Indio, California - Omni West Group

[Pages:11]Indio, California

JFK Medical Plaza

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Indio, CA

TENET HEALTHCARE CORPORATION OVERVIEW

Jones Lang LaSalle Americas, Inc., on behalf of Tenet Healthcare Corporation and its subsidiaries ("Tenet") is pleased to offer for sale the Property containing 30,224 square feet located in Indio, California and a parcel of excess land. This Property will be sold fee simple.

Tenet Financial and Utilization Highlights

In Millions

2008

2007

2006

Operating Statement Highlights

Revenues

$8,663

Operating Income / (Loss)

$300

$8,167 $260

$7,744 ($765)

Balance Sheet Highlights

Working Capital

$760

$512

(current assets less current liabilities)

Cash

$507

$572

Total Assets

$8,174

$8,393

Long Term Debt

$4,778

$4,771

Shareholders Equity

$103

$54

$1,100

$784 $8,539 $4,760

$264

Utilization Highlights (Continuing Same Hospitals)

Average licensed beds

13,398

14,355

14,366

Utilization of licensed beds

53.2%

52.5%

53.6%

Patient days 2,610,199 2,754,533 2,812,740

Admissions

527,148

555,318

561,198

Average length of stay (days)

5.0

5.0

5.0

Surgeries

361,013

388,487

399,351

Outpatient visits 3,773,459 4,021,945 4,102,587

Note 1: 2008 Utilization Highlights exclude the Coastal Carolina Medical Center and Sierra Providence East Medical Center, for which full calendar year opearing results at the beginning of the three months ended 12/31/08 were not available.

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Key Financial Highlights

? June '09: Tenet successfully completed the issuance of $925

Million in Senior Secured Notes at 8 7/8 % due in 2019, proceeds

are being used to purchase notes issued at 9 7/8% due in 2014.

? Net income attributable to shareholders of $178 Million or $0.37

per share for 1Q09, compared to net loss of $31 Million or $0.06

per share for 1Q08

The following information has been obtained from publicly available information from websites, filings with the Securities and Exchange Commission and other publicly available sources.

? Adjusted EBITDA was $276 Million for 1Q09 an increase of $61 Million or 28.4% as compared to $215M or 9.9% for 1Q08

Of significant strategic importance for Tenet is operating its hospitals

Tenet Healthcare Corporation ("Tenet") is one of the largest to position them competitively in their local environments. Tenet

publicly held healthcare companies (NYSE: THC) in the U.S. Tenet is has made capital expenditures that primarily relate to the expansion

headquartered in Dallas, Texas,

and renovation of existing

and operates 50 acute care hospitals in 12 states. Tenet's

Credit Profile

facilities, including amounts to comply with applicable laws

acute care hospitals and other facilities are organized

Moody's Corporate Credit Rating as July 16, 2009: B3

and regulations, equipment and information systems

into three regions: California, Central and Southern States;

Standard & Poor's Corporate Credit Rating a of July 16, 2009: B

additions and replacements, introduction of new medical

and two networks: Palm Beach

technologies, design and

Health Network and Miami-Dade/Broward Health Network.

construction of new buildings and various capital improvements.

Capital expenditures were $547 million, $743 million, $693 million

With approximately 57,000 employees and 13,580 licensed beds, and $578 million for the years ended 2008, 2007, 2006 and 2005,

Tenet's networks consist of clusters of acute care hospitals which respectively. Tenet continues to invest in existing and new hospitals

offer a wide variety of medical and ancillary healthcare services. which contributes to improving its growth in new admissions and

The largest concentrations of licensed beds are in Florida (26%), new physician relationships.

California (17%) and Texas (19%) as of June 2009. Each of Tenet's

hospitals offers acute care services, operating and recovery rooms, Tenet has disclosed its intent to sell certain non-core assets to increase

radiology services, respiratory therapy services, clinical laboratories financial flexibility and free up resources to invest in core operations.

and pharmacies; in addition, most offer intensive care, critical With a core operating strategy focused around meeting the needs of

care and/or coronary care units, physical therapy, and orthopedic, patients, maintaining and enhancing cooperative relationships with

oncology and outpatient services. A number of the hospitals also physicians and operating the hospitals at high standards, among

offer tertiary care services such as open-heart surgery, neonatal others, Tenet's sale of the medical office building Portfolio will enable

intensive care and neuroscience.

further focus on its core operating strategy and will mitigate the non-

core function of managing the medical office buildings.

