OFFERING MEMORANDUM. Willows on Harwin APARTMENT HOMES. Multi-Family Brokerage or License #

Transcription

1 OFFERING MEMORANDUM Willows on Harwin APARTMENT HOMES

2 offer terms and requirements EXCLUSIVE OFFERING: Willows on Harwin Apartment Homes 7637 Harwin Houston, TX LISTING BROKER: Houston Income Properties, Inc Offer Date: Submitting Offers to the Owner as Received Offering Process: Property is being offered on an "All Cash" basis to qualified purchasers. Offer Guidelines: Offers should be presented in the form of a non-binding Letter-of-Intent and must include at least: Purchase Price Earnest Money Deposit Amount Feasibility Period Description of Debt/Equity Source Closing Date Other terms and conditions particular to the buyer s investment process Summary of buyer s qualifications and evidence of financial ability to close Site Visits: All requests for additional information are to be made through the broker Principals and their representative shall please refrain from contacting any onsite personnel or residents.

3 table of contents EXECUTIVE SUMMARY 4 Investment Summary Property Information (2 pages) Location Maps (2 Pages) Property Aerial FINANCIAL ANALYSIS 10 Property Photo Actual and Pro Forma Analysis 10 Year Cash Flow Analysis Value Projection at 60 Months PROPERTY INFORMATION 14 Community Features Unit Mix with Floor Plans Neighborhood Aerial Harris County Plat Flood Map MARKET OVERVIEW 19 Primary Market Statistics Sub-Market Statistics Comparative Rental Properties Rent Comparatives Map REGIONAL HIGHLIGHTS 23 County Location Map Houston Map Houston MSA Facts Houston Economy Houston Region Local Area Information Houston Demographics Neighborhood Demographics PHOTO GALLERY 31 Property Photos (7 pages) LEGAL INFORMATION 38 Brokerage Services Information

4 investment summary PROPERTY DESCRIPTION INVESTMENT PROFILE Name: Willows on Harwin Type of Sale: Conventional Address: 7637 Harwin ASKING PRICE: No Official Asking Price City / State: Houston, TX Current NOI: $235,779 Projected NOI: $307,700 PLEASE DO NOT VISIT THE PROPERTY WITHOUT MAKING AN APPOINTMENT THROUGH THE BROKER. Property Type: 2 Story - Garden Style Apartments Current Occupancy: 100% As of No. Apt. Buildings: 5 Yr. of Construction: 1968 RUBS: Water & Trash Primary Market Area: HOUSTON Materials: Brick and Wood Number of Units: 64 Sub-Market Area: Sharpstown / Westwood Scheduled Market Rent: $53,100 / Mth Total Rentable SF: 58,784 Avg. Rent / Unit: $ Avg. Unit Size: 919 S.F. Avg. Rent / SF: $0.90 For Current and Projected NOI see analysis in the financial section EXECUTIVE SUMMARY The Willows on Harwin Apartment Community iswelllocatedjustoffthecorneroffondrenandharwinontheeasternborderofnew Chinatown in southwest Houston, Texas. The owners just completed an extensive $650,000 rehab. Some of the upgrades consisted of all new low e windows, new doors, granite countertops, faux wood blinds, black and stainless appliances, new paint, new fencing, new exterior lighting, and landscaping upgrades. The property lies in the Sharpstown area of Houston, Texas, one of the more populated areas of Houston. It is on the border of New Chinatown and the Sharpstown District, 1.5 miles north of the Houston Baptist University, which is undergoing a major expansion, and it is 2.5 miles southeast of the Westchase District one of the largest business districts in Houston. Its location is near numerous dining and entertaining venues as well as many of Houston's major employers. Unit Features Fully Equipped all Electric Kitchens, Tile Flooring, Window Coverings, Ceiling Fans, New Granite Countertops, New Stainless Steel Sinks, Decorative New Tile Backsplash, Black and Stainless Steel Appliances, Shower/Bathtub Arrangement, Ceramic Tub and Tile surround, Decorative Bathroom Mirrors, Updated Toilets, Cable Ready, Built In Microwave, Wood Cabinets, Dishwasher, Ice Maker & Garbage Disposal, Tiled Entry, (Interior appointments vary in each design) Community Amenities New Vinyl Low e Windows, Cable Available, Convenient Access to Major Transportation Arteries in the area, Easy Access to Shopping and Dining, On site Laundry Facilities, Picnic Area, Ample Open Parking and Assigned Parking. Property Information The property is being offered on an "All Cash" basis allowing for unrestricted financing options to a buyer. EXECUTIVE SUMMARY - Page 4 of 39

