which may include engineering, environmental or other reports,

may be provided to qualified parties as the marketing period proceeds, prospective purchasers should seek advice from their

own attorneys, accountants, engineers and environmental experts. Neither Cushman & Wakefield nor Seller guarantees the

accuracy or completeness of the information contained in this Memorandum or any other Confidential Information provided

by Cushman & Wakefield and Seller. Seller expressly reserves the right, at its sole discretion, to reject any offer to invest in the

Project or to terminate any negotiations with any party at any time with or without written notice. Seller shall have no legal

commitment or obligations to any prospective investor unless and until a written sale agreement has been fully executed,

delivered and approved by Seller and any conditions to Seller’s obligations thereunder have been satisfied or waived. Seller

has retained Cushman & Wakefield as its exclusive broker and will be responsible for any commission due to Cushman &

Wakefield in connection with a transaction relating to the Project pursuant to a separate agreement. Cushman & Wakefield is

not authorized to make any representation or agreement on behalf of Seller. Each prospective investor will be responsible for

any claims for commissions by any other broker in connection with an investment in the Project if such claims arise from acts

of such prospective investor or its broker. This Memorandum is the property of Seller and all parties approved by Seller and

may be used only by parties approved by Seller. No portion of this Memorandum may be copied or otherwise reproduced or

disclosed to anyone except as permitted under the Confidentiality Agreement.

OFFERING MEMORANDUM DISCLAIMER12830 El Camino Real, Suite 100 San Diego, CA 92130 +1 858 452 6500

TRAVIS IVES Managing Director US Healthcare Capital Markets +1 858 334 4041 [email protected] CA Lic: 1889097

JOE ZUREKDirectorHealthcare Advisory Practice +1 858 558 5612 [email protected] CA Lic: 1967813

GINO LOLLIO Managing Director US Healthcare Capital Markets +1 312 338 7061 [email protected]


C&W HEALTHCARE CAPITAL MARKETS

EXECUTIVE SUMMARY

HIGHLIGHTS

EXEC

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PROPERTY ADDRESS 8710 Monroe Court, Suite 100

Rancho Cucamonga, CA

SUITE SIZE 2,400 SF

YEAR BUILT 2005

NOI

$72,840

Untitled map


Cushman & Wakefield’s U.S. Healthcare Capital Markets Team is pleased to offer qualified investors the opportunity to acquire condominium interests in Rancho Professional Center (the “Project”), located Rancho Cucamonga in California. Comprised of 2,400 rentable square feet, the project is fully leased to Radnet Management Inc, the internationally recognized leader in imaging services who has committed to a new ten (10) year lease.

The Inland Empire medical submarket remains a healthy and robust market. Vacancy has remained in single digits for the past 17 consecutive quarters, with an average 3.3% annual rent growth over the same period.

This investment opportunity offers a dependable stream of income based on a long-term triple-net lease structure whereby tenant will be responsible for reimbursement of all operating expenses. Landlord’s responsibility is limited to the repair and maintenance of exterior accouterments (which will fall upon the associations), exclusive of air conditioning, plumbing, chiller, electrical, sewers and signage which fall under Tenant responsibilities. This provides investors with protection from unforeseen costs and ensures a dependable stream of net income over the entire term of the lease.

The medical imaging suite at Rancho Professional Center in Rancho Cucamonga, CA has operated continuously as an MRI center since 2005. This set of medical imaging spaces accommodates a full array of state-of-the-art medical imaging devices including 4 MRIs, 3 CT scanners, 3 ultrasound devices, X-Ray and a vast array of infrastructure support systems and telecommunications devices. Continuous upgrades are planned by RadNet, the country’s largest imaging provider network. RadNet operates over 350 imaging centers in the USA and is a publicly traded company in operation since 1984. RadNet’s tenure at this location is bolstered by one of the highest local population growth rates in California. Circumstances are optimal for continued long-term success and growth of RadNet with a very low likelihood of turnover at this property.

• OCCUPANCY - 100%• NOI (STARTING DECEMBER 2021) - $72,840• REMAINING LEASE TERM - 9.42 YEARS• RADNET CREDIT RATING - MOODY’S B2• DEPENDABLE INCOME THROUGH 2031 • EASE OF OWNERSHIP

• STRONG LOCAL MEDICAL MARKET WITH HIGH GROWTH RATE

• PREMIER TENANT WITH HISTORICAL LONG-TERM OCCUPANCY

• STEADY AND STRONG CAPITAL IMPROVEMENTS BY TENANT

NOI$72,840 (DEC 21’ - NOV 22’)

