EFTA Document EFTA01419432

American Medical Properties Investment Teaser June 2016 rom For Key Client Partner Clients or U.S. Institutional Investors. Not for Retail Distribution EFTA01419432 CONFIDENTIAL INVESTMENT OPPORTUNITY INVESTMENT American Medical Properties LLC ("AMP" or the "Company") is being formed for the purpose of acquiring highquality hospital and related healthcare real estate assets throughout the United States. The proceeds from the Offering will be used primarily to acquire hospital properties in AMP's near- term identified pipeline. The Company expects to acquire over $750 million of hospital and related healthcare real estate assets before seeking to IPO in the next 24 months. An investment in AMP is intended to provide investors with a target annual dividend yield above 8.0% and the potential for capital appreciation over time. OFFERING SUMMARY Format: Private capital raise Offering size: $300 - $400 mm of equity Sponsor: Use of proceeds: Target leverage: To acquire high-quality hospital and related healthcare real estate throughout the U.S. Up to 60% American Medical Properties LLC Target current yield: 8%+ (within 12 months of capital deployment) DIFFERENTIATED STRATEGY TO GENERATE INCREMENTAL VALUE American Medical Properties intends to leverage its unique real estate and healthcare expertise and long-standing relationships to acquire high-quality hospital real estate assets in off- market transactions and maximize risk-adjusted returns. AMP has the unique ability to help operators improve the quality, efficiency and profitability of hospitals through clinical and operational improvements including physician recruitment and the addition of new specialties and service lines. This will enhance the overall profitability of the hospitals resulting in attractive rent yields with stronger credit tenants which increases real estate asset values. Additionally, the management team brings together physician relationships, deep understanding of the healthcare sector, ability to navigate the regulatory environment and differentiated perspective on the business and science of medicine to partner with and support hospital operators. NEAR-TERM ACTIONABLE PIPELINE AMP's management has strong long-standing relationships with a diverse group of hospital operators and physicians. AMP will capitalize on its relationships to acquire high-quality assets in private, off-market transactions. As part of the sale and leaseback structures, AMP will also provide capital to hospital operators to expand their EFTA01419433 hospital campus footprint through the development of excess real estate to generate incremental returns. AMP's strong network of relationships has already translated into a significant near-term pipeline of —$2 billion of sale and leaseback opportunities across 35 assets representing —8,000 beds and 11 high-quality for profit and not-for-profit operators diversified across United States. The Company expects to complete $750+ million of acquisitions over the next 18-24 months. American Medical Properties will capitalize on its unique real estate and healthcare expertise and long-standing relationships to acquire attractive, off-market hospital real estate assets and maximize risk-adjusted returns EFTA01419434 CONFIDENTIAL THE OPPORTUNITY The healthcare industry supports favorable industry fundamentals that will drive long-term demand for hospitals, the largest healthcare real estate asset class. AMP provides a unique opportunity to invest in an experienced management team with unique real estate and healthcare expertise and long-standing relationships. The investment thesis is driven by a number of factors including: FAVORABLE INDUSTRY FUNDAMENTALS • Aging U.S. population and increasing longevity are direct drivers of the growth in the healthcare real estate market • Hospitals are the largest component of total healthcare spending (-32%) today and hospital spending is expected to grow by 75% over the next 10 years • Hospitals are the largest real estate asset class and are underrepresented in public healthcare REIT portfolios with only —3% of the -5,000 hospitals in the U.S. owned by REITs SEASONED MANAGEMENT TEAM • Proven track record of investing capital and generating attractive returns across healthcare and real estate sectors • Mark Karlan, President and CEO, has demonstrated his strengths in real estate through acquiring more than 100 real estate assets with a gross asset value exceeding $10 billion and he has over 32 years of experience across various positions including Executive Managing Director at CBRE Global Investors, President and Founder of CBRE's Strategic Partners Asia fund II and President and CEO of Investment Corp, a publicly traded REIT Imperial Credit Commercial Mortgage • Dr. Pejman Salimpour, Chief Strategy Officer, and Dr. Pedram Salimpour, Chief Medical Officer, are accomplished physicians and healthcare entrepreneurs who have founded, operated and successfully exited several healthcare companies and they have over 28 and 23 years of healthcare experience, healthcare company management including hospital operations and DIFFERENTIATED STRATEGY • Unique healthcare clinical and operational expertise to drive incremental value by improving the quality, efficiency and profitability of hospital operations • AMP will provide capital to hospital operators to expand their hospital campus footprint through the development of excess real estate to generate incremental returns LONG-STANDING RELATIONSHIPS WITH HIGH-QUALITY OPERATORS • High-quality for-profit and not-for-profit operators diversified across the United States will provide an ongoing source of off-market sale and leaseback opportunities NEAR-TERM ACTIONABLE PIPELINE • —$2.0 billion identified pipeline with —8,000 beds owned by a geographically diverse group of operators EFTA01419435 • Pipeline represents 35 hospitals, many of which have excess real estate for potential development • Expect to complete $750+ million of hospital real estate investments over the next 18-24 months ATTRACTIVE BUSINESS MODEL • Use of prudent leverage of up to 60% LTV on acquisitions • Deliver