DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
2002 Lelaray Street, Colorado Springs, CO 80909
CONFIDENTIAL OFFERING MEMORANDUM
TABLE OF CONTENTSI. Executive Summary
II. Property Description
III. Tenant Overview
IV. Market Overview
V. Comparables
VI. Financial Analysis
JARED MAY
Associate
+1 719 471 6050
BRAD T. BIRD
Vice President
+1 719 471 6077
Contact Information:
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
© 2017 CBRE, Inc. All Rights Reserved.
EXECUTIVE SUMMARYDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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THE OFFERING:CBRE is pleased to offer for sale this premier, NNN, stabilized
investment asset in Colorado Springs. With long-term
leases in place, this offering provides qualified investors the
opportunity to own DaVita’s pre-eminent dialysis center in
Colorado. Co-tenanted with a Azura vascular care center,
2002 Lelaray is a unique investment asset in Colorado’s most
attractive medical market.
List Price: $7,500,000
Cap Rate: 6.25% year-one NOI
6.80% year-five NOI
Tenants: DaVita Dialysis
Azura Vascular Care
Lease Terms: 10-Years NNN
Building Size: 18,604 SF
Acres: 2.72
Year Built / Renovated: 2001 / 2017
STABILIZED, LONG-TERM LEASES
INVESTMENT HIGHLIGHTSTENANTS
DAVITA DIALYSIS +
AZURA VASCULAR CARE
NNN LEASE CLOSE PROXIMITY TO TWO PRIMARY HOSPITALS
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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FINANCIAL HIGHLIGHTS
DAVITA
Current Term: 10 Years 9/1/2017 – 8/31/2027
Current Term Base Rent $3,018,443.90
Annual Escalations: 2%
SF: 12,486 sf (67.11%)
Year-1 Lease Rate: $24.00 PSF + NNN
Year-1 NOI: $286,800.83
Year-5 NOI: $310,442.44
Renovation: 2014
Renewal Options: (3) 5-Year Options:
Notes: This location is featured in DaVita’s
national marketing materials. It is a 40
station unit, one of their largest in the
country. DaVita recently purchased
the largest private, multi-specialty
physician groups in the market and is
actively expanding services rendered
in the market through this location,
including home peritoneal dialysis
and home hemodialysis through this
center.
AZURA VASCULAR CARE
Current Term: 9.5 Years 2/13/2017 – 2/28/2027
Current Term Base Rent $1,892,434.28
Annual Escalations: 3%
SF: 6,118 sf (32.89%)
Year-1 Lease Rate: $27.00 PSF + NNN
Year-1 NOI: $165,078.00
Year-5 NOI: $185,796.75
Renovation: 2017
Renewal Options: (2) 5-Year Options:
Notes: Azura signed a new lease in 2017
and has spent nearly $1,000,000
improving their facilities, including the
ongoing $200,000 renovation for the
vascular access facility accreditation
that will be completed in Q1 2018.
Azura has selected this site as a long-
term investment location and has
committed considerable resources to
the site.
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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PROPERTY DESCRIPTIONDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
PROPERTY FACTS
Property Address 2002 Lelaray Street,
Colorado Springs, CO 80909
Year Built 2001
Total Building Area 18,604 SF
Parking 100 Spaces (5.37/1,000 RSF - above market average)
Land Area 2.72 Acres
PROPERTY DESCRIPTION
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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SITE PLAN
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
PROXIMITY TO HOSPITALS
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
2 MILES
NOT TO SCALE
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
PIKES PEAKPIKES PEAK
DOWNTOWNCOLORADO SPRINGS
DOWNTOWNCOLORADO SPRINGS
WALMARTWALMART
PATTY JEWETT GOLF COURSEPATTY JEWETT GOLF COURSE
N UNION BLVDN UNION BLVD
DaVita Dialysis & Fresenius Vascular Care Center
LELARAY STREET
LELARAY STREET
PALMER PARK BLVD
PALMER PARK BLVD
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
MARKET OVERVIEWDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
COLORADO SPRINGS OVERVIEW
Colorado Springs sits at the base of Pikes Peak, one of the
most famous mountains in America. The city’s 2016 estimated
population is 678,000 and has a growth projection of 743,000
by 2020 (Colorado Springs Economic Development Corp.).
Although Colorado Springs has a small-town ambience,
the city covers 194.7 square miles, making it Colorado’s 2nd
largest city and the 40th largest city in the nation.
Colorado Springs enjoys more than 300 days of annual
sunshine, drawing over six million visitors annually.
