Subject Property

Tenet Healthcare, Inc. D/B/A Baptist Health System School of Health Professions 8400 Datapoint Drive | San Antonio, TX 78229

Offering Memorandum

Confidentiality and Restricted Use Agreement

Stan Johnson Company10333 Richmond Ave | Suite 740 Houston, TX 77042 P: +1 832.476.3440

stanjohnsonco.com

Albert Muller Associate Directoramuller@stanjohnsonco.com TX Lic# 459937

Offered Exclusively by

This Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC.

This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.

The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title.

BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief.

Executive SummarySection One

Subject Property

Baptist Health System • San Antonio, TX 4

The Offering

Investment Highlights

Purchase Price: $12,000,000 Cap Rate: 7.50%

Strong Corporate Credit In October 2013, Vanguard Health Systems and all of its markets (including the company doing business as Baptist Health System School of Health Professions) were purchased by and became part of Tenet Healthcare Corporation. This combined Tenant credit employs more than 100,000 people in 78 hospitals and other entities in 43 states. Tenet Healthcare (NYSE: THC): Annual Sales: $18.6 Billion; Net Worth $700 Million.

Long-Term Location 10-year original lease term. Tenant executed first of four, five year options to extend.

Significant Tenant Investment Tenant has invested over $3 Million in tenant improvements.

Tremendous Location Advantage Flourishing Northwest Submarket; highly desired central location is attractive for businesses and residents, offering exceptional amenities and central location.

Dense Residential Area for Employee Retention One of the densest residential areas in San Antonio, TX; 138,000 within 3-mile radius. 245-unit Oxford at Medical Apartments to open in March 2017.

Best Performing Submarket Some of the highest rents in San Antonio, TX; high occupancy; high historical absorption.

Retail In Close Proximity Within walking distance of 140,000 SF of retail and 14+ hotels/motels within one mile.

South Texas Medical Center Location Located within the South Texas Medical Center which includes: UT Health Science Center, Audie Murphy VA Hospital, CTRC, Brooke Army Medical Center, Texas Cancer Clinic, Children’s Cancer Research Institute, Christus Santa Rosa Health System, Texas Neuroscience Institute, St. Luke’s Baptist Hospital, Methodist Healthcare System.

Hospital Gross Patient Revenue in Area Over $19 Billion in gross patient revenue in San Antonio Medical Center.

Significant VA Medical Presence Directly across the street from Audie Murphy VA Hospital and Brooke Army Medical Center.

Close Proximity to Major Employers • South Texas Medical Center: 56,000 Employees; • USAA Corporate HQ: 20,000 Employees; • Valero Energy HQ: 1,900 Employees; • University of Texas San Antonio (UTSA) 29,000 Students, 1,400 Faculty.

Stan Johnson Company is pleased to offer for sale to qualified investors this +/- 66,263 square-foot, single-tenant nurse training center facility located in San Antonio, Texas (the “Property”) and leased to Baptist Health System School of Health Professions (the “Tenant”). Located in the South Texas Medical Center, a 900-acre Medical Complex which is the home to 10 major hospitals, 80 clinics, 56,000 medical jobs servicing more than 3.4 million outpatient visits annually. This booming corridor is adjacent to the world headquarters of USAA Financial Services Company and employer of 20,000 employees. The Property was originally leased to the Tenant for a 10-year term with four consecutive option periods of five years each. The Tenant invested more than $3 million in tenant improvements during the term of the lease. The Tenant is wholly owned by Tenet Healthcare, Inc., (NYSE: THC) with over $18.6 Billion in annual sales.

The Property is prominently positioned just off of IH-10 between Loops 40 & 1604. The Property provides superior visibility and rapid metro transit connectivity to some of San Antonio’s most desirable retail corridors and residential neighborhoods.

The Property presents an investor the opportunity to purchase a stabilized asset with a demonstrable “long-term” commitment to the location. The rent is structured so as to offer a very long-term opportunity for Tenant given its location and adjacency to the South Texas Medical Center.

Property OverviewSection Two

Subject Property

Baptist Health System • San Antonio, TX 6

Lease Abstract Tenant:

VHS San Antonio Partners, LLC, D/B/A Baptist Health System School of Health Professions

Guarantor: VHS San Antonio Partners, LP

Square Footage: +/- 66,263 SF

Rent Commencement Date: January 5, 2005

Lease Expiration Date: December 31, 2020

Lease Term Remaining: Four (4) years

NOI: $903,164.00

Rent Increases: 10% every 5 years including options

Ownership Type: Fee Simple

Renewal Options: Three (3) Renewal Options, five (5) years each

Lease Type: NNN

Years Annual Rent

2016 - 2020 $903,164

2021 - 2025 (Option 1) $993,480

2026 - 2030 (Option 2) $1,092,828

Rent Schedule

Actual Property

Baptist Health System • San Antonio, TX 7

The Baptist Health System School of Health Professions evolved from a private cluster of health science schools sponsored by the Baptist Health System. The School of Nursing was the first school, chartered in 1903. Surgical Technology followed in 1955, Medical Imaging Technology in 1959, and Vocational Nursing in 1988.

