6300 WEST BY NORTHWEST West By Northwest

Transcription

1 6300 WEST BY NORTHWEST HOUSTON, TEXAS EXECUTIVE SUMMARY West By Northwest

2 Property: 6300 West by Northwest 6300 West by Northwest Blvd. Houston, TX Net Rentable Area: 148,689 SF Land Area: Acres (398,757 SF) Number of Tenants: 4 Occupancy: 100.0% WALT: 4.3 Years Year Built: 1997 % Office Finish: 24.4% (36,345 SF) Clear Height: 24' Column Spacing: 40' X 40' Truck Court Depth: 118' - 130' Loading: Rear Load Building Depth: 200' West By Northwest

3 INVESTMENT HIGHLIGHTS PREFERRED SUBMARKET FOR INSTITUTIONAL INVESTORS Northwest Houston continues to be the most popular submarket for institutional investors due to its infill nature and barriers to entry, and has seen incredible leasing activity in the past three years with over 6.3 million square feet of absorption and a very low average vacancy rate of 4.6%. The low vacancy rate helps drive market rent growth and perpetuate strong occupancy throughout an investor s hold period. Major property owners in the Northwest submarket include: EXCEPTIONAL HISTORICAL PERFORMANCE & LONG-TERM OCCUPANCY 6300 West by Northwest has had the benefit of long-term continuous ownership by only two owners since its delivery, and upon further examination of the Property s historical performance it is easy to see why this has been such a coveted property for so long. Looking beyond the excellent location, the performance of the northwest submarket and its barriers to entry, and the superb functionality and demand for the type of infill product that 6300 West by Northwest represents, the Property has an impressive track record as demonstrated by its annual NOI growth and average long-term occupancy. NOI at the Property has averaged an impressive 3.5% annual growth rate since 2010 while strong tenant demand has helped the property maintain average occupancy of 97.7% since AVERAGE ANNUAL PHYSICAL OCCUPANCY YTD Actual 100.0% 100.0% 100.0% 84.0% 100.0% 100.0% 100.0% AVERAGE OCCUPANCY: 97.7% Sources: Owner History 1 & CoStar 2 Parker School Uniforms West By Northwest

4 INVESTMENT HIGHLIGHTS INFILL LOCATION WITH HIGH BARRIERS TO ENTRY Houston is rapidly becoming more land constrained, and West by Northwest is located in an area with high barriers to entry given rising land costs and very little (most cases none) opportunity for new development. Investors can expect an increasing demand for this Project due to the short supply of available land tracts suitable for meeting modern industrial development specifications. An inability to develop competing industrial properties nearby will continue to provide upward pressure on rental rates during the hold period. Parker School Uniforms STRONG IN-PLACE INCOME BACKED BY CREDIT TENANCY 6300 West by Northwest is currently 100% leased with an income stream that is backed by a diversified rent roll with 100% of the Property s contractual income derived from tenants outside of the oil and gas industry. Farmer Bros. and Patterson Veterinary who lease a combined 33.4% of the project, carry company or parent company credit ratings of Baa1/BBB+ or better. On average, the four tenants currently in occupancy at the Property have an average tenure of 6.6 years, while the average remaining lease term is 4.3 years. HIGHLY FUNCTIONAL WITH LOW OFFICE FINISH 6300 West by Northwest was designed to meet the needs of the tenant base found within the surrounding micro markets. As Houston has grown, so has the demand for this type of product. Specifications include ideal building depths, efficient loading, low office finishes, high density of dock doors, ESFR sprinklers, and concrete tilt-wall construction. In addition, the average clear height of 24 is ideal for the average suite size of 37,216 square feet and tenants seeking high-pile functionality. Suite Office SF Warehouse SF Total SF Office % High Pile 100% HVAC Parker School Uniforms ,634 43,455 67, % Y N Farmer Bros ,208 21,968 24, % Y N Dyson Corporation 600 4,808 27,192 32, % N N Patterson Veterinary 800 5,695 19,905 25, % Y Y Total 36, , , % 78.5% 17.2% Farmer Bros. Co West By Northwest