Surrounded by nature in the middle of a metropolitan area,
outdoor enthusiasts enjoy the city’s bike trails, open spaces
and world-class ski resorts. Colorado Springs has numerous
arts and cultural venues. Other main attractions include
Garden of the Gods, the United States Air Force Academy,
Pikes Peak Highway and Summit House, Royal Gorge
Bridge and Park, the Pikes Peak International Hill Climb, the
Pikes Peak Marathon and the Hot Air Balloon Classic. The
city hosts some of the state’s most exclusive resort hotels,
including the historic Broadmoor Resort, the Cli� House and
the Cheyenne Mountain Resort.
Colorado Springs
40th largest US city
TOP METRO AREA TO START A BUSINESS, CNBC 2016
MOST AFFORDABLE CITIES, FORBES 2015
TOP 5 PLACES FOR OUTDOOR LOVERS, MONEY MAGAZINE 2015
NO. 5 BEST PLACE TO LIVE, US NEWS & WORLD REPORT 2016
NO. 2 BEST CITY TO BE A TECH WORKER, SMART ASSET 2015
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
EDUCATION
Colorado Springs schools are exceptional, with both
public and private options that combine the latest in
creative and innovative teaching methods. Colorado
Springs School District #20 is a major district servicing
over 24,000 students in 34 schools throughout the
area. With 20 elementary schools, 7 middle schools,
7 high schools and 3 charter schools, the district is
known to be one of the highest performing school
districts in the state.
Higher education institutions include University of
Colorado at Colorado Springs – the fastest-growing
college in the state, Pikes Peak Community College –
a two-year university with three locations in Colorado
Springs, Colorado College – a private four-year
university, as well as Colorado Technical University,
Regis University, Nazarene Bible College and the Air
Force Academy. Four public school districts serve
the area, Academy School District No. 20, Cheyenne
Mountain School District No. 12, Colorado Springs
School District No. 11, and Falcon School District
No 49. The average education level for residents of
Colorado Springs goes well beyond high school, with
nearly 45 percent attaining an advanced degree.
Other higher education and professional development opportunities
throughout the Metro Denver area include:
*(approximate enrollment based on 2016 school websites)
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
ECONOMY & EMPLOYMENT
Colorado Springs has a balanced, diverse economic base. Key industries are aerospace,
defense, clean technology, healthcare, higher education and information technology.
Medical devices, semiconductors, aerospace parts, electronics and special plastics
are but a few products manufactured here and sold around the world. Amateur sports
governing bodies and organizations based in Colorado Springs include the Olympic
Training Center and the United States Olympic Committee Headquarters. National
nonprofit organizations, ranging from Junior Achievement to the Space Foundation, have
also located their headquarters in the Pikes Peak region.
Colorado Springs current unemployment rate is 2.8% (April 2017), nearly a 20-year low.
Employment grew by 2.9% in 2016, with the economy adding approximately 8,000 new
jobs. According to Moody’s Analytics, the Colorado Springs GDP grew 3.0% in 2016, and is
projected to approach 4.0% growth in 2017 and 2018.
The cybersecurity and healthcare industries are taking center stage in Colorado Springs
economic resurgence. Colorado Springs has taken advantage of its technically trained
workforce to become the epicenter of the burgeoning cybersecurity industry in the state
and country. The new National Cybersecurity Center assist businesses and governmental
agencies with computer security threats while the Air Force Academy’s Cyberworx center
helps local colleges and businesses improve their cybersecurity skills. Additionally,
several new hospitals are either planned, under construction, or being renovated. These
include the $110M Children’s Hospital campus in northern Colorado Springs, the new 52-
bed UCHealth Grandview Hospital adjacent to the University of Colorado campus, and
the $100M expansion to the Penrose St Francis Medical Center Campus adjacent to the
recently built VA Hospital in Western Colorado Springs.
Colorado Springs top private employers include:
» Lockheed Martin Corporation
» Progressive Insurance Company
» The Broadmoor Hotel Hotel/Resort
» United Services Automobile Association
» Verizon Business Software
» Atmel Corporation
» Northrop Grumman Corporation
» Compassion International
» Colorado College
» Comcast
» Hewlett Packard Enterprise
» T. Rowe Price
» Oracle America, Inc.
» DuPuy Synthes Companies
» Harris Corporation
(Colorado Springs Regional Business Alliance, 2016)
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
TENANT OVERVIEWDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
DaVita Inc., a Fortune 500® company, is one of the
nation's largest and most innovative healthcare
communities, leveraging a passion for and
commitment to clinical excellence and improving
patients' health and quality of life.