Indio, CA

HOSPITAL OVERVIEW John F. Kennedy Memorial Hospital

John F. Kennedy Memorial Hospital was founded in 1966 by a group of physicians. Originally called Indio Community Hospital, the hospital grew from a 112-bed hospital to the 145-bed John F. Kennedy Memorial Hospital of today. A commitment to providing quality care, personalized service and a patient-centered philosophy are hallmarks of this hospital. The hospital provides a comprehensive range of health services and medical programs designed to meet the healthcare needs of the community, and offers valuable services not only to patients and families, but also to members of the community. In February 2007, HealthGrades awarded the hospital #1 Rated Provider for Joint Replacement Surgery in the Coachella Valley area for the second year in a row.

HOSPITAL NAME: John F. Kennedy Memorial Hospital HOSPITAL ADDRESS: 4711 Monroe St, Indio, CA JACHO STATUS: Accredited by the Joint Commission on Accreditation of Healthcare Organizations

Hospital Financial and Utilization Data

Gross Patient Revenue (000's) Net Patient Revenue (000's) Net Patient Revenue as % of Gross Patient Revenue Available Beds Available Bed Occ Rate Patient Days Discharges Average Length of Stay Outpatient Visits Emergency Visits Inpatient Surgeries Outpatient Surgeries Births

2008

584,608 101,475

17% 145 56% 29,541 9,560 3.09 59,240 39,803 3,289 2,353 3,099

2007

506,658 93,067 18% 145 57% 29,919 9,517 3.14 60,179 40,600 3,305 2,311 3,415

2006 2005

485,118 86,814 18% 145 58% 30,876 9,500 3.26 57,886 36,601 3,038 2,465 3,383

470,792 83,073 18% 145 57% 30,230 9,329 3.24 66,103 37,120 2,905 2,550 3,244

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Excess Land

Washington St

JFK Medical Plaza

41st Ave

Indio, CA

HOSPITAL AND PROPERTY AERIAL View Looking Northeast

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Emerald Place Apartments Bermuda Park Apartments

JFK Medical Plaza

41st Ave Excess Land

Washington St

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Indio, CA

PROPERTY OVERVIEW JFK Medical Plaza

Property Summary

The JFK Medical Plaza is a two-story, 30,224 gross square foot building centrally located in Indio, California,

approximately 10 miles east of Palm Springs. This prime Coachella Valley location has become the retirement

community of choice for many residents of the West Coast. The site is adjacent to Interstate 10, which is

the key east/west interstate connecting Phoenix to Los Angeles. Located on Washington Street, a major

four lane thoroughfare in Bermuda Dunes, the property is well situated among upper middle class housing

developments and commercial developments.

The doctors in the building are associated with

the John F. Kennedy Memorial Hospital, an established 112-bed acute care hospital facility approximately five miles southeast of the site.

JFK Medical Plaza Gross Square Feet: 30,224 Projected Year 1 NOI: $311,673

Occupancy: 83%

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Highlights

Retirement Community with Optimal Healthcare Demographics Long known for its 350 days of sunshine per year and more than 200 golf courses, the Coachella Valley has become one of the most popular retirement destinations on the west coast. This migration has led to a population of over 365,000 within a 15mile radius of the property, of which nearly 18% are over the age of 65, and this is forecasted to grow by a staggering 25% over the next five years. This very compelling trend has led to a massive inflow of senior citizens and wealth to the region, creating significant demand and activity in the area's healthcare real estate market which should continue for years to come.

Centrally Located with Excellent Accessibility The site is conveniently located less then one mile from Interstate 10, the southwest's major interstate running directly to Palm Springs and Los Angeles to the northwest and Phoenix to the southeast. There are multiple airport options in the area, including the Bermuda Dunes Airport and Palm Springs

Regional Airport, both less than 15 miles from the property. This strategically located facility serves the local community of Bermuda Dunes and Indio along with the many inhabitants of the greater Coachella Valley.

