NET LEASED INVESTMENT OFFERING. Brown Mackie College (NASDAQ: EDMC) 3454 Douglas Road South Bend, Indiana.

Transcription

1 Brown Mackie College (NASDAQ: EDMC) 3454 Douglas Road South Bend, Indiana

2 TABLE OF CONTENTS TABLE OF CONTENTS 1) Confidentiality & Disclaimer 10) Exterior Photos 2) Executive Summary 11) Interior Photos 3) Investment Highlights 12) Tenant Profile 4) Property Overview 13) Maps 5) Aerial 14) Location Overview 6) Site Plan 15) Demos 8) Property & Building Description 16) Contact Information 9) Floor Plans

3 CONFIDENTIALITY & DISCLAIMER CONFIDENTIALITY & DISCLAIMER The information contained in the following Offering Memorandum is proprietary and strictly confidential. It is intended to be reviewed only by the party receiving it from The Boulder Group and should not be made available to any other person or entity without the written consent of The Boulder Group. This has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. The Boulder Group has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. The information contained in this has been obtained from sources we believe to be reliable; however, The Boulder Group has not verified, and will not verify, any of the information contained herein, nor has The Boulder Group conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein.

4 EXECUTIVE SUMMARY EXECUTIVE SUMMARY The Boulder Group is pleased to exclusively market for sale a single tenant net leased, Class A office/education building tenanted by Brown Mackie College (NASDAQ: EDMC) located in South Bend, Indiana. The 47,537 square foot Brown Mackie College office building was built in 2009 on a 6.08 acre parcel along a primary east-west thoroughfare in South Bend. Brown Mackie College is owned by Education Management Corporation. Education Management Corporation is a publicly traded company on the NASDAQ (EDMC) with a market capitalization in excess of $600 million. Goldman Sachs owns 43% of EDMC. The lease is fully guaranteed by Education Management Corporation with over five years of lease term remaining in the primary term. The Brown Mackie College property is ideally located in the heart of the South Bend combined statistical area that has a total population in excess of 720,000 residents. There are over 230,000 people living within seven miles of the property earning average annual household incomes of approximately $60,000. The University of Notre Dame is located less than two miles to the west of the subject property. Notre Dame is one of the country s premiere universities with approximately 12,000 students. The property is located just off of the signalized intersection of West Douglas Road and Grape Road. Grape Road is the dominant retail corridor in the trade area and home to many of the nation s largest retailers as well as University Park Mall. University Park Mall is an 820,000 square foot mall located less than a mile north of Brown Mackie College and is owned by Simon Property Group. The mall is anchored by Macy s, JCPenney, Sears, and Barnes & Noble. Other notable retailers in the immediate vicinity include SuperTarget, Walmart Supercenter, Sam s Club, Meijer, Whole Food s, Kohl s, Lowe s, and Home Depot. The Brown Mackie College property will benefit from the extension and rerouting of Douglas Road that recently was completed. Douglas Road now begins at the Indiana Toll Road from the west and runs all the way through town. This improvement will allow traffic exiting the toll road to have direct access to the property that is three miles to the east of the exit. The Brown Mackie College in South Bend offers courses in the fields of nursing, healthcare & wellness, business & technology, and veterinary technology. The Brown Mackie College is well positioned for future success in the South Bend market due to the strength and prominence of the local health care industry. Healthcare and education are the two driving forces and leading employers in the South Bend region. Memorial Health System is the largest employer in the area and in 2012 merged with Elkhart General Hospital to form the Beacon Health System.

5 EXECUTIVE SUMMARY EXECUTIVE SUMMARY Brown Mackie College is a system of for-profit colleges located in the United States. The colleges offer bachelor s degrees, associate degrees and certificates in programs including early childhood education, information technology, health sciences and legal studies. Brown Mackie is owned and operated by Education Management Corporation. Education Management Corporate is a publicly traded company that trades on the NASDAQ (EDMC) with a market capitalization in excess of $600 million. EDMC has 110 campuses throughout the United States and Canada and over 120,000 enrolled students. There are over five years remaining on the Education Management Corporation (NASDAQ: EDMC) guaranteed lease that expires in August This triple-net lease has two 5-year renewal options with rental escalations in each option.

6 INVESTMENT HIGHLIGHTS INVESTMENT HIGHLIGHTS Lease is guaranteed by Education Management Corporation, a publicly traded company (NASDAQ: EDMC) with a market capitalization in excess of $600 million Located less than two miles from the University of Notre Dame Centrally located within the South Bend-Mishawaka area and within the dominant Grape Road retail corridor Class A upscale office building that was recently constructed in 2009 Two 5-Year renewal options with rental escalations Triple-net lease with no landlord expenses The recent extension and rerouting of Douglas Road (2013) greatly enhances the properties access Located one and a half hour drive from Chicago Located less than a quarter mile from Interstate 80/90, both of which travel from coast to coast (Interstate 80: New York City to San Francisco, Interstate 90: Boston to Seattle) Brown Mackie College offers courses in the fields of nursing, healthcare and wellness, which has it well positioned for future success in the South Bend market due to the strength and prominence of the local healthcare industry Goldman Sachs owns 43% of Education Management Corporation