ASKING PRICE$1,324,364

CAP RATE5.5%

4

FLOOR PLAN | 2,400 SFRA

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6 LOCATION SUMMARY

PROJECT NAME: Rancho Professional Center

PROJECT ADDRESS: 8680-8710 Monroe Ct, Rancho Cucamonga

YEAR BUILT: 2005

CONDO PROJECT SIZE: 17,968 USF

SUITE SIZE: 2,400 RSF (per lease) | 2,270 USF (12.39% of condo project)

SUITE #: 100 (8710 Bldg)

LEASE START: 05/01/21

LEASE END: 04/30/31

INITIAL TERM: 10 Years

STARTING RATE: $2.50

LEASE TYPE: Triple-Net (NNN)

MONTHLY BASE RENT: $6,000.00

ESCALATIONS: Annual CPI not to exceed 3%

RENEWAL OPTIONS: 3 options for 5 years each at FMV

SECURITY DEPOSIT: None

OCCUPANCY SINCE: 2005

TI INVESTMENT: $720,000 ($300/SF)

USE: MRI Center

APN: 0209-521-17

Cushman & Wakefield | 7

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Period Beginning Period Ending Annual Base Rent Monthly Base Rent* Annual Base Rent Per SF

May 1, 2021 April 30, 2022 $72,000 $6,000 $30.00

May 1, 2022 April 30, 2023 $73,440 $6,120 $30.60

May 1, 2023 April 30, 2024 $74,909 $6,242 $31.21

May 1, 2024 April 30, 2025 $76,407 $6,367 $31.84

May 1, 2025 April 30, 2026 $77,935 $6,495 $32.47

May 1, 2026 April 30, 2027 $79,494 $6,624 $33.12

May 1, 2027 April 30, 2028 $81,084 $6,757 $33.78

May 1, 2028 April 30, 2029 $82,705 $6,892 $34.46

May 1, 2029 April 30, 2030 $84,359 $7,030 $35.15

May 1, 2030 April 30, 2031 $86,047 $7,171 $35.85

*Annual escalations are CPI not to exceed 3%, but assumed to be 2%


10

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TENANT PROPERTY LOCATION SIZE (SF) PERCENTAGE OF PORTFOLIO

LEASE COMM. LEASE EXP. BASE RENT

PER SFMONTHLY

BASE RENTANNUAL

BASE RENTNOI

(DEC 2021)RENTAL

ESCALATIONSESCALATION

DATES

ESCALATED ANNUAL

RENT PER SF

ESCALATED MONTHLY

RENT

ESCALATED ANNUAL

RENT

LEASE TYPE OPTIONS

RADNET MANAGEMENT, INC. 8710 MONROE COURT, SUITE 100 RANCHO CUCAMONGA, CA 2,400 19.66% 5/1/2021 4/30/2031 $30.00 $6,000 $72,000 $72,840 ANNUAL CPI NOT TO

EXCEED 3%ASSUMED TO BE 2%

MAY-22 $30.60 $6,120 $73,440 NNN (3) 5-YRFMV

MAY-23 $31.21 $6,242 $74,909

MAY-24 $31.84 $6,367 $76,407

MAY-25 $32.47 $6,495 $77,935

MAY-26 $33.12 $6,624 $79,494

MAY-27 $33.78 $6,757 $81,084

MAY-28 $34.46 $6,892 $82,705

MAY-29 $35.15 $7,030 $84,359

MAY-30 $35.85 $7,171 $86,047

RENTABLE SQUARE FEET: 2,400 100% OCCUPIED WALT: 9.42

YEARS TOTAL: $72,840

TENA

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TENANT OVERVIEW

Image is everything at RadNet. The company owns and/or manages about 350 centers that offer a variety of diagnostic imaging services, including magnetic resonance imaging (MRI), computed tomography (CT), PET scanning, X-ray, ultrasound, and mammography. Its facilities are typically organized in regional clusters around urban hubs. RadNet contracts with groups of radiologists and other third parties to provide the actual medical services while it runs the administration of the facilities and takes a cut of the revenues plus a management fee. It also develops and sells radiology software and provides teleradiology interpretation services.

STRENGTHS

Diversified Payor Mix

Strong regional network enabled RadNet to become an attractive and preferred solution provider for third-party payors. The revenue model of RadNet consists of diverse mix of payors, including managed care capitated payors, private payors and government payors. The diverse mix mitigated risks associated with exposure to possible unfavorable reimbursement trends within one-payor class. In addition, RadNet’s experience with capitation arrangements over the last several years provided it with the expertise to manage utilization and pricing effectively, resulting in a predictable stream of profitable revenue. In FY2019, RadNet generated 56% of its payments from commercial insurance payors, 21% from Medicare, 11% from managed care capitated payors, and 2% from Medicaid.