5 INVESTMENT HIGHLIGHTS LEADING SUBMARKET FUNDAMENTALS The Northwest industrial submarket is one of the oldest in Houston, serving some of the city s most historic trade routes and comprising the largest base of Warehouse and Flex space. Driven primarily by its desirable proximity to modern thoroughfares and an expansive population in the immediate area, the Northwest submarket is a leader in property fundamentals, being among the top submarkets in the city as measured by occupancy, absorption and rental rates. The Northwest industrial submarket absorbed more than 1.0 million square feet of industrial space over the last 12 months accounting for more than 20% of the total citywide industrial absorption during that time period. In the second quarter of 2016, the Northwest submarket absorbed over 222,000 square feet of space. The average warehouse rental rate for the Northwest submarket was the third highest in the Houston metro area ($6.86 PSF), just behind the Southwest submarket ($7.77 PSF) and the North submarket ($7.05 PSF). Despite delivering 20.7 million square feet of new product over the last 10 years, the submarket has maintained occupancy in excess of 93.8% during that time, with an average occupancy of 95.3%. 5-STAR LOCATION WITH SUPERIOR REGIONAL ACCESS West by Northwest Industrial Park is strategically positioned just inside the southeast corner of Beltway 8 and Hwy 290, which has become the center of gravity for the industrial market and one of the most coveted industrial locations in the Houston MSA this is due to its close and central proximity to major employment centers, some of the city s fastest-growing master-planned communities and population nodes, and major transportation corridors. With numerous points of ingress/egress, the Property offers convenient access to Beltway 8 (Sam Houston Tollway) and US 290 via W. Little York, Hempstead Highway, and Gessner Road providing tremendous mobility throughout every major trade area in the city. Over 200,000 cars travel through the Beltway 8 / US 290 intersection per day on either thoroughfare. The Property is centrally located and in close proximity to some of the City s fastest growing master-planned communities including Bridgeland, Towne Lake, Ventanna Lakes, Vintage Park, Firethorne, and Cinco Ranch just to name a few a critical distinction for this Property given the increasing demand for properties with last-mile fulfillment capabilities. There are a number of dense developments in close proximity such as Cypress Town Center, and the Cypress Outlets to the Northwest and Memorial City Mall to the South. Explosive residential growth is expected to continue fueling the demand for traditional brick and mortar retail, as well as B2B trade West By Northwest

6 INVESTMENT HIGHLIGHTS RESILIENT OVERALL INDUSTRIAL MARKET Houston s industrial market continues to show signs of positive momentum heading into Q3 2016, and booming petrochemical business expansion coupled with record high activity at the Port of Houston puts Houston in a very favorable position to see continued gains within both the local economic base and the industrial marketplace. Occupancy remained stable at 94.4% in the second quarter, and asking rents for flex ($9.44 PSF NNN) and warehouse ($6.18 PSF NNN) are among the highest rates in the city s history. Having added over 2.4 million square feet of warehouse space in Q alone, the market has seen a significant increase of over 10.5 million square feet in warehouse space in the past year. The industrial market absorbed almost 740,000 square feet during Q2 2016, for a total of over 5.0 million square feet over the last 12 months. Despite weakness in the upstream oil and gas sector which has seen 28,800 manufacturing and mining job losses over the last 12 months ending June 2016 petrochemical, third-party logistics, and consumer/population-driven warehouse demand remains very robust. Farmer Bros. Co. LIGHT INDUSTRIAL MARKET OPPORTUNITY The light industrial market provides a unique investment opportunity within the overall industrial market due to the sector s fragmented ownership, increasing tenant demand, lack of new supply and strong rental rate growth potential. Fragmented Ownership The light industrial market accounts for 63% of the 8.9 billion square foot industrial investment market in the U.S. Given the overall size of the market, light industrial ownership is highly fragmented across institutional investors, REITS, and owner/ users. Limited Institutional Ownership Institutional investors have focused their attention on the bulk distribution submarket given that sector s larger investment sizes. Many institutional investors are pursuing new Class A product, so older Class B product provides an opportunity to achieve more attractive yields. Last Mile of Logistics Chain The majority of light industrial demand is generated by national/international firms that need smaller warehouse spaces to serve their end consumers. Diversification of Tenancy Light industrial tenants consist of international, national, regional and local companies across a wide variety of industry sectors. In addition, the average light industrial tenant size reduces ownership s exposure to any single-tenant. Limited Capital Expenditures Low office-finish and flexible, reusable design result in limited tenant improvements and capital expenditures, thereby maximizing cash-on-cash yields. Lack of New Supply Light industrial is less susceptible to over-supply from new construction relative to bulk distribution, as infill locations are substantially built-out and in-place rents do not support new construction in most markets. Strong Rental Rate Growth Potential Rents in many markets remain well below peak rents. The combination of strong tenant demand, coupled with limited new supply, will drive rent growth in the coming years West By Northwest

7 NN INVESTMENT HIGHLIGHTS CBD THE GALLERIA W TIDWELL RD ALAMO CROSSING HEMPSTEAD HIGHWAY BLALOCK ROAD US WEST BY NORTHWEST WEST BY NORTHWEST BLVD West By Northwest

8 L A W F O R D L A N E INVESTMENT HIGHLIGHTS R O S P R I M W E S T B Y N O R T H W E S T B O U L E V A R D Suite 800 Patterson Veterinary Logistics Supply, Inc. detention pond Suite 600 Texas Dyson Nuts Corp. and Bolts (Texas Nuts and Bolts ) Suite 400 Farmer Brothers Suite 100 Parker Uniform detention pond B E E M A N W A Y Parker School Uniforms West By Northwest

9 PROPERTY OVERVIEW LOCATION MAPS Jones Rd y Eas tex Gessner Rd Frw BELTWAY Spencer Rd Windfern Rd MONTGOMERY Lake Houston State Park Fairbanks N Houston Rd The Woodlands ExxonMobil Corporate Headquarters 8 LIBERTY 69 Grand Pkw y Rodney Ray Blvd 6300 WEST BY NORTHWEST W HARRIS W Little York Rd Brittmoore Rd d y Lake Houston He Okanella Rd Pkw Tanner Rd 69 m Gessner Rd Gran Sam Houston Pkwy 6300 WEST BY NORTHWEST ed Rd ps te ad Hollister Rd George Bush Intercontinental Airport Greenspoint os ork Guhn Road op ey Fisher Rd Pr Littl Rd Tidwell Rd wy Fr y Sheldon Reservoir o aum Be North George Bush Park Downtown Westchase Westheimer Rd The Galleria way Westpark Toll y rw tf es hw t ou Sout S FORT BEND Texas Medical Center h Barbour s Cut Terminal Galveston Bay Pk wy Sam Houston Tollway nd Clay Rd Loop William P. Hobby Airport Gu lf South Frwy Be Frwy San Jacinto Bay Pasadena Frwy 69 wy Fr Fort n East Baytow Loop East Loop Energy Corridor West Loop Katy Frwy Pinemont Dr y w nt H Campbell Rd Frw Road st rth we y Toll Hard rth No No Armand Bayou Park Bayport Terminal Clear Lake Smithers Lake Proposed Grand Pkwy BRAZORIA GALVESTON West By Northwest

10 NN PROPERTY OVERVIEW PORT NORTHWEST BONDESSEN BUSINESS CENTER WEST SAM HOUSTON TOLLWAY PROLOGIS JERSEY VILLAGE WEST BY NORTHWEST INDUSTRIAL PARK US 290 HEMPSTEAD HIGHWAY WEST BY NORTHWEST BUSINESS PARK WEST BY NORTHWEST BLVD 6300 WEST BY NORTHWEST West By Northwest

11 INVESTMENT SALES RUSTY TAMLYN, CCIM, SIOR Senior Managing Director T. (713) FOR DEBT INQUIRIES COLBY MUECK Managing Director T. (713) TRENT AGNEW Director T. (713) JOHN ROGERS Real Estate Analyst T. (713) HFF HOUSTON 9 Greenway Plaza, Suite 700 Houston, Texas T. (713) F. (713) hfflp.com Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker (HFF) HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on HFF has been engaged by the owner of the property [properties] to market it [them] for sale. Information concerning the property [properties] described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change West By Northwest