7 PROPERTY OVERVIEW PROPERTY OVERVIEW Price: $9,188,900 Cap Rate: 10.00% Rent Schedule: NOI Escalation Date $918,890 $940,500 8/17/2019 (Option 1) $1,039,500 8/17/2024 (Option 2) Renewal Options: Two 5-Year Lease Commencement Date: August 17, 2009 Lease Expiration Date: August 16, 2019 Tenant: Brown Mackie College Guarantor: Education Management Corporation Stock Symbol: EDMC (NASDAQ) Year Built: 2009 Lease Type: NNN* Building Size: 47,537 SF Land Size: 6.08 acres Floors: Three *Tenant is responsible for the payment of Operating Expenses. Operating Expenses shall be any and all expenses incurred by landlord in connection with the operating, maintenance, replacement and repair of the building and its operating systems, including the roof, plumbing, electrical, HVAC, elevators, and escalators. Land can charge a management expense (not to exceed (5%) five percent).

8 AERIAL AERIAL N INDIANA TOLL TOAD miles DISTRIBUTION CENTER

9 SITE PLAN SITE PLAN N DOUGLAS ROAD

10 PROPERTY & BUILDING DESCRIPTION PROPERTY & BUILDING DESCRIPTION Building Type: Constructed: 2009 Building Size: Site Size: Parking Spaces: 528 Roof: Building Envelope: Structure: Fire Protection: Electrical System (Total Service): Interior Ceiling: HVAC: Single Tenant Three Story Office 47,537 SF 6.08 acres Ballasted Membrane Stucco / Concrete Block Steel Frame, Concrete Block & Brick Façade ESFR Sprinkler System 1600 AMP, 480/277 Volt, Three-Phase, Four-Wire Electric Switchgear From Transformer Acoustic Tile Rooftop Heating & Air Conditioning

11 FLOOR PLANS FLOOR PLANS - FIRST FLOOR

12 FLOOR PLANS FLOOR PLANS - SECOND FLOOR

13 FLOOR PLANS FLOOR PLANS - THIRD FLOOR

14 EXTERIOR PHOTOGRAPHS EXTERIOR PHOTOGRAPHS

15 INTERIOR PHOTOGRAPHS INTERIOR PHOTOGRAPHS

16 TENANT PROFILE TENANT PROFILE Brown Mackie College is a system of for-profit colleges located in the United States that was established in The colleges offer bachelor s degrees, associate degrees, and certificates in programs including early childhood education, information technology, health sciences and legal studies. Website: Locations: 28 Campuses Enrollment: 17,000+ Students Established: 1892 Guarantor: Education Management Corporation (NASDAQ: EDMC) Education Management Corporation is a Pittsburgh-based operator of private sector post-secondary educational institutions in the United States and Canada that was founded in EDMC is owned in part by Goldman Sachs, which has a 43% stake in the company. Education Management Corporation currently operates 110 schools through its four higher education systems; Brown Mackie College, Argosy University, The Art Institute, and South University. EDMC schools offer online and campus-based programs at the doctorate, master s, bachelor s, associate, and certificate level. Website: Stock Symbol: NASDAQ: EDMC Market Capatilization: $675 Million Enrollment: 120,920 Students Locations: 110 Campuses Employees: 23,000 Headquarters: Pittsburgh, PA

17 MAPS MAPS

18 LOCATION OVERVIEW LOCATION OVERVIEW South Bend, Indiana is the county seat of St. Joseph County on the St. Joseph River near its southernmost bend, from which it derives its name. As of the 2010 census, the city had a total population of 101,168 residents and a combined statistical area of 721,296. It is the fourth largest city in Indiana and the economic and cultural hub of the Michiana region. South Bend is located approximately 90 miles east of Chicago and is approximately 20 miles from the nearest shore of Lake Michigan. Healthcare, education, and small business are the driving forces behind the South Bend economy. The University of Notre Dame is home to approximately 12,000 students and over 5,000 employees. It is one of the top employers in the area. Health care is another major contributor to the South Bend economy. Memorial Health System is the largest employer in the city. In 2012, Memorial announced that it was merging with Elkhart General Hospital to form Beacon Health System. AM General, Crowe Horwath, Martin s Super Markets, and Schurz Communications all have their corporate headquarters in South Bend. Other notable businesses include Honeywell, Bosch, Woodwind & Brasswind,and PEI Genesis. Efforts are underway to spur economic growth in South Bend. The St. Joe Valley Metronet is a not-for-profit organization attempting to create a more robust telecommunications infrastructure capable of inexpensive high-speed data transmission. This will bring more high tech firms to the city and surrounding area. In 2012, Kiplinger s Personal Finance ranked South Bend high in its rankings of the Ten Best Cities for Cheapskates.

19 DEMOGRAPHIC COMPARISON REPORT DEMOGRAPHIC COMPARISON REPORT Population 3-mi 5-mi 7-mi Total Population 68, , ,477 Total Households 27,256 61,850 89,559 Income Median Household Income $39,017 $38,576 $40,056 Average Household Income $58,417 $57,924 $58,126

20 CONTACT INFORMATION CONTACT INFORMATION 666 Dundee Road, Suite 1801 Northbrook, IL Randy Blankstein President Jimmy Goodman Partner