CS1031 Louisburg MOB, DST

Stable, Long-Term Net Leased Health Care Investment – 15-year double net lease, fixed rent escalations of 10% every 5 years. All cash/no mortgage debt DST offering. Bio-Medical Applications of North Carolina, Inc. (the “Tenant”) operates 106 dialysis facilities in North Carolina caring for 7,247 patients with 2,345 certificated dialysis stations as of June 3, 2016¹. A utilization rate of 156 visits per year (or 3 per week) with a 7,247 patient base translates to approximately 1,130,532 patient visits per year.

The Tenant also enjoys other financial benefits from its vertically integrated affiliates that manufacture dialyzers, medications and supplies and operate a laboratory. These related businesses generate additional revenue from sale of medications, supplies and laboratory services.

The Guarantor of the Lease is Fresenius Medical Care Holdings, Inc. (“Fresenius Medical Care Holdings”), which is Ba2 by Moody’s with a stable outlook and is a wholly-owned subsidiary of Fresenius Medical Care AG & Co. KGaA, a German partnership limited by shares (“Fresenius”). Fresenius is listed on the Frankfurt Stock Exchange (FME) and the New York Stock Exchange (FMS), and is the world’s leading provider of products and services for people with chronic kidney failure.

North Carolina is a Certificate of Need (CON) State Under North Carolina law, the NC Division of Health Services Regulation (the “Division”) is required to issue a CON before a new dialysis clinic may be opened and operated. Applying for a CON is a public process to determine if there is both sufficient demand and it would serve the public interest to open a new medical facility. Fresenius applied, and the Division issued, a CON for the property based on the Division’s determination that there is sufficient demand in the area and operation of the property would be in the public interest. This reflects an exceptional commitment to the property by both Fresenius and the Division.

The CON process creates barriers of entry to potential competitors and increases the likelihood of lease renewal since Division approval would be needed to terminate a lease and leave a property subject to a CON. Positioned for Stability Through Necessary Medical Care Fresenius provides products and services for people with chronic kidney failure, a disease that affects millions worldwide. More than 2.5 million patients regularly undergo dialysis therapy. Fresenius has completed more than 42.7 million dialysis treatments in the Americas.

1According to The North Carolina Semiannual Dialysis Report, as issued by the North Carolina Department of Health and Human Services on July 1, 2016.