CS1031 Morganton MOB, DST

Stable, Long-Term Net Leased Health Care Investment – 15-year net lease, Fixed rent escalations of 10% every 5 years. Bio-Medical Applications of North Carolina, Inc . (the “Tenant”) owns 106 dialysis facilities in North Carolina caring for 7,247 patients with 2,345 certificated dialysis stations as of June 3, 2016 according to The North Carolina Semiannual Dialysis Report, as issued by the North Carolina Department of Health and Human Services on July 1, 2016. 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”), 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 The North Carolina Division of Health Services Regulation (the “Division”) granted a CON for the Property. The CON application by Fresenius, and official issuance of the CON by the Division, reflects an exceptional commitment to the Property by both Fresenius and the North Carolina health regulator. Also, a CON is required for any new dialysis facilities or proposed closure of existing facilities. No CON may be issued without the Division finding that the application supports the public need (duplication of services weighs against granting a new CON). The CON system effectively creates barriers to entry from competing dialysis providers and will make it more difficult for the Tenant to leave the Property at the end of the 15-year base term because Division consent would be required. 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