predictable cash flows with a stable dividend yield exceeding 8.0%, coupled with capital appreciation over time by increasing rents and asset values with a potential REIT IPO exit Management will leverage their experience to deploy capital prudently, increasing hospital real estate asset values and creating long-term value for shareholders EFTA01419436 CONFIDENTIAL RISK MANAGEMENT STRATEGIES Considerations Mitigants Healthcare Reform and Changes in Government Reimbursement Tenant Concentration Competition • The Affordable Care Act's increased healthcare coverage yields additional patient volume and revenue for hospitals • Any changes to the Affordable Care Act will likely have a limited impact given that they may be offset by changes in federal Medicaid and other healthcare subsidies • American Medical Properties has a diversified pipeline across operators and geographic markets • The majority of AMP's healthcare REIT competitors are focused on other healthcare real estate asset classes (senior housing/SNFs/MOBs) and hospitals are not a focus area. As a result, the hospital real estate asset class presents one of the most compelling sale/lease back opportunities. Higher Interest Rates • Interest rates are projected to increase gradually and only modestly in the near term • AMP has the flexibility to utilize alternative capital sources Tenant Solvency • AMP plans to continuously monitor the performance of its tenants on a variety of metrics including: • admission levels and surgery/procedure volumes by type • trends in revenue and patient mix • operating margins • ratio of tenant's operating margins to total fixed costs • the effect of evolving healthcare regulations on tenant's profitability and liquidity • These factors will help AMP identify any potential issues with any of its tenant's capability to pay rent allowing AMP to take remedial actions to mitigate this risk EFTA01419437 CONFIDENTIAL NOTICE TO RECIPIENTS The information herein is believed to be reliable and has been obtained from sources believed to be reliable, but we make no representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of such information. In addition we have no obligation to update, modify or amend this communication or to otherwise notify a recipient in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. We therefore strongly suggest that recipients seek their own independent advice in relation to any investment, financial, legal, tax, accounting, or regulatory issues discussed herein. Analyses and opinions contained herein may be based on assumptions that if altered can change the analyses or opinions expressed. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument, credit, currency rate or other market or economic measure. Furthermore, past performance is not necessarily indicative of future results. 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Financial instruments that may be discussed herein may not be suitable for all investors, and potential investors must make an independent assessment of the appropriateness of any transaction in light of their own objectives and circumstances, including the possible risks and benefits of entering into such a transaction. By accepting receipt of this communication the recipient will be deemed to represent that they possess, either individually or through their advisers, sufficient investment expertise to understand the risks involved in any purchase or sale of any financial instrument discussed herein. If a financial instrument is denominated in a currency other than an investor's currency, a change in exchange rates may adversely affect the price or value of, or the income derived from, the financial, and any investor in that financial instrument effectively assumes currency risk. Prices and availability of any financial instruments described in this communication are subject to change without notice. Securities and investment banking activities in the United States are EFTA01419438 performed by Deutsche Bank Securities Inc., member NYSE, FINRA and SIPC, and its broker-dealer affiliates. Lending and other commercial banking activities in the United States are performed by Deutsche Bank AG, and its banking affiliates. This offering summary is highly confidential. It is being delivered to a limited number of sophisticated prospective investors to assist them in determining whether they have an interest in the proposed investment described herein (the "Investment") and is solely for their internal use. You may not reproduce or distribute this offering summary, in whole or in part, and you may not disclose any of the contents of this offering summary to anyone without the prior written consent of Deutsche Bank Securities Inc. as placement agent for American Medical Properties LLC (the "Placement Agent"), other than to persons you have retained to advise you in connection with the offering summary. You may not use any information herein for any purpose other than considering the Investment. By accepting delivery of this offering summary, you expressly agree to the foregoing and expressly agree to maintain the disclosed information contained in this offering summary in confidence. Deutsche Bank Securities Inc. 60 Wall Street, New York, NY 10005 Abhinay Poonja Director Real Estate, Gaming & Lodging Investment Banking Tel: (212) 250-3894 [email protected] Sava Kobilarov Director Healthcare Investment Banking Tel: (212) 250-5036 [email protected] EFTA01419439 CONFIDENTIAL NOTICE TO DEUTSCHE BANK POTENTIAL INVESTORS This document is intended for discussion purposes only and does not create any legally binding obligations. When making an investment decision, you should rely solely on the final documentation relating to the transaction and not the summary contained herein. Key Client Partners ("KCP") services are offered to a select group of Deutsche Bank Wealth Management ("WM") clients who are able to meet certain criteria including, without limitation, financial and sophistication qualifications. All Key Client Partners opportunities may not be available in all WM locations. 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