Below Market Rents = Upside Potential!417 Vance Street, Clinton, NC 28328

The statements and figures presented herein, while not guaranteed, are secured from sources we believe authoritative.Subject to prior sale, lease, withdrawal and price change without notice.

For More info & comps, contact Mark at:

Cost To Build: $2,082,000 Building ValueReplacement: $1,603,0002017 AppraisedValue: $1,570,000

Built & Opened: January 2007100% Leased Today Multi-Tenant Medical Office

3 Tenants:UNC Physicians NetworkCarolina Urology HealthcareSampson Reg Medical CTR

Gross Income: $132,009- OP Expenses $ 34,156= Net Op Income: $ 97,853= $7.84 PSF NNN Rent

Ideal medical office location in the heart of downtown Clinton near the hospital and across the street from CVS and Walgreens.

Building Size:13,634 SF RentablePer Architect Scale Plan12,476 SF Per Leases

Seller: DOC PROPS LLCParcel: #12084684001Sampson County, NC

$1,300,000 or $95 PSF or 7.5% Cap Rate100% Rented Medical Office Building

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417 Vance StreetClinton, NC 28328

Listing Broker: Mark Alexander CCIM FL Lic Real Estate Broker NC Ltd Non-resident Commercial Licensee 239-826-4174 mark@markalexanderccim.com

Co-Listing Broker:For Property ShowingsEd CarrCarr Real Estate CompNC Resident Broker206 Lisbon StreetClinton, North Carolina

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Rent Roll

Tenant Size Rent/YR PSF Exp

UNC Physicians 2,360 SF $30,845 $13.07 6-30-19

Carolina Urology 3,672 SF $36,720 $10.00 9-30-19

Sampson Medical 6,444 SF $64,444 $10.00 9-30-19

Total: 12,476 SF $132,009 $10.58 PSF Average

Gross Annual Income: $132,009- Insurance $ 2,825- Repairs $ 8,241- R E Taxes $21,167 - Utilities $ 1,923

-Total Operating Expenses: $34,156 (or $2.74 PSF)

= Net Annual Income: $97,853 or $7.84 PSF NNN

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Lease Notes:

1. UNC lease has three tenant options to renew lease for a one year term per option with no rent increases. Tenant must provide 30 day advance notice prior to lease expiration to exercise renewal options.

2. Urology lease automatically renews for one year every October 1st with no rent increase. Either party may terminate lease with a 3 month advance written notice prior to next expiration date on September 30th. A brand new 5-Ton Trane HVAC compressor was installed in this Carolina Urology suite in September 2018.

3. Sampson Regional Medical Center lease for entire second floor has no tenant option to renew lease.

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Building Recap:

Before ACA became law, Sampson Regional Medical Center (SRMC) signed a 3-Year NNN lease for the entire building in June 2009. After ACA became law in 2010, while most US hospitals started expanding in anticipation of a better bottom line, the lease for this entire building was extended for five years starting in 2013 at a rent of $150,000/YR NNN or $12 PSF NNN. In 2015 after a change of leadershipat the SRMC and the new realization that no Medicaid expansion was going to happen in North Carolina due to its new Republican Governor turning down these earmarked funds from ACA, SRMC tried to break this lease. A law suit ensued and a settlement was reached prior to trial whereby SRMC signed a new lease for just the entire second floor at a below market rent of $10 Per Square Foot Gross and this lease is due to expire September 30, 2019.

This 2nd Floor space that SRMC leased is nicely built out but remains vacant today and SRMC continues to pay their rent. The property Net Operating Income today is $97,853 per year NNN or the equivalent of $7.84 PSF NNN rental rate.

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2007: Building Constructed

Two OB/GYN physicians from nearby Fayetteville originally constructed this Clinton medical office for their own branch medical offices in 2007. A few years later,when the local hospital decided to expand, these two doctors gave up their personal offices to rent the entire building to the hospital.

Many hospitals in small rural NC towns like Clinton (where 29% of its individuals live below the poverty line), struggle financially because they provide indigent health care to many of its residents who cannot afford health care, and in so doing, cause a financial loss to their hospital system. While there has been a steady, growing demand for health care services in Clinton, Sampson Regional Medical Center in Clinton has been financially strapped and unable to update their medical equipment and expand their base of services as they would like, to meet the growing needs of their patients.

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2010: Affordable Care Act

The Affordable Care Act (ACA) was enacted into law in 2010 which included a provision of federal funds for each State to use to expand Medicaid. This gave much hope to many hospitals across North Carolina because they had a Democrat Governor named Beverly Perdue so they eagerly anticipated additional reimbursements for their indigent care. This which would finally give Sampson thefinancial means to expand, upgrade equipment/facilities and hire more staff to reach a more acceptable ratio of patents to nurses.

Many North Carolina hospitals (including SRMC in Clinton) started to expand in anticipation of higher future reimbursement income due to ACA. It was during this encouraging time that Sampson Medical Center recruited new medical groups to Clinton and helped put Vidant ENT (who eventually became UNC ENT) and Carolina Urology into the building who are still tenants here today. SRMC also used space in subject for a cardiac rehab center only to later learn that 94% of this cardiac rehab billing could not be reimbursed due to a recent change in the law. SRMC was forced to close this cardiac rehab office.

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2013: New Republican Governor

Republican Pat McCrory was elected as the new governor of North Carolina in 2013 and he promptly refused to accept federal funds available per ACA to expand Medicaid in North Carolina. Hospitals in North Carolina were hit hard by this news, especially the ones located in lowerincome communities like Clinton where they have a higher share of indigent care. Sampson Medical Center promptly tried to get out of their lease at subject property.

The refusal of federal funds to expand Medicaid in North Carolina caused much distress among NC hospital systems, many of which were in the middle of their own expansion projects like Sampson Regional Medical Center. This forced many suddenly struggling hospitals to be sold to bigger hospital systems at sizable discounts. Some hard-hit hospitals like SRMC have elected to struggle forward and remain independent in hopes that financial help may be getting closer after the coming November 2018 elections.

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2018: Sampson Regional — Sell or Stay Independent?

I found annual financials on line for the last fiscal year for Sampson Regional showing Gross Income of $178,172,899 and a net loss of $940,000. Checking on line reviews from staff who have worked here, show unhappiness with management, lower wages than other competing hospitals in the area, adverse patient to nurse ratios implying chronic under-staffing and older medical equipment in need of updating.

A local doctor recently told me that he believed one of two things mayhappen with Sampson Medical Center. He thought they would most likely be purchased by either Cape Fear Valley Medical Center of Fayetteville, UNC of Chapel Hill or Wake Med of Raleigh, all three of which who have made their interest in Clinton know recently. Otherwise, he felt Sampson Regional may continue to try and hold out as an independent with a view to seeing financial help arrive around the corner in 2019 in the form of a blue wave in the upcoming November elections, to finally expand Medicaid in North Carolina and possibly Medicare for all in 2020.

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2019: Better Times for NC Hospital Systems

So one way or another, there looks to be better times ahead for Sampson Regional Medical Center to better serve its patients and better enable them to continue their expansion plans.

The Ear, Nose and Throat group that is a tenant in the building now, was formerly known as Vidant ENT until they were purchased by UNC ENTwhich brought UNC Physicians to Clinton. After UNC Physicians bought the ENT group in the building, they have also made inquiries for further expansion in Clinton. The Seller said that Cape Fear Valley Medical Center (Fayetteville) contacted them in the last six months about expanding into Clinton to better service the health care needs of the town. Additionally, a specialty medical group from Wilmington has made recent inquiries to the subject property for a branch office to better serve the residents of Clinton.

The seller is tired of being a landlord and just wishes to focus on practicing medicine. They wish to simplify their lives. That is their reason for selling.

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Sampson Regional Medical Center

Sampson Regional Medical Center is a 146-bed hospital and health system located in Clinton, North Carolina. Accredited by The Joint Commission, our facility offers a range of medical services including acute and skilled level care, outpatient surgery, emergency and critical care, and women’s and children’s services. Specialties include general surgery, orthopaedics, obstetrics and gynecology, ophthalmology, and urology.

We also provide valuable outpatient services such as physical therapy and diagnostic imaging in state-of-the-art centers, advanced wound care with hyperbarics, home health, and a premier Health + Wellness Center 607 Beaman for hospital main campus. Hospital practices include primary care, women’s services, a pain center and urgent care.

Sampson hospital main campus and nearby branch offices include: 223 Beaman Street for Outpatient Diagnostic Center; 405 Beaman for Outpatient Rehabilitation Center; 508 Beaman for Sampson Home Health; 516 Beaman for Sampson Medical Group; 603 Beaman for Sampson Surgical Services & Sampson Women’s Center; 607 Beaman for hospital main campus; 1004 Beaman for Clinton Urgent Care and 417 E Johnson Street for The Center for Health + Wellness. See following map slide for these locations.

417 Vance StreetClinton, NC 28328

Hospital 607 Beaman Street

Diagnostic CTR 223 Beaman Street

Rehab CTR 405 Beaman Street

Home Health 508 Beaman Street

Medical Group 516 Beaman Street

Surgical & Women's Services 603 Beaman Street

Urgent Care 1004 Beaman Street

Center for Health + Wellness 417 E Johnson Street

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Hospital & It’s Branch Offices Near Subject

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417 Vance Street

Clinton, NC 28328

Sampson County

Clerk of Court

Center for Health &

Wellness

DOWNTOWNCLINTON

Eastern ENT

Sinus/Allergy

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Property Photographs

Building Front

Building Side

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Suite B Reception

Suite B Exam Room

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Suite B Lab Area

Suite B Office

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Suite 200 Reception

Suite 200 Break Room

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Suite 200 Lab

2nd Floor Common Lobby Area

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Mark Alexander, CCIMCell Phone 239-826-4174mark@markalexanderccim.com325 South Biscayne Boulevar, Suite 819Miami, Florida 33131

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Mark Alexander holds the CCIM (Certified CommercialInvestment Member) designation along with a Bachelor of Sciencedegree in Marine Engineering from the Massachusetts MaritimeAcademy on Cape Cod. He worked for Exxon as an engineer from1980 to 1986 on their ocean going oil tankers. Mark has worked full time in commercial real estate brokerage from 1986 to present. His specialty is helping doctors achieve top of market sale prices for their medical offices and surgery centers using Sale/Leaseback transactions.

Through August 2018, Alexander has sold 104 medicaloffice buildings between Florida, Georgia, South Carolina,North Carolina ,Wisconsin, Illinois and Texas.

Previously, Mark worked as National Director of Medical Office Sales for Sperry Van Ness, a national real estate company based in Irvine, California. Alexander hosted a monthly Medical Office Conference Call for 12 years where he trained company advisors coast-to-coast on how to work with doctors and list medical office sale/ leaseback transactions. Mark returned as President of his own private company in 2015 and occasionallyhosts National Medical Office Calls that are available to all commercial brokers across the US. Alexander was a panel speaker for the RealShare Healthcare Real Estate National Conference on December 2-3, 2015 in Scottsdale, Arizona. Mark moved from Fort Myers to Miami in 2014 to be near his daughter Lauren who attends college in Miami. She goes to Nursing School next year. Her goal is to become a Nurse Practitioner.

From left, Lauren, Buddy and MarkBrickell breakfast April 7, 2018