Comprehensive Service Portfolio

The company is one of leading providers of a comprehensive suite of diagnostic imaging services. A majority of its facilities are multi-modality sites and a part of its facilities are single-modality sites. The multi-modality facilities offer patients and referring physicians’ one location to serve their needs for multiple procedures. The multi-modality sites offers varying combinations of magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), ultrasound, mammography, nuclear medicine, diagnostic radiology (X-ray) and fluoroscopy. Furthermore, RadNet complemented multi-modality sites with single-modality sites in order to offer a wide range of services in a local area according to demand. Single-modality sites provide either X-ray or MRI. The development of these sites helps patients avoid multiple visits or lengthy journeys between facilities and hence reduce the costs as well as time. As of December 31, 2019, its portfolio comprised 614 ultrasound systems; 257 MRI systems; 152 CT systems; 49 PET/CT systems; 52 nuclear medicine systems; 285 X-ray systems; 261 mammography systems and 102 fluoroscopy systems.

Regional Network

Strong network resulted in operating efficiencies, improved response time and better equipment utilization rates. RadNet’s network of fixed-site, self-supporting outpatient diagnostic imaging facilities is the biggest of its kind in California, Delaware, Maryland, New Jersey, Florida and New York. It is also the sole owner of the largest outpatient diagnostic imaging facility in the US based on numbers of locations. Being operational for more than two decades, it developed a strong knowledge of geographic markets, established long-term relationships with key payors, radiology groups and referring physicians within these markets. RadNet also increased service portfolio by implementing scheduling systems within geographic regions. It incorporated advanced information technology systems across all locations enabling it to digitally transmit all-inclusive data relating to the diagnostic imaging services performed. Similarly, Beverly Radiology Medical Group (BRMG) makes use of RadNet’s advanced information technology system to monitor radiologists. The grouping of its facilities within regional networks enabled it to easily move technologists and other personnel, as well as equipment, from under-utilized to over-utilized facilities on an as-needed basis. As of December 31, 2019, it operated 335 centers in California, Maryland, Florida, Delaware, New Jersey and New York.

QUICK FACTS

• COMPANY TYPE: PUBLIC (NASDAQ: RDNT)

• HEADQUARTERS: LOS ANGELES, CA

• CREDIT TENANT: B2 (MOODYS)

• ANNUAL SALES: $1 BILLION (2020)

• TOTAL ASSETS: $1.7 BILLION

• EMPLOYEES: 5,900

12

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MARKET OVERVIEW | INLAND EMPIRE MARKET OVERVIEW | RIVERSIDE COUNT Y

UNDER CONSTRUCTION SF

149K

MARKET RENT/SF

$2.03MARKET SALE PRICE/SF

$225

INVENTORY SF

11.4M

VACANCY RATE

6.4%

POPULATION

4.65 MILMEDIAN AGE

34COLLEGE EDUCATED

55%AVG HOUSEHOLD INCOME

$89,572

12 MO NET ABSORPTION SF

124KUNDER

CONSTRUCTION SF

20.8K

MARKET RENT/SF

$2.19MARKET SALE PRICE/SF

$245

INVENTORY SF

2.9M

VACANCY RATE

6.2%

POPULATION

2.4 MILMEDIAN AGE

35COLLEGE EDUCATED

55%AVG HOUSEHOLD INCOME

$103,233

12 MO NET ABSORPTION SF

71.9K

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OFFE

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EVALUATION CONSIDERATIONS

OFFERINGPRICE

FINANCIALCAPACITYTO PERFORM

PROPOSEDCAPITALIZATIONSTRUCTURE

EXPERIENCEIN SIMILARTRANSACTIONS

CONTINGENCIES

TIMINGOF CLOSE

OFFERING INSTRUCTIONS

Offers should be submitted via email to [email protected] and include the following:

1. Purchase price 2. Source of debt and equity 3. Earnest money deposit 4. Due diligence and closing time frames 5. Detailed list of contingencies including investment committee,

appraisal and/or lender approvals that may be required 6. Seller willing to consider offers on all or a portion of the portfolio


FOR MORE INFORMATION, PLEASE CONTACT:

TRAVIS IVES Managing DirectorU.S. Healthcare Capital Markets+1 858 334 [email protected]

Property Tours: By appointment only

Bid Deadline: Offer at will

Purchase Price: $1,324,364

mailto:Travis.Ives%40cushwake.com?subject=

mailto:travis.ives%40cushwake.com?subject=

TRAVIS IVES Managing Director +1 858 334 4041 [email protected] CA Lic: 1889097

JOE ZUREKDirector +1 858 558 5612 [email protected] CA Lic: 1967813

GINO LOLLIO Managing Director +1 312 338 7061 [email protected]

C&W HEALTHCARE CAPITAL MARKETS


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