Baptist Health System includes the following services and facilities:

• Five acute-care hospitals – Baptist Medical Center, Mission Trail Baptist Hospital, North Central Baptist Hospital, Northeast Baptist Hospital, and St. Luke’s Baptist Hospital

• Baptist Emergency Hospitals in convenient locations around San Antonio

• Comprehensive children’s services at North Central Baptist Hospital

• Baptist Breast Centers featuring patient navigators, genetic counseling, and leading imaging services

• School of Health Professions

• HealthLink Fitness and Wellness Center

•HealthLink Physical Rehabilitation Centers conveniently located throughout San Antonio

• San Antonio AirLIFE air medical transport service

• Baptist M&S Imaging Centers conveniently located throughout San Antonio

• Pregnancy testing centers

• Numerous affiliated MedFirst primary and specialty care clinics

• Baptist Home Health Services

Over the years the school has grown from a diploma to a degree granting institution. The first Associate of Applied Science degrees were awarded in 2009. In 2010 the school began to offer Online programs and courses. In 2012 the school was approved as a baccalaureate degree granting institution.

The School of Health Professions offers degree completion for the RN to BSN and B.S. in Healthcare Management, Associate degrees in Medical Imaging, Professional Nursing, and Surgical Technology along with diploma programs in Vocational Nursing and post professional certifications in Magnetic Resonance Imaging, Diagnostic Medical Sonography and Computed Tomography.

Tenant Overview

Actual Property

Market OverviewSection Three

Subject Property

San Antonio is the second most populous city in the state of Texas, with a population of 1,409,019. It was the fastest growing of the top 10 largest cities in the United States from 2000 to 2010, and the second from 1990 to 2000.

San Antonio hosts two of the largest military medical centers in the United States. On the civilian side of healthcare, the city is also home to a well-established community of healthcare providers recognized at both the national and global level.

San Antonio has a diversified economy with an approximately $96.8 billion metropolitan GDP, ranking 4th among Texas metropolitan areas and 38th in the United States. San Antonio’s economy is focused primarily within military, healthcare, government civil service, financial services, oil and gas and tourism sectors. Within the past twenty years, San Antonio has become a significant location for American-based call centers and has added a significant manufacturing sector centered around automobiles.

Located about 10 miles northwest of Downtown is the South Texas Medical Center, which is a conglomerate of various hospitals, clinics, and research and higher educational institutions. The city is also home to one of the largest military concentrations in the United States. The defense industry in San Antonio employs over 89,000 and provides a $5.25 billion impact to the city’s economy.

San Antonio is home to six Fortune 500 companies: Valero Energy Corp, Tesoro Corp, USAA, Clear Channel Communications, NuStar Energy and CST Brands, Inc. H-E-B, the 14th largest private company in the United States, is also headquartered in San Antonio.

Location Overview

San Antonio Skyline

San Antonio Riverwalk

Sea World

The Alamo

Baptist Health System • San Antonio, TX 10

ADVANCED PHARMACY

UNIVERSITY OF PHOENIX

ALASA FURNITURE

UT HEALTH SCIENCE CENTER: ORAL SURGERY DEPT

HEALTH CAREERS HIGH SCHOOL

METHODIST SPECIALTY AND

TRANSPLANT HOSPITAL

CHRISTUS SANTA ROSA HOSPITAL

SOUTHWEST CHILDREN’S CENTER

UT MEDICINE - MEDICAL ARTS

RESEARCH CENTER

AUDIE MURPHY VETERANS ADMIN. HOSPITAL

UT SCHOOL OF MEDICINE

METHODIST HOSPITAL & CHILDREN’S HOSPITAL

FRE

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RIC

KSB

UR

G R

D (+/- 39,738 V

PD

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I-10 (+/- 2

63

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KINDRED HOSPITAL

UIW ROSENBERG SCHOOL OF OPTOMETRY

WELLMED MEDICAL MANAGEMENT

WARM SPRINGS REHAB HOSPITAL

UNIVERSITY HOSPITAL

VA DENTAL CLINIC/OPTOMETRY

TEXAS PERINATAL GROUP

CENTENE CORPORATION - SUPERIOR HEALTH PLAN

ST. LUKE’S BAPTIST HOSPITAL

BAB

CO

CK R

D (+/- 43,297 V

PD)

SOUTH TEXAS RESEARCH FACILITY

WURZBACH R

D (+/-

43,204 V

PD)

BOB ROSS CENTER - UNIVERSITY HEALTH SYSTEM

N

Demographics 8400 Datapoint Dr | San Antonio, TX 78229 0 - 1 mi. 0 - 3 mi. 0 - 5 mi.

Population

2016 Population 21,289 139,152 366,463

2021 Population 22,702 148,191 389,181

2010-2016 Annual Rate 0.99% 0.95% 0.90%

2016-2021 Annual Rate 1.29% 1.27% 1.21%

Households

2016 Total Households 10,124 63,012 149,585

2021 Total Households 10,719 67,051 158,530

2010-2016 Annual Rate 0.81% 0.91% 0.83%

2016-2021 Annual Rate 1.15% 1.25% 1.17%

2016 Average Household Income $48,166 $58,855 $62,861

2016 Median Household Income $36,436 $42,338 $44,856

going beyond

The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.

Stan Johnson Company10333 Richmond Ave | Suite 740Houston, TX 77042P: +1 832.476.3440 | F: +1 832.476.3449

stanjohnsonco.com

Albert MullerAssociate Directoramuller@stanjohnsonco.comTX Lic. # 459937

Offered Exclusively by

11-2-2015

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LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.

Information About Brokerage Services Texas law requires all real estate license holders to give the following information about

brokerage services to prospective buyers, tenants, sellers and landlords.

.

Designated Broker of Firm License No. Email Phone

Licensed Supervisor of Sales Agent/Associate

License No. Email Phone

Licensed Broker /Broker Firm Name or Primary Assumed Business Name

License No. Email Phone

Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov IABS 1-0

Date Buyer/Tenant/Seller/Landlord Initials

Sales Agent/Associate’s Name License No. Email Phone

SJCO-Holdings, LLC 9003332 918-494-2690

James Gibson 392926 918-494-2690