As an operating division of DaVita, DaVita Kidney
Care focuses on setting worldwide standards for
clinical, social and operational practices in kidney
care. From raising awareness of the silent epidemic
that is chronic kidney disease to providing industry-
leading, no-cost diet- and health-management
resources to people diagnosed with it, DaVita
Kidney Care continues its pursuit to keep people
o� dialysis as long as possible—and to improve
access to treatment and quality of life for those
who do need dialysis.
TENANT SUMMARY
Tenant Name Total Renal Care (Davita corp. guarantee)
Rentable Square Feet 12,486
Pro Rata Share of Building 67.11%
Lease Commencement June 25, 2001
Lease Expiration August 31, 2027
Current Lease Term Start Date September 1, 2017
Website www.davita.com
BASE RENT*
Lease Years Annual Rent Monthly Rent Annual Rent/SF
1 $299,664.00 $24,972.00 $24.00
2 $305,657.28 $25,471.44 $24.48
3 $311,770.43 $25,980.87 $24.97
4 $318,005.83 $26,500.49 $25.47
5 $324,365.95 $27,030.50 $25.98
6 $330,853.27 $27,571.11 $26.50
7 $337,470.34 $28,122.53 $27.03
8 $344,219.74 $28,684.98 $27.57
9 $351,104.14 $29,258.68 $28.12
10 $358,126.22 $29,843.85 $28.68
*Corporate Guaranty
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
Azura Vascular Care (FVC) is wholly-owned by and
affiliated with the world’s largest provider of dialysis
services and products, Azura Medical Care North
America, recognized and respected as the premier
national leader in freestanding interventional
outpatient centers. Their board certified physicians
are specialists in dialysis access management
and innovators in the field of minimally invasive
therapies for a number of medical conditions. They
are committed to improving quality of life for their
patients with high quality healthcare that is readily
accessible, utilizes the latest technology, reduces
avoidable hospitalizations, and meets the needs of
the communities they serve.
TENANT SUMMARY
Tenant Name Azura Vascular Care
Rentable Square Feet 6,118
Pro Rata Share of Building 32.89%
Lease Commencement February 13, 2017
Lease Expiration February 28, 2027
Website www.Azuravascularcare.com
BASE RENT
Lease Years Annual Rent Monthly Rent Annual Rent/SF
1 $165,078.00 $13,756.50 $27.00
2 $170,030.34 $14,169.20 $27.81
3 $175,131.25 $14,594.27 $28.64
4 $180,385.19 $15,032.10 $29.50
5 $185,796.74 $15,483.06 $30.39
6 $191,370.65 $15,947.55 $31.30
7 $197,111.77 $16,425.98 $32.24
8 $203,025.12 $16,918.76 $33.21
9 $209,115.87 $17,426.32 $34.20
10 $215,389.35 $17,949.11 $35.23
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
COMPARABLESDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
DAVITA DIALYSIS &
AZURA VASCULAR CARE CENTER
2002 LELARAY STREET
COLORADO SPRINGS, CO 80909
Rentable Square Feet 18,604 SF
Year built 2001
Sales Price Market
Tenant DaVita, Azura
Cap Rate Market
Price / SF Market
NOI (YR-5) $509,966
NOI / SF $27.41
AZURA MEDICAL CARE
1012 HAYES AVENUE
LA JUNTA, CO 81050
Rentable Square Feet 5,112 SF
Year built 2016
Sales Price $4,071,057
Tenant Fesenius
Cap Rate 5.92%
Price / SF $796.37
NOI $227,944
NOI / SF $44.59
DAVITA DIALYSIS
1750 PIERCE STREET
LAKEWOOD, CO 80214
Rentable Square Feet 13,852 SF
Year built 1985
Sales Price $5,030,000
Tenant DaVita
Cap Rate 6.17%
Price / SF $3,63.12
NOI $310,351
NOI / SF $22.40
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
AZURA DIALYSIS CENTER
1001 RIVERSIDE DRIVE
NASHVILLE, TN 37206
Rentable Square Feet 8,790 SF
Year built / Renovated 1966 / 2015
Sales Price $4,405,500
Tenant Azura
Cap Rate 6.10%
Price / SF $501.19
NOI $268,739
NOI / SF $30.57
DAVITA DIALYSIS
4805 PEARL ROAD
CLEVELAND, OH 44109
Rentable Square Feet 8,767 SF
Year built / Renovated 1960 / 2014
Sales Price $2,010,000
Tenant DaVita
Cap Rate 6.23%
Price / SF $229.27
NOI $125,193
NOI / SF $14.28
AZURAMEDICAL CARE
300 NORTH 1ST STREET
VINCENNES, IN 47591
Rentable Square Feet 8,488 SF
Year built / Renovated 2003 / 2015
Sales Price $3,795,477
Tenant Azura
Cap Rate 6.15%
Price / SF 447.15
NOI $233,422
NOI / SF $27.50
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
FINANCIAL ANALYSISDAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
*estimated
You are solely responsible for independently verifying the information in this Memorandum. ANY RELIANCE ON IT IS SOLELY AT YOUR OWN RISK.
