Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-133652
NNN
HEALTHCARE/OFFICE REIT, INC.
SUPPLEMENT
NO. 17 DATED OCTOBER 31, 2007
TO THE PROSPECTUS DATED APRIL 23, 2007
This document supplements, and should be read in conjunction
with, our prospectus dated April 23, 2007, as supplemented
by Supplement No. 7 dated May 9, 2007, Supplement
No. 8 dated May 25, 2007, Supplement No. 9 dated
June 20, 2007, Supplement No. 10 dated July 17,
2007, Supplement No. 11 dated August 8, 2007,
Supplement No. 12 dated August 17, 2007, Supplement
No. 13 dated September 12, 2007, Supplement
No. 14 dated September 20, 2007, Supplement
No. 15 dated October 9, 2007 and Supplement
No. 16 dated October 11, 2007 relating to our offering
of 221,052,632 shares of common stock. The purpose of this
Supplement No. 17 is to disclose:
|
|
|
|
|
the status of our initial public offering;
|
|
|
|
our proposed acquisition of Tucson Medical Center in Tucson,
Arizona;
|
|
|
|
our proposed acquisition of Northmeadow Medical Center in
Roswell, Georgia;
|
|
|
|
our entry into an interest rate swap agreement in connection
with the secured loan on our 1 and 4 Market Exchange property;
|
|
|
|
our entry into an interest rate swap agreement in connection
with the secured loan on our East Florida Senior Care
Portfolio; and
|
|
|
|
our board of directors authorization of the renewal of our
advisory agreement.
|
Status of
Our Initial Public Offering
As of October 26, 2007, we had received and accepted
subscriptions in our offering for 17,719,020 shares of
common stock, or approximately $176,972,000, excluding shares
issued under our distribution reinvestment plan.
Proposed
Acquisition of Tucson Medical Center
On October 24, 2007, our board of directors approved the
acquisition of Tucson Medical Center. Tucson Medical Center is
comprised of two project portfolios with a combined total of
seven multi-tenant medical office buildings located on
10.2 acres of land on the Northwest Medical Campus in
Tucson, Arizona. The Desert Life Medical Buildings, built
between 1979 and 1980, consist of six multi-tenant contiguous
buildings that contain approximately 56,000 square feet of
gross leasable area that is currently 59.6% occupied. The
La Cholla Medical Building, built in 1994, contains
approximately 55,000 square feet of gross leasable area
that is currently 68.9% leased. The principal businesses
occupying the buildings are healthcare providers and researchers.
We anticipate purchasing Tucson Medical Center for a total
purchase price of $21,125,000, plus closing costs, from an
unaffiliated third party. We intend to finance the purchase
through a combination of debt financing and funds raised through
this offering. We expect to pay our advisor and its affiliate an
acquisition fee of $634,000, or 3% of the purchase price, in
connection with the acquisition.
We anticipate that the closing will occur in the fourth quarter
of 2007; however, closing is subject to certain agreed upon
conditions and there can be no assurance that we will be able to
complete the acquisition of Tucson Medical Center.
Proposed
Acquisition of Northmeadow Medical Center
On October 24, 2007, our board of directors approved the
acquisition of Northmeadow Medical Center. Northmeadow Medical
Center consists of a two-story multi-tenant medical office
building located across from North Fulton Regional Hospital in
Roswell, Georgia. The property was built in 1999 and contains
1
approximately 51,000 square feet of gross leasable area
located on 5.52 acres. The building is currently 98%
occupied. The principal businesses occupying the building are
healthcare providers.
We anticipate purchasing Northmeadow Medical Center for a
purchase price of $11,850,000, plus closing costs, from an
unaffiliated third party. We intend to finance the purchase
through a combination of debt financing and funds raised through
this offering. We expect to pay our advisor and its affiliate an
acquisition fee of $356,000, or 3% of the purchase price, in
connection with the acquisition.
We anticipate that the closing will occur in the fourth quarter
of 2007; however, closing is subject to certain agreed upon
conditions and there can be no assurance that we will be able to
complete the acquisition of Northmeadow Medical Center.
Entry
into an Interest Rate Swap Agreement with Wachovia Bank,
National Association
On October 12, 2007, we, through NNN Healthcare/Office REIT
Market Exchange, LLC, entered into an interest rate swap
agreement, or the Wachovia ISDA Agreement, with Wachovia Bank,
National Association, in connection with the $14,500,000 secured
loan on our 1 and 4 Market Exchange property, or the Market
Exchange loan, with Wachovia Financial Services, Inc., or
Wachovia Financial. Pursuant to the terms of the promissory note
in favor of Wachovia Financial, the Market Exchange loan bears
interest, at our option, at a per annum rate equal to either:
(a) 30-day
LIBOR plus 1.35%; or (b) the Prime Rate, as announced by
Wachovia Financial from time to time. As a result of the
Wachovia ISDA Agreement, the Market Exchange loan bears interest
at an effective fixed rate of 5.97% per annum from
September 28, 2007 through September 28, 2010; and
provides for monthly interest-only payments due on the first day
of each calendar month commencing on November 1, 2007.
Entry
into an Interest Rate Swap Agreement with KeyBank, National
Association
On October 19, 2007, we, through NNN Healthcare/Office REIT
E Florida LTC, LLC, or E Florida LTC, executed an interest rate
swap agreement, or the KeyBank ISDA Agreement, with KeyBank
National Association, or KeyBank, in connection with the
$30,500,000 secured loan on our East Florida Senior Care
Portfolio, or the EFSC loan, with KeyBank. Pursuant to the terms
of the loan agreement by and between E Florida LTC and KeyBank,
the EFSC loan bears interest, at our option, at per annum rates
equal to: (a) a rate equal to the greater of: (i) the
prime rate, as established from time to time by KeyBank, or
(ii) 1.0% in excess of the federal funds effective rate, as
defined in the loan agreement; or (b) the Adjusted LIBOR
Rate, as defined in the loan agreement. As a result of the
KeyBank ISDA Agreement, as amended on October 25, 2007, the
EFSC loan bears interest at an effective fixed rate of 6.02% per
annum from November 1, 2007 through November 1, 2010;
and provides for monthly principal and interest payments due on
the first day of each calendar month commencing on
December 1, 2007.
Authorization
for Renewal of Advisory Agreement
On October 24, 2007, our board of directors authorized the
renewal, for a term of one year ending on October 24, 2008,
of our Advisory Agreement, dated September 20, 2007, by and
among us, NNN Healthcare/Office REIT Holdings, L.P., our
operating partnership, and NNN Healthcare/Office REIT Advisor,
LLC, our advisor, which provides for management of our
day-to-day activities and those of our operating partnership as
well as other related matters. Our board of directors previously
approved the renewal of the advisory agreement on a
month-to-month basis. Pursuant to Sections 8.2 and 10.3 of
our charter, our board of directors evaluated the performance of
our advisor and determined that renewing the advisory agreement
is fair and reasonable to us and is on terms and conditions not
less favorable to us than those available from unaffiliated
third parties.
2