Texas Healthcare Portfolio II DST

Texas Healthcare Portfolio II DST

Arlington | Houston

Beneficial Interests: $55,020,466

Offering Price: $55,020,466

Texas Healthcare Portfolio II DST, also known as the Trust, a newly formed Delaware statutory trust and an affiliate of Inland Private Capital Corporation (IPC), is hereby offering (the Offering) to sell to certain qualified, accredited investors (Investors), pursuant to this Private Placement Memorandum (the Memorandum), 100% of the beneficial interests (Interests) in the Trust.

Arlington and Houston Properties

The Arlington Property comprises four surgical suites, 18 exam rooms and six EPIC rooms, which provide management of patient records electronically rather than in paper format. The Houston ASC Property is a two-story, state-of-the-art ambulatory surgery center, operating as US Pain & Spine Surgical Institute. 

INVESTMENT HIGHLIGHTS

IPC believes that an investment in the Trust offers the following benefits:

Diversified Medical Office Portfolio

• Three properties providing distinct services in growing metropolitan areas
• The Arlington Property is an outpatient surgical center and a premier ophthalmology practice
• The Houston ASC Property is a surgery center
• The Houston Hospital Property is a medical office and hospital building, with doctors providing a selection of minimally invasive surgical procedures, focused on spinal surgeries

Established Medical Tenants

• The Arlington Tenants, operating under Kleiman | Evangelista Eye Center, have had an established presence in the market for over 30 years
• Kleiman | Evangelista Eye Center has Better Business Bureau’s accredited support
• The tenants of the Houston Properties are affiliates of US Pain & Spine Institute, LLC (USPSI), an integrated healthcare delivery system focused on the specialty of interventional pain and spine

Long-Term Net Leases with Rent Growth Potential

• The Commercial Leases are “net” leases, with the tenants responsible for real estate taxes, insurance and other operating expenses
• Each Commercial Lease provides for an initial term of 15 years, with two 10-year renewal options
• Each Commercial Lease provides for annual increases in base rent
• See “Summary of the Leases” in the Memorandum

Master Lease Structure

• Master lease structure allows the master tenant to operate Properties on behalf of the Trust
• Enables actions to be taken that the Trust would be unable to take, such as a restriction against re-leasing

THE FINANCING

The Properties are being offered to Investors without the encumbrance of permanent debt. The absence of permanent debt provides the Trust the flexibility to hold or sell the Properties, without any lender restrictions, and sell at a time that maximizes value.

THE OFFERING

The Offering is designed for accredited investors seeking to participate in a tax-deferred exchange as well as those seeking a quality, multiple-owner real estate Investment. Only accredited investors may purchase Interests in this Offering. See “Summary of the Offering” and “The Offering” in the Memorandum.

PROPERTY OVERVIEW

The Arlington Property

The Arlington Property, located at 350 E. Interstate 20 in Arlington, Texas, is a 27,500 square-foot, state-ofthe-art outpatient surgical center and is the newest addition to the Kleiman | Evangelista Eye Center practice. The Arlington Property comprises four surgical suites, 18 exam rooms and six EPIC rooms, which provide management of patient records electronically rather than in paper format. 

Constructed in 2015, the Arlington Property incorporates unique design elements to support efficient patient and healthcare provider flow while offering high-quality care and comfort to patients, visitors and staff. The Arlington Property is situated on the highway frontage of Interstate 20, one of the biggest interstate freeway systems in the United States.

The Arlington Property is occupied by two tenants: Arlington Ophthalmology Association, PLLC, (Kleiman Clinic Tenant), focusing primarily on ophthalmology pertaining to diseases of the eye, anatomy and physiology; and South Arlington Surgical Providers, Inc., specializing in ambulatory surgical services. An additional entity, Lasik Management, LLC, merged with the Kleiman Clinic Tenant in 2016, and completes LASIK surgeries at the Property. The tenants are members of the Kleiman | Evangelista Eye Center (Kleiman), an established physicianowned operator with affiliated specialists, and the premier ophthalmology practice in the Arlington area for over 30 years. Kleiman maintains three locations, 10 physician providers, 11 Refractive Surgery Specialists, a LASIK coordinator and the practice served over 17,000 patients in 2015 alon

The Houston ASC Property

The Houston ASC Property is a two-story, state-of-the-art ambulatory surgery center, operating as US Pain & Spine Surgical Institute. The Houston ASC Property offers surgical services and a wide range of interventional pain procedures, including minimally invasive spine procedures. The surgical cases performed at the Property range from simple spinal cord injections to complex spine fusions. On average, more than 100 surgeries are performed each month at the Houston ASC Property.

The Houston ASC Property was originally constructed in 1994. This Property was fully renovated in 2014 in order to provide additional outpatient surgeries.

The Houston ASC Property is accredited by Accreditation Association for Ambulatory Healthcare, a leader in developing benchmarks to advance and promote patient safety, quality care, and value for ambulatory healthcare through peer-based accreditation processes, education, and research.

The Houston Hospital Property

The Houston Hospital Property, known as the Houston Hospital for Specialized Surgery, is Houston’s first hospital focusing on minimally invasive spine surgery and interventional pain practices.20

The Houston Hospital Property offers seven surgical beds with three operating rooms and supportive preoperation and post-operation areas. The Houston Hospital Property’s tenant, US Pain & Spine Hospital, LP, prides itself on employing experienced physicians, nurses, and technicians that use the latest technology and equipment and provide the highest quality care and services to its patients.

The Houston Hospital Property was originally constructed in 1993 and renovated in 2015.

ABOUT Inland Real Estate Group of Companies, Inc.

The Inland Real Estate Group of Companies, Inc. (Inland) is one of the nation’s largest commercial real estate and finance groups, representing nearly 50 years of expertise and integrity in the industry. As a business incubator, Inland specializes in creating, developing and supporting member companies that provide real estaterelated investment funds – including limited partnerships, institutional funds and nonlisted real estate investment trusts (REITs) – and real estate services for both third parties and Inland-member companies.

In March 2001, Inland Private Capital Corporation was formed to provide replacement properties for investors wishing to complete a tax-deferred exchange under Section 1031 of the Internal Revenue Code of 1986, as amended, as well as investors seeking a quality, multiple-owner real estate investment. The programs sponsored by IPC offer securities to accredited investors on a private placement basis.

Disclaimer

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