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10*
JUN-17 JUN-18 JUN-19 JUN-20 JUN-21 JUN-22 JUN-23 JUN-24 JUN-25 JUN-26
Base Rental Revenue $470,818.43 $475,464.57 $486,686.88 $498,185.10 $509,966.16 $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01
Expense Reimbursement Revenue
~CAM $38,181.92 $39,136.47 $40,114.88 $41,117.75 $42,145.70 $43,199.34 $44,279.32 $45,386.30 $46,520.96 $47,683.99
~Insurance $6,419.00 $6,579.48 $6,743.96 $6,912.56 $7,085.37 $7,262.51 $7,444.07 $7,630.17 $7,820.93 $8,016.45
~Management Fee $11,400.00 $11,685.00 $11,977.13 $12,276.55 $12,583.47 $12,898.05 $13,220.50 $13,551.02 $13,889.79 $14,237.04
~Real Estate Taxes $26,278.68 $26,935.65 $27,609.04 $28,299.26 $29,006.75 $29,731.91 $30,475.21 $31,237.09 $32,018.02 $32,818.47
~Utilities $42,172.40 $43,226.71 $44,307.38 $45,415.06 $46,550.44 $47,714.20 $48,907.05 $50,129.73 $51,382.97 $52,667.55
~Total Reimbursement Revenue $124,452.00 $127,563.30 $130,752.38 $134,021.19 $137,371.72 $140,806.01 $144,326.17 $147,934.32 $151,632.68 $155,423.49
Operating Expenses
~CAM $(38,181.92) $(39,136.47) $(40,114.88) $(41,117.75) $(42,145.70) $(43,199.34) $(44,279.32) $(45,386.30) $(46,520.96) $(47,683.99)
~Insurance $(6,419.00) $(6,579.48) $(6,743.96) $(6,912.56) $(7,085.37) $(7,262.51) $(7,444.07) $(7,630.17) $(7,820.93) $(8,016.45)
~Management Fee $(11,400.00) $(11,685.00) $(11,977.13) $(12,276.55) $(12,583.47) $(12,898.05) $(13,220.50) $(13,551.02) $(13,889.79) $(14,237.04)
~Real Estate Taxes $(26,278.68) $(26,935.65) $(27,609.04) $(28,299.26) $(29,006.75) $(29,731.91) $(30,475.21) $(31,237.09) $(32,018.02) $(32,818.47)
~Utilities $(42,172.40) $(43,226.71) $(44,307.38) $(45,415.06) $(46,550.44) $(47,714.20) $(48,907.05) $(50,129.73) $(51,382.97) $(52,667.55)
~Total Operating Expense $(124,452.00) $(127,563.30) $(130,752.38) $(134,021.19) $(137,371.72) $(140,806.01) $(144,326.17) $(147,934.32) $(151,632.68) $(155,423.49)
Net Operating Income $470,818.43 $475,464.57 $486,686.88 $498,185.10 $509,966.16 $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01
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DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10*
JUN-22 JUN-23 JUN-24 JUN-25 JUN-26
Base Rental Revenue $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01
Expense Reimbursement Revenue
~CAM $43,199.34 $44,279.32 $45,386.30 $46,520.96 $47,683.99
~Insurance $7,262.51 $7,444.07 $7,630.17 $7,820.93 $8,016.45
~Management Fee $12,898.05 $13,220.50 $13,551.02 $13,889.79 $14,237.04
~Real Estate Taxes $29,731.91 $30,475.21 $31,237.09 $32,018.02 $32,818.47
~Utilities $47,714.20 $48,907.05 $50,129.73 $51,382.97 $52,667.55
~Total Reimbursement Revenue $140,806.01 $144,326.17 $147,934.32 $151,632.68 $155,423.49
Operating Expenses
~CAM $(43,199.34) $(44,279.32) $(45,386.30) $(46,520.96) $(47,683.99)
~Insurance $(7,262.51) $(7,444.07) $(7,630.17) $(7,820.93) $(8,016.45)
~Management Fee $(12,898.05) $(13,220.50) $(13,551.02) $(13,889.79) $(14,237.04)
~Real Estate Taxes $(29,731.91) $(30,475.21) $(31,237.09) $(32,018.02) $(32,818.47)
~Utilities $(47,714.20) $(48,907.05) $(50,129.73) $(51,382.97) $(52,667.55)
~Total Operating Expense $(140,806.01) $(144,326.17) $(147,934.32) $(151,632.68) $(155,423.49)
Net Operating Income $522,037.38 $534,406.20 $547,080.21 $560,067.27 $571,760.01
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
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AFFILIATED BUSINESS DISCLOSURECBRE, Inc. operates within a global family of companies with many subsidiaries and
related entities (each an ³Affiliate²) engaging in a broad range of commercial real
estate businesses including, but not limited to, brokerage services, property and
facilities management, valuation, investment fund management and development.
