Frontera Crossing. austin, texas. investment summary

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1 Frontera Crossing austin, texas investment summary Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a Texas licensed real estate broker ( HFF )

2 Frontera Crossing HFF has been exclusively retained by the Owner to offer to qualified investors an opportunity to purchase Frontera Crossing, a 163,803 square foot office building in thriving Austin, Texas. The four-story, Class A property is 88% leased and is located adjacent to the 330-acre La Frontera mixed-use development, the premier development for the North Austin/Round Rock area. Frontera Crossing, with its highly efficient floor plates and 6.0 per 1,000 parking ratio, is ideally suited for the high-density users of North Austin and Round Rock. Located at the intersection of Interstate 35 and State Highway 45, tthe Property is perfectly positioned to take advantage of Austin s population growth, particularly the booming suburbs of Round Rock, Pflugerville, Cedar Park and Leander. The Property features strong occupancy and diverse maturities, providing stable cash flow and upside through lease-up of vacant space and rollover in an increasingly strong rental rate environment. 2

3 Superior Tenancy with Upside Potential Frontera Crossing presents investors strong current cash flow from a stable 88% leased rent roll of national and regional tenants. The existing vacancy provides investors with the opportunity to immediately add value in a rapidly increasing rental rate environment. The Property is anchored by the Art Institute of Austin (Ai), which averages 1,200 students per semester at Frontera Crossing and offers classes ranging from Graphic Design to Audio Production to Culinary Arts. Ai has been in occupancy for 7 years and has invested in excess of $5.75 million in their space, including a state of the art recording studio, culinary teaching kitchen with dedicated HVAC, virtually assuring Ai s renewal at the Property. Field Asset Services, a division of Assurant, Inc. (S&P A, NYSE: AIZ) and a tenant since 2008, occupies 24% or approximately 40,000 square feet through October Beyond Ai and Field Asset Services, the balance of the Property has 5.4 years remaining and rental rates 15% below market, providing additional upside in renewing existing tenants at higher rates in an improving market. Major Tenants SF % of Property Lease Expiration Remaining Lease Term Industry Art Insitutute of Austin 77,305 47% May yrs Education Field Asset Services 39,318 24% Oct yrs Insurance/ Finance Dashiell, LLC 10,550 6% Jan yrs Engineering Micron Technology 9,130 6% Sep yrs Technology KPI Analytics 7,682 5% Jan yrs Technology/ Marketing Occupied 143,985 88% 4.3 yrs Vacant 19,818 12% Totals/Averages 163, % 3

4 Quality Asset With Above Market Parking Strong Office Fundamentals Frontera Crossing was designed with highly efficient floor plates and above market parking to appeal to the high-density users of North Austin and Round Rock. The above market parking ratio of 6.0 per 1,000 provides owners with an exceptional leasing advantage for high density users. The Property boasts an exterior patio with a secondary entrance with a secondary entrance, which is provided as an amenity to Ai. Highly efficient floor plates with a 19,818 square foot contiguous vacancy on the second floor which offers flexibility in leasing. The Property includes an 1.17-acre parcel ideally suited for retail development currently utilized for parking, offering an excellent opportunity to further amenitize the Property and add value. The Austin office market has enjoyed an extremely strong growth period, ending 2014 with average occupancy and rental rates of 91.4% and $28.39 per square foot gross, respectively. Class A space ended 2014 with an occupancy rate of 89.7% and quoted rental rates of $32.68 per square foot gross, an astounding growth rate of 11.6% since year-end 2012 or 5.8% annually. The North submarket has shown the most improvement over the past 3 years, achieving an average rental rate of $25.98 per square foot gross or 44% growth. During the same time period, occupancy has risen 5.9 percentage points to 92%. The La Frontera submarket totals approximately 880,000 square feet and outperforms the market with average occupancy and rental rates of 97.3% and $27.60 per square foot gross, respectively. Highly Visible Location with Convenient