Market Focused on Healthcare with First Class Facilities The Coachella Valley offers first-class healthcare at three major hospitals, Desert Regional Medical Center, John F. Kennedy Memorial Hospital and Eisenhower Medical Center and at numerous clinics and specialty healthcare facilities such as the Betty Ford Center for chemical dependency and the Barbara Sinatra Children's Center for abused children. According to Simply Hired the Hospital industry is the industry hiring the greatest number of employees in the City of Indio.

Fee Simple Sale This property, site and certain excess land will be sold on a fee simple basis.

Indio, CA

LOCATION MAP | ECONOMIC HIGHLIGHTS | DEMOGRAPHICS

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Economic Highlights MSA: Riverside County

2009 Population: 4,162,200

2009 Total Employment: 1,161,900

2009 Unemployment Rate: 12.4%

Top 3 Largest Employers: U.S. Marine Corps Air Ground Combat Center, Loma Linda University Adventist Health Science Center, March Air Reserve Base

1 Mile

Demographics

JFK Medical Plaza

0-5 Miles 0-15 Miles

Current Year Population

117,683 346,600

Median Age % 35 to 44 Years % 45 to 54 Years % 55 to 64 Years % 65 + Years

43 years 11.4% 12.1% 10.2% 24.8%

39 years 12.1% 12.4% 9.9% 20.3%

Median Household Income $59,134

Average HH Income

$83,793

$52,318 $75,211

Indio, CA

ECONOMIC OVERVIEW Indio, CA

Overview

Indio, in Riverside County, once known as one of Southern California's most important agricultural regions has recently tuned its economic focus due to a recent flood of residential and recreational development in the area. Jobs in Riverside County, the 2nd fastest growing county in California from 2000-2003, have migrated from agrarian to service in order to support this growth. According to Simply Hired the Hospital industry is hiring the greatest number of employees in the city of Indio. The area has a total population of over 400,000, twice the number it had 1990 and three times what it had in

1980. State projections estimate that the valley's population will pass 600,000 by the year 2020 and 1.1 million by 2066.

The current population within a 15 mile radius of the building is 365,543. 52% of that population is over the age 35 and 29% of the population is older then 65. The immediate area within a five mile radius of the property has a median household income of $77,170, substantially higher then that of the US and the state of California as a whole.

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Office Market

The office market in Indio is considered part of the Inland Empire Office market which ended 1Q09 with a vacancy rate of 17.1%. The vacancy rate was up over the previous quarter. Rental rates ended the first quarter at $23.34, a slight decrease over the previous quarter. The Inland East submarket, which includes Indio, experienced similar trends in the first quarter with a vacancy rate of 16.4%, and a rental rate of $23.10.

Medical Office Market

The area's optimal economic and demographic trends have led to the development of multiple medical office facilities in the area. There are two other medical buildings within close proximity to the JFK Medical Plaza. Vacancy rates within these buildings are extremely low. Medical office leases in the market have typical terms of three to five years. Average full service rents in this market range from $27.00 to $33.00 per rentable square foot.

Rent Comparables ? JFK Medical Plaza

Address

City

72-415 Park View 73-345 Highway 111 73-321 Fred Waring Dr 47-647 Caleo Bay Dr Avenue 48 & Washington 78370 Highway 111

Palm Desert Palm Desert Palm Desert

La Quinta La Quinta La Quinta

Building Type

Medical Office Medical Office Medical Office Medical Office Medical Office Medical Office

Rent PSF

$27.00 $31.00 $33.00 $33.00 $17.00 $24.00

Rent Type

FSG FSG FSG FSG NNN NNN

Sales Comparables ? JFK Medical Plaza

Address

City

Cook St & Gerald Ford Dr 1180 N Indian Canyon Dr

Palm Desert Palm Springs

Date

Jan-07 Dec-05

SF Built / Renov Price

Price PSF

26,000 44,304

2005 1978

$10,750,000 $413.00 $9,700,000 $219.00

Indio, CA

PROPERTY DETAILS JFK Medical Plaza

Building Physical Details

Address: 41120 Washington Street Property Name: JFK Medical Plaza Number of stories: 2 Year Built: 1994 Gross Square Feet: 30,224 Rentable Square Feet: 27,699 Construction Type: Steel and wood frame Foundation: Conventional shallow pad and continuous footings Structural System: Steel columns and wood-stud bearing walls Exterior: Cement plaster veneer and dual-glazed tinted glass Roof: Single-ply roof membrane installed over insulation and a wood deck HVAC: 2 Trane self contained, aircooled, rooftop air conditioning units, 2 Raypack natural gad-fired rooftop boilers Fire/Life Safety: Fully sprinklered Elevators: One hydraulic elevator Parking Type: Surface Parking Spaces: 117 Zoning: R-3 4000 Residential

Building Description

The JFK Medical Plaza, located at 41120 Washington Street is a well kept two-story medical office building. Built in 1994, the building consists of 27,699 rentable square feet located approximately 20 minutes from the John F. Kennedy Medical Center. Main vehicular access from the north is by a driveway off Sparkey Way, while access from the south is via driveway entrance off of Washington Street. The site has surface parking accommodating 117 cars. The surrounding area includes vacant land to the north and to the west single-family residential neighborhoods.

Building Financial Details

Total Occupancy: 83% Total RSF: 27,699 3rd Party Tenant Occupancy: 83% Tenet Leaseback Occupancy: 0% In-Place Year One NOI: $311,673 Projected Year One NOI: $298,438 Market Rent PSF (FSG): $31.00

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JFK Medical Plaza ? Cash Flow

For the Years Ending

Year 1 8/2010

Year 2 8/2011

Year 3 8/2012

Year 4 8/2013

Year 5 8/2014

Year 6 8/2015

Year 7 8/2016

Year 8 8/2017

Year 9 8/2018

Year 10 8/2019

Potential Gross Revenue

Base Rental Revenue

$765,592 $830,228 $842,721 $872,175 $915,579 $920,800 $984,278 $1,029,205 $1,035,775 $1,046,919

Absorption & Turnover Vacancy (142,331) (109,091) (47,885) (63,792) (60,277) (52,325) (104,997) (71,912) (52,111) (74,973)

Scheduled Base Rental Revenue 623,261 CPI & Other Adjustment Revenue 13,315

721,137 7,697

794,836 23,704

808,383 39,531

855,302 41,701

868,475 64,783

879,281 32,402

957,293 16,297

983,664 40,452

971,946 61,595

Total Potential Gross Revenue 636,576 728,834 818,540 847,914 897,003 933,258 911,683 973,590 1,024,116 1,033,541 General Vacancy (1,700)

Effective Gross Revenue

636,576 728,834 818,540 847,914 897,003 933,258 911,683 973,590 1,022,416 1,033,541

Operating Expenses

OPEX

251,244 264,765 282,993 289,175 298,716 309,234 310,359 325,450 338,717

RE Taxes

48,196

49,642

51,131

52,665

54,245

55,873

57,549

59,275

61,054

Management Fee

25,463

29,153

32,742

33,917

35,880

37,330

36,467

38,944

40,897

345,481 62,885 41,342

Total Operating Expenses

324,903 343,560 366,866 375,757 388,841 402,437 404,375 423,669 440,668 449,708

Net Operating Income

311,673 385,274 451,674 472,157 508,162 530,821 507,308 549,921 581,748 583,833

Leasing & Capital Costs

Tenant Improvements

28,860

80,598

5,666

17,987

26,054

81,001

28,471

Leasing Commissions

10,491

25,404

916

2,910

4,214

19,028

4,604

Capital Reserve

5,540

5,706

5,877

6,053

6,235

6,422

6,615

6,813

7,018

28,444 4,601 7,228

Total Leasing & Capital Costs

44,891 111,708 12,459 26,950 36,503

6,422 106,644

39,888

7,018

40,273

Cash Flow

$266,782 $273,566 $439,215 $445,207 $471,659 $524,399 $400,664 $510,033 $574,730 $543,560

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