At times different Affiliates, including CBRE Global Investors, Inc. or Trammell Crow
Company, may have or represent clients who have competing interests in the same
transaction. For example, Affiliates or their clients may have or express an interest
in the property described in this Memorandum (the ³Property²), and may be the
successful bidder for the Property. Your receipt of this Memorandum constitutes
your acknowledgement of that possibility and your agreement that neither CBRE,
Inc. nor any Affiliate has an obligation to disclose to you such Affiliates¹ interest or
involvement in the sale or purchase of the Property. In all instances, however, CBRE,
Inc. and its Affiliates will act in the best interest of their respective client(s), at arms¹
length, not in concert, or in a manner detrimental to any third party. CBRE, Inc. and
its Affiliates will conduct their respective businesses in a manner consistent with the
law and all fiduciary duties owed to their respective client(s).
CONFIDENTIALITY AGREEMENTYour receipt of this Memorandum constitutes your acknowledgement that (i) it is
a confidential Memorandum solely for your limited use and benefit in determining
whether you desire to express further interest in the acquisition of the Property, (ii)
you will hold it in the strictest confidence, (iii) you will not disclose it or its contents
to any third party without the prior written authorization of the owner of the Property
(³Owner²) or CBRE, Inc., and (iv) you will not use any part of this Memorandum in any
manner detrimental to the Owner or CBRE, Inc.
If after reviewing this Memorandum, you have no further interest in purchasing the
Property, kindly return it to CBRE, Inc.
DISCLAIMERThis Memorandum contains select information pertaining to the Property and
the Owner, and does not purport to be all-inclusive or contain all or part of the
information which prospective investors may require to evaluate a purchase of the
Property. The information contained in this Memorandum has been obtained from
sources believed to be reliable, but has not been verified for accuracy, completeness,
or fitness for any particular purpose. All information is presented ³as is² without
representation or warranty of any kind. Such information includes estimates
based on forward-looking assumptions relating to the general economy, market
conditions, competition and other factors which are subject to uncertainty and
may not represent the current or future performance of the Property. All references
to acreages, square footages, and other measurements are approximations. This
Memorandum describes certain documents, including leases and other materials,
in summary form. These summaries may not be complete nor accurate descriptions
of the full agreements referenced. Additional information and an opportunity to
inspect the Property may be made available to qualified prospective purchasers.
You are advised to independently verify the accuracy and completeness of all
summaries and information contained herein, to consult with independent legal and
financial advisors, and carefully investigate the economics of this transaction and
Property¹s suitability for your needs. ANY RELIANCE ON THE CONTENT OF THIS
MEMORANDUM IS SOLELY AT YOUR OWN RISK.
The Owner expressly reserves the right, at its sole discretion, to reject any or all
expressions of interest or offers to purchase the Property, and/or to terminate
discussions at any time with or without notice to you. All offers, counteroffers, and
negotiations shall be non-binding and neither CBRE, Inc. nor the Owner shall have
any legal commitment or obligation except as set forth in a fully executed, definitive
purchase and sale agreement delivered by the Owner. PMStudio_August2017
JARED MAY
Associate
+1 719 471 6050
BRAD T. BIRD
Vice President
+1 719 471 6077
Contact Information:
DAVITA DIALYSIS & AZURA VASCULAR CARE CENTER
2002 Lelaray Street, Colorado Springs, CO 80909