5 property information PRICING INFORMATION PROPERTY INFORMATION No Official Asking Price Good Upside Potential with Income Stabilization Units: Avg. Size Unit: Year Built: Electric Meter: New Loan Required Rentable Sq. Ft: 58,784 Estimated Total Collections ~ (Occupancy is {100%} as of RR) Mth. Apr T-2 Avg Apr-2017 Mar-2017 Feb-2017 Coll. $50,451 $50,410 $50,491 $48, UNIT MIX - CURRENT MARKET RENTS 919 S.F. UNIT TOTAL RENT / TOTAL RENT #UNITS NOTES SQ. FT TYPE SQ. FT. UNIT RENT PER SF Individual ,200 $750 $22,500 $1.01 Roof: Pitched - Composition & Flat ,584 $900 $30,600 $0.84 Land (Acres) Per CAD: 1.49 Upside with Continued Interior Upgrades and Income Stabilization Willows on Harwin is an excellent opportunity for an investor to purchase 64 Units with proven upside. The current owner recently completed a $650,000 rehab which included an extieror rehab and the rehab of the interiors of 42 units. The owner has easily re-leased the property to 92% post rehab. A new owner should be able to see upside with continued interior upgrades to the remaining 22 units and with continued income stabilization post rehab % ,784 $830 $53,100 $0.90 TOTAL UNITS Est. Occupancy AVG. SQ. FT. TOTAL SQ. FT. AVG. RENT/U TOTAL RENT AVG. RENT/SF Unit Mix Stats 47% 47% By Unit Type By Sq. Ft. 53% 53% EXECUTIVE SUMMARY - Page 5 of 39

6 property information PROPERTY TAX Cad# Taxing EntityRate/$100 of Value Houston ISD Harris County Port of Houston Athy Houston Comm. Colleg City of Houston SW Mgmt. Dist Tax Rate Assmt. $1,235,544 Approx. Total Tax $32,230 CONSTRUCTION FEATURES Age: 1968 Electric Meter: Individual A/C Type: Individual HVAC Water: Master Hot Water: Gas Fired Boilers Roof: Pitched - Composition & Flat Paving: Asphaltic Concrete Exterior Construction: Brick / Wood # of Stories: 2 Story - Garden Style Apartments Parking: Open No. Apt. Buildings: 5 Units / Acre: 43 Wiring (per Owner):? Plumbing (per Owner):? PROPERTY HIGHLIGHTS 1.) Offered "All Cash" Buyer to obtain new financing 2.) "B-" Grade Apartment Community 3.) The Sharpstown / Westwood apartment market is currently a stable market with occupancies in the mid to low 90 percent range for "B" and "C" class Apartments. This is attributed to the many area retail and entertaining venues that require a broad array of services as well as the dense population in the area that is drawn to these businesses for employment. The majority of the properties in the market are class "C". 4.) The Property is within 1.5 miles of Houston Baptist University 5.) Convent access to the area's major thoroughfares including Hwy-59, Westpark Toll Road, Sam Houston Tollway / Beltway 8, Loop 610, Bellaire Blvd., Westheimer Rd. and 6.) Located in one of the most populated areas of Houston, It is on a major thoroughfare with good visibility, therefore little to no advertising is needed 7.) Short commute to most of Houston's Major Employment Districts AREA HIGHLIGHTS The Willows on Harwin is located on the ever expanding border of the New Houston Chinatown District which houses the 2nd largest Indochinese population in the United States. It is home to nearly a dozen Chinese Banks along Bellaire Blvd giving it the name, Wall Street of Chinatown. It is conveniently located to the Houston Baptist University's 100 acre Campus (1.5 miles away). The Campus has been undergoing a large expansion. It s a whole development that will draw great attention to the University with a retail section, a parking garage, an office building, and a hotel and conference center. 2 miles northwest is the Westchase Business District. One of Houston's Premier Business Districts. It houses over 1500 businesses and 82,000 employees. It contains over 18 million SF of office space. 1.6 miles south is the Memorial Hermann Southwest Hospital and has been serving the area since Approximately 3.5 miles northeast is the Uptown Galleria District, One of the nation s largest business districts outside of a historic core; 14th largest business district in nation. EXECUTIVE SUMMARY - Page 6 of 39

7 location map Willows on Harwin APARTMENT HOMES EXECUTIVE SUMMARY - Page 7 of 39

8 location map Willows on Harwin APARTMENT HOMES EXECUTIVE SUMMARY - Page 8 of 39

9 property aerial Willows on Harwin APARTMENT HOMES EXECUTIVE SUMMARY - Page 9 of 39

10 Willows on Harwin APARTMENT HOMES property photo FINANCIAL ANALYSIS FINANCIAL ANALYSIS - Page 10 of 39

11 Willows on Harwin APARTMENT HOMES ACTUAL AND PRO FORMA ANALYSIS ASKING PRICE INCOME (See Income Details on the left) ACTUAL STABILIZED PRO FORMA MARKET TO DETERMINE THE PRICE Gross Scheduled Rent, Actual is {Apr T-2 Avg} Annualized N/A $637,200 $53,100 / Mo (Loss)/Gain to Lease - Pro Forma Estimated at {2%} of GSR N/A (12,744) 2% Estimated Annual Gross Potential Rental Income N/A 624,456 98% INCOME DETAILS Current Scheduled Rents (CSR) Vacancy Loss - Pro-Forma Estimated at {3%} of GSR N/A ($19,116) 3% Non-Revenue Units - Pro Formas Estimated at {1%} GSR N/A (6,372) 1% Other Losses - Pro Forma Estimated at {2%} GSR N/A (12,744) 2% $53,100 / Mo $830 / Unit $.90 / S.F. Total Annual Rental Income 527,946 {83%} of GCSR 586,224 {92%} of GSR Actual Income Used Apr T-2 Avg $50,451 Total Other Income - Includes Water & Trash RUBS Income 77,460 $1,210 / Unit / Yr 57,600 $900 / Unit / Yr Actual Income Used "Annualized" $605,406 Leased Occupancy As of % Pro forma Scheduled Rents include a {%} Rent Increase $53,100 / Mo $830 / Unit $.90 / S.F. EXPENSES AND RESERVES Fixed Expenses PROPERTY TAX DETAILS Property Taxes $32,230 $504 Unit $81,051 $1,266 per Unit 2016 Tax Rate Actual % Franchise Tax 50 $1 Unit 0 $ per Unit 2016 Assmt. Actual $1,235,544 Property Insurance 13,236 $207 per Unit 22,400 $350 per Unit Pro forma Rate Used 2016 Actual % Total Fixed Expenses 45,516 $711 per Unit 103,451 $1,616 per Unit Pro Forma Est. Post Sale Assmt. $3,107,103 Total Gross Annual Income 605,406 $50,451 / Mo 643,824 $53,652 / Mo ACTUAL PRO FORMA Post Sale Assmt. is the 2016 Assmt increased by {151%} EXPENSE, INSURANCE AND RESERVE DETAILS Actual Expense Column is Actual April 2017 Trailing 12 months, except where noted. Utility Costs Electric - (Common Area and Vacants) 2,928 $46 per Unit 3,200 $50 per Unit Water & Sewer 38,972 $609 per Unit 40,000 $625 per Unit Gas 7,352 $115 per Unit 10,620 $166 per Unit Utility Billing Service 0 $ per Unit 0 $ per Unit Est. Ins. / Unit / Yr Actual $207 Total Utility Costs 49,252 $770 per Unit 53,820 $841 per Unit Est. Reserve / Unit / Yr CMBS Loan $300 PROPERTY DETAILS Other Expenses General & Admin + Professional Fees 18,051 $282 per Unit 12,800 $200 per Unit Number of Units 64 Advertising/Marketing 3,725 $58 per Unit 1,600 $25 per Unit Avg Unit Size 919 S.F. Repairs/Maint./Make Ready Exp/Supplies (Actual includes some rehab) 112,599 $1,759 per Unit 32,000 $500 per Unit Net Rentable Area 58,784 Payroll + Burden 65,061 $1,017 per Unit 64,000 $1,000 per Unit Land {Acres} Per HCAD 1.49 Contract Services (Pest Control, Grounds, Patrol, Trash) 23,036 $360 per Unit 23,500 $367 per Unit Units per Acre Management Fees {Calculated on the Income above} 33, % 25, % Date Built / Renovated 1968 Total Other Expenses 255,659 $3,995 per Unit 159,653 $2,495 per Unit e-meter Individual Reserve for Replacement 19,200 $300 per Unit 19,200 $300 per Unit RUBS Water & Trash Total Operating Expenses 369,627 $5,775 per Unit 336,124 $5,252 per Unit Hot Water Supply HVAC Gas Fired Boilers Individual HVAC Net Operating Income $235,779 $3,684 per Unit $307,700 $4,808 per Unit FINANCIAL ANALYSIS - Page 11 of 39

12 10 year cash flow analysis HOUSTON INCOME PROPERTIES, INC. Willows on Harwin Ten Year Cash Flow Analysis UNITS: 64 SQ. FT: 58,784 Year 1 has a {0%} rent increase, see stabilized pro forma page AVG UNIT SIZE: 919 INCOME MONTHLY YEAR 1 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 Annual Market Rent Growth Rates Used 0.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Potential Income Other Income $53,100 $4,800 $637,200 $57,600 $656, $59,328 $676,005 $61, $696,286 $62,941 $717,174 $64,829 $738,689 $66,774 $760,850 $68,777 $783,676 $70,841 $807,186 $72,966 $831,401 $75,155 Gross Income Vacancy / Other Losses $57,900 $694,800 ($50,976.00) Economic Loss % Includes Bad Debt EFFECTIVE GROSS INCOME 8.0% $643,824 Annual Operating Expense Growth Rates Used EXPENSES Operating Expenses Expenses / Unit Reserve for {$300} per unit TOTAL EXPENSES Total Expenses / Unit NET OPERATING INCOME ($316,924) $4,952 ($19,200) ($336,124) $5,252 $307,700 $715,644 $737,113 ($52,505) ($54,080) 8.0% 8.0% $663,139 $683, % 3.0% $5,100 ($19,200) ($345,631) $5,254 ($19,200) ($355,424) $5,411 ($19,200) ($365,511) $5,400 $5,554 $5,711 $759,227 ($55,703) $782,004 ($57,374) $805,464 ($59,095) 8.0% 8.0% 8.0% $703,524 $724,630 $746, % 3.0% 3.0% ($326,431) ($336,224) ($346,311) ($356,700) ($367,401) $5,573 $5,741 ($19,200) ($19,200) ($375,900) ($386,601) $5,873 $6,041 $317,507 $327,609 $338,013 $348,729 $359,767 $829,628 ($60,868) 8.0% $854,516 ($62,694) 8.0% $880,152 ($64,575) 8.0% $906,556 ($66,512) 8.0% $768,760 $791,822 $815,577 $840, % 3.0% 3.0% 3.0% ($378,423) ($389,776) ($401,469) ($413,514) $5,913 $6,090 $6,273 $6,461 ($19,200) ($19,200) ($19,200) ($19,200) ($397,623) ($408,976) ($420,669) ($432,714) $6,213 $371,136 $6,390 $382,846 $6,573 $394,908 $6,761 $407,331 NOI GROWTH RATE 30.5% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.1% FINANCIAL ANALYSIS - Page 12 of 39

13 value projection at 60 months Number of Units: 64 Year Built: 1968 Roofs: HVAC System: Pitched - Composition & Flat Individual HVAC Metering: Electric: Individual Hot Water: Water, Trash RUBS Est. Occupancy at Stabilization: 97% REVENUE AND COLLECTIONS Gas Fired Boilers Total Gross Rent Potential Total Other Income Potential Estimated Gross Potential Income Vacancy/Other Rental Losses Total Estimated Gross Annual Income EXPENSES PROPERTY INFORMATION Approx. NRA: Average Unit Size: Proposed Mthly. Mkt. Rent at 60 Mths: Projection is based on the stabilized year 1 pro forma with a 3% rent and a 3% expense growth rate for years 2 thru 5 STABILIZED PRO FORMA Projected at 60 Months Post Purchase and Income Stabilization $717,174 $64,829 $782,004 ($57,374) $724,630 % of Gross Potential Income 92% 8% 0% {8%} of Gross Rent Potential {93%} of Gross Potential Income 58, S.F. $59,765 $934 / Unit $1.017 / SF Estimated Potential Value Based on Stabilized NOI of {$348,729} ( at 60 Mths Post Stabilization) Total Expenses ~ ( average Unit size is {919 S.F.} ) ($375,900) $5,873 / Unit $6.39 / SF Cap Rate Value Generated 6.25% $5,579,667 $87,182/U $94.92/SF Estimated Stabilized Net Operating Income $348, % $5,365,064 $83,829/U $91.27/SF ( at 60 Months Post Stabilization ) 6.75% $5,166,358 $80,724/U $87.89/SF FINANCIAL ANALYSIS - Page 13 of 39

14 community features Community Benefits Interior Design 2 distinct one and two bedroom floor plans to choose from, interior appointments may vary in each design. Fully Equipped Kitchen All Electric Kitchen Mini-Blinds Tile Floors Ceiling Fans Cable TV Available High Speed Internet Available Dishwasher Oven & Stove Willows on Harwin Black and Stainless Steel Appliances Bathtub/Shower Arrangement Granite Countertops Stainless Steel Kitchen Sink Garbage Disposal Pass Through Serving Bar Private Patio / Balcony Walk-In Closets PROPERTY INFORMATION Property Amenities Gazebo Easy Access to Major Thoroughfare Close to Shopping & Restaurants 2 On-Site Laundry Centers Picnic Areas Ample Surface Parking Major Grocery within 1 mile of the property Within close proximity of Major Employers Gated Community with Access Control Convenient to Area Schools Reserved Parking PROPERTY INFORMATION - Page 14 of 39

15 floor plans UNIT MIX - CURRENT MARKET RENTS #UNITS UNIT TOTAL RENT / TOTAL RENT NOTES SQ. FT. TYPE SQ. FT. UNIT RENT PER SF ,200 $750 $22,500 $ ,584 $900 $30,600 $ % ,784 $830 $53,100 $0.90 TOTAL Est. AVG. TOTAL SQ. FT. AVG. TOTAL RENT AVG. UNITS Occupancy SQ. FT. RENT/U RENT/SF PROPERTY INFORMATION - Page 15 of 39

16 neighborhood aerial Willows on Harwin APARTMENT HOMES PROPERTY INFORMATION - Page 16 of 39

17 hcad plat Willows on Harwin APARTMENT HOMES PROPERTY INFORMATION - Page 17 of 39

18 flood map PROPERTY INFORMATION - Page 18 of 39

19 primary market statistics APARTMENT MARKET STATISTICS OVERVIEW - SUMMARY HOUSTON Mar-2017 Property / Unit Information A B C D OVERALL Total # Projects 768 1, ,871 Total # Units 206, , ,155 18, ,491 Total # Units 0BR 0.20% 1.10% 0.70% 0.00% 2.00% Total # Units 1BR 16.10% 20.60% 12.50% 1.20% 50.40% Total # Units 2BR 11.30% 16.30% 11.30% 1.50% 40.30% Total # Units 3BR 1.60% 2.90% 1.80% 0.40% 6.60% Total # Units 4BR 0.00% 0.40% 0.10% 0.00% 0.60% Avg Units per Project Avg SF Total # Units Under 15, N/A N/A 15,534 Total # Units Proposed 7, N/A N/A 7,470 Occupancy A B C D OVERALL Avg Physical Occupancy 90% 92% 90% 84% 90% Avg Pre-Leased Occupancy 91% 93% 91% 85% 91% MARKET OVERVIEW A B C D OVERALL Avg Market Rent/SF Avg Market Rent/SF 0BR Avg Market Rent/SF 1BR Avg Market Rent/SF 2BR Avg Market Rent/SF 3BR Avg Market Rent/SF 4BR Avg Market Rent/Unit Avg Market Rent/Unit 0BR Avg Market Rent/Unit 1BR Avg Market Rent/Unit 2BR Avg Market Rent/Unit 3BR Avg Market Rent/Unit 4BR MARKET OVERVIEW - Page 19 of 39

20 sub-market statistics APARTMENT MARKET STATISTICS OVERVIEW - SUMMARY Sharpstown / Westwood Mar-2017 Property / Unit Information A B C D OVERALL Total # Projects N/A Total # Units N/A 6,212 16,689 2,427 25,328 Total # Units 0BR N/A 1.20% 2.30% 0.10% 3.60% Total # Units 1BR N/A 10.70% 40.10% 5.50% 56.30% Total # Units 2BR N/A 10.40% 22.20% 3.90% 36.50% Total # Units 3BR N/A 1.30% 1.90% 0.40% 3.50% Total # Units 4BR N/A N/A 0.10% N/A 0.10% Avg Units per Project N/A Avg SF N/A Total # Units Under N/A N/A N/A N/A N/A Total # Units Proposed N/A N/A N/A N/A N/A Occupancy A B C D OVERALL Avg Physical Occupancy N/A 92% 90% 76% 89% Avg Pre-Leased Occupancy N/A 96% 90% 76% 90% A B C D OVERALL Avg Market Rent/SF N/A Avg Market Rent/SF 0BR N/A Avg Market Rent/SF 1BR N/A Avg Market Rent/SF 2BR N/A Avg Market Rent/SF 3BR N/A Avg Market Rent/SF 4BR N/A N/A N/A Avg Market Rent/Unit N/A Avg Market Rent/Unit 0BR N/A Avg Market Rent/Unit 1BR N/A Avg Market Rent/Unit 2BR N/A Avg Market Rent/Unit 3BR N/A Avg Market Rent/Unit 4BR N/A N/A 1020 N/A 1020 MARKET OVERVIEW - Page 20 of 39

21 Willows on Harwin APARTMENT HOMES comparative rental properties MARKET RENTS Project Address Built # Units Avg. SF / U Avg Rent / U Avg Rent / SF Leased 1 Barrington 5959 Bonhomme $721 $ % 2 Chestnut Hill 7500 Bellerive $720 $ % 3 Coral Club 5909 Fondren $968 $ % 4 Granite Club 8990 Richmond $833 $ % 5 Highland Green 5995 All Day $960 $ % 6 Plantation Place 7900 Bellaire $999 $ % 7 Sharpstown Green 6666 Harbor Town $889 $ % 8 Summervale 9221 Pagewood $772 $ % Rent Comp Ttls / Average $858 $ % Willows on Harwin 7637 Harwin $830 $ % MARKET OVERVIEW - Page 21 of 39

22 rent comparatives map WILLOWS ON HARWIN MARKET OVERVIEW - Page 22 of 39

23 county location map Harris County is the 3rd most populous county in the nation, with more residents than 24 states Harris County Map REGIONAL HIGHLIGHTS REGIONAL HIGHLIGHTS Page 23 of 39

24 city of houston map REGIONAL HIGHLIGHTS Page 24 of 39

25 houston msa facts REGIONAL HIGHLIGHTS Page 25 of 39

26 HOUSTON ECONOMY State of the Houston Economy - The past two years have been aptly described by area economists as Hurricane Oil, with the eye of the storm centered over the energy producers and well services providers of Houston s premier energy sector. However, looking back, it appears reasonable to conclude that the worst of the downturn is now behind Houston, and the road to a steady recovery has begun. Job losses appear to have bottomed out and economic activity indices have recently turned positive. As far as a contraction in one of its key employment sectors have gone, Houston has weathered this most recent one with marked resiliency. Though Houston s energy sector was distressed by the crash in oil prices and dwindling rig activity, the remainder of the economy has retained modest levels of growth that mostly compensated for the net number of lost jobs. It is clear that favorable population growth and overall consumer strength will continue to buoy the Bayou City in the near term. Houston is an undisputed leader in international business, with ties reaching around the world. The nine-county region s geographic location provides global access for people and goods. From the Port of Houston to the Houston Airport System to a host of multi-national entities doing business around the clock, Houston is where you want to be if your business is looking to go global. More than 90 consulate offices Nineteen foreign banks, representing nine nations More than 430 companies with branches in 144 other nations More than 5,700 Houston area firms, foreign government offices and nonprofit organizations involved in international business If Houston were a country, it would rank 26th in GDP globally Multi-Family Market - The Dallas-based multifamily research firm, Axiometrics Inc. forecasts Houston apartment rent growth to reach 2 percent by the fourth quarter of The amount of new supply will recede, and job growth is expected to climb from 0.4% in October 2016 to above 1% in The increased demand from new jobs will increase the chances of the new supply being absorbed, which will mean higher rents for residents and more revenue for property owners. Developers are expected to deliver approximately 18,132 new apartment units in 2017, most expected to come online within the first half of the year, according to Axiometrics. Many of these units are being built in the Montrose/River Oaks submarket. Retail Market - The Houston retail market closed 2016 with the highest net absorption on record, reaching over 4 million sf. According to CBRE over half of this year s demand was in new development projects. During the height of the leasing cycle ( ), Houston absorbed 10.6 million sf. During the same period the market delivered 9.2 million sf sustaining occupancies at a historic high of 94.3 percent. Prime space, the target of most tenants currently in the market, is even more scarce at 98 percent occupied and tighter yet in urban trade areas. In 2017, Houston will see construction kick off more stacked power centers and the city s first two-story grocery store as land prices and availability combined with climbing construction costs play a larger role in changing the urban retail landscape. REGIONAL HIGHLIGHTS Page 26 of 39

27 HOUSTON BUSINESS The Houston The Woodlands Sugar Land Metropolitan Statistical Area (Houston MSA) consists of 9 counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller. Additional facts about the Houston region: The City of Houston is the nation s fourth largest city with a population of 2.3 million. TheHoustonregionranksfifthamongU.S.metropolitan statistical areas (MSA) with a population of 6.6 million. The Houston MSA has a gross domestic product of $525.4 billion, fourth largest in the nation. The Houston Airport System (HAS) serves 198 domestic and international destinations. ThePortofHoustonisrankedfirstintheU.S.inforeign tonnage and is the largest Gulf Coast container port. ADVANCED MANUFACTURING Houston ranked as the No. 1 City for Manufacturing in the U.S. by Forbes in Across 6,300 manufacturing establishments in the region, $80 billion dollars of products are produced annually. ADVANCED TECHNOLOGIES Houston s vibrant technology industry centers on traditional strengths in energy, medicine and aerospace. The region s innovation flows from NASA, the Texas Medical Center and three tier one universities including Rice University, the University of Houston and Texas A&M University. More than 175,850 high tech professionals call Houston home. ENERGY The Houston MSA is home to more than 4,800 energy related establishments and employs nearly a third of the nation s jobs in oil and gas extraction. The local energy industry extends from traditional fossil fuels to alternative and renewable energy. HEADQUARTERS & BUSINESS SERVICES The professional and business services sector thrives in the Houston region and employs nearly 460,000 Houstonians, representing 15.4 percent of all jobs in the region. LIFE SCIENCES Houston is the birthplace of nanotechnology and is home to the largest medical complex in the world the Texas Medical Center (TMC). Houston has more than 190 life science and biotechnology companies as well as academic partnerships; 132 cutting edge hospitals and health clinics, and the country s top research facilities. TRANSPORTATION & LOGISTICS Houston is a gateway for trade to Mexico, Canada and the enormous expanding markets of Latin America. Houston s geographic advantages and proximity to major metropolitan centers throughout the U.S. Midwest makes it an ideal venue to set up manufacturing and logistics facilities with fewer supply chain costs. REGIONAL HIGHLIGHTS Page 27 of 39

28 AREA INFORMATION WILLOWS ON HARWIN is located on the eastern border of the vibrant expanding Asian community of southwest Houston. New Chinatown is a community in southwest Houston that is roughly bounded by Fondren Road, Beechnut Street, State Highway 6, and Westpark Drive, and lies between Alief and the city of Bellaire. The borders of the community are ever expanding. The property is just a few miles from two of the most premier business districts in Houston, Galleria Uptown and the Westchase District. Also located within a short commute are the bedroom communities of southwest Houston such as Sugar Land (approximately 6 miles), Stafford (approximately 4 miles), Bellaire (approximately 2.5 miles). The area has excellent cross town access via WestPark Tollway, Fondren, S Gessner, Hillcroft, Bellaire and HWY 59 all of which are within a mile from the property allowing good access to every important business center in the Houston area, including an approximate 9 mile commute to Downtown Houston. The property's tenants have convenient access to major retail centers and numerous entertainment and dining venues as well. Employment- Due to the property's location to Beltway 8, 59 (SW Fwy.) S. Gessner, Bellaire Blvd. and the Westpark Toll Road (all are major transportation arteries of the area and Houston) most of the major employment areas of Houston are within a 5 to 45 minute commute of the property such as those listed below. New Chinatown - located within walking distance are numerous retail shops on Harwin. Along Bellaire Blvd Nearly a dozen" banks, including overseas Chinese banks and mainstream banks, are located along a less than 1 mile stretch of Bellaire Boulevard, inproximitytobeltway 8. The clientele of these banks include area residents and Asian American entrepreneurs. Houston Baptist University miles South - HBU has engaged in the first stage of a long-term initiative to increase the University s enrollment and to modernize and expand its campus facilities working on several key components of a broad campus master plan that will ultimately benefit not only the University s student body, but also the surrounding community in southwest Houston. Plans to redevelop the commercial property along the Southwest Freeway between the Bradshaw Fitness Center and Fondren Street are underway. The Pillars at HBU, is a public-private partnership supported by the city of Houston that includes a dramatic front entrance directly from the frontage road into the campus and a multi-purpose 5,000 seat arena. It s a whole development that will draw great attention to the University with a retail section, a parking garage, an office building, and a hotel and conference center. Westchase District - approx. 2 miles northwest of the property - Hosts over 1,500 businesses and 82,000 employees, 18 million square feet of office space in 97 buildings and 2.4 million square feet of retail space. 1.6 million square feet of office space under development and 186,000 square feet proposed. Major employers (employees) include MI Swaco (1,358), Chevron (750), BMC Software (1,277), Aker Solutions (1,077), Halliburton (1,700), Jacobs Engineering (2,344), CB&I (930), Affiliated Computer Services, Inc. (840), Cameron (649), and Schlumberger (621). The Galleria/Uptown District - approx. 3.5 miles northwest of the property - One of the nation s largest business districts One of the largest US business districts outside of a historic core; 14th largest business district in nation. Over 82,000 employees and 28 million square feet of office space. Home to over 2,000 companies including Fortune 500 companies Apache Corporation, BHP Billiton, Cameron International Corporation, Hines REIT, and Weatherford International, Ltd., GE Energy, Williams, GDF SUEZ Energy North America. 1.3 million square feet is under construction and $1 billion in renovations are underway. REGIONAL HIGHLIGHTS Page 28 of 39

29 houston demographics REGIONAL HIGHLIGHTS Page 29 of 39

30 neighborhood demographics REGIONAL HIGHLIGHTS Page 30 of 39

31 Willows on Harwin APARTMENT HOMES PHOTO GALLERY PROPERTY PHOTOS - Page 31 of 39

32 Willows on Harwin APARTMENT HOMES PROPERTY PHOTOS - Page 32 of 39

33 Willows on Harwin APARTMENT HOMES PROPERTY PHOTOS - Page 33 of 39

34 Willows on Harwin APARTMENT HOMES PROPERTY PHOTOS - Page 34 of 39

35 Willows on Harwin APARTMENT HOMES PROPERTY PHOTOS - Page 35 of 39

36 Willows on Harwin APARTMENT HOMES PROPERTY PHOTOS - Page 36 of 39

37 Willows on Harwin APARTMENT HOMES PROPERTY PHOTOS - Page 37 of 39

38 information on brokerage relationships Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtain financing without representing you. A broker is obligated by law to treat you honestly. IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner s agent by entering into an agreement with the owner, usually through a written listing agreement, or by agreeing to act as a subagent by accepting an offer of sub agency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner s agent anything the buyer would not want the owner to know because an owner s agent must disclose to the owner any material information known to the agent. IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer s agent anything the owner would not want the buyer to know because a buyer s agent must disclose to the buyer any material information known to the agent. IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction: (1) shall treat all parties honestly; (2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner; (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and (4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property. With the parties consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party. If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding. Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee s records. Buyer, Seller, Landlord or Tenant Date LEGAL INFORMATION Page 38 of 39

39 exclusive offering memorandum For More Information Please Contact: Jim Hurd - President - Broker jhurd@houstonincomeproperties.com Bishale Patel - Vice President Sales - Listing Broker bpatel@houstonincomeproperties.com Peter Huang - Agent phuang@houstonincomeproperties.com HOUSTON OFFICE 6363 Woodway Suite 370 Houston, TX T F Gwyn VonHeeder - Vice President Operations - Agent gvonheeder@houstonincomeproperties.com Mitul Patel - Agent mpatel@houstonincomeproperties.com AUSTIN OFFICE 912 S. CAPITAL OF TEXAS HWY Suite 360 Austin, TX T F Disclaimer: The information contained herein has either been given to us by the owner of the property or obtained from sources that we deem reliable. We have no reason to doubt its accuracy but we do not guarantee it. While the Owners and Houston Income Properties, Inc. (HIP) have no reason to believe that the information provided herein or in subsequent information updates delivered to potential purchasers hereunder contains any material inaccuracies, neitherthe Owners nor HIP nor any of the Owners or HIP's respective subsidiaries, affiliates, companies, or the officers, directors, employees, agents and representatives of any such entities, etc., make any representations or warranties, expressed or implied, as to the validity, accuracy or completeness of the information provided or to be provided, and nothing herein shall be deemed to constitute a representation, warranty or promise by any such parties as to the future performance of the Property or any other matters set forth herein. Prospective purchasers are not to construe the contents of this Offering or any prior or subsequent information communications from the Owners or any of their respective officers, employees or agents as legal, tax or other advice. Prior to purchasing, prospective purchasers should consult with their own legal counsel and personal and tax advisors to determine the consequences of an investment in the Property and arrive at an independent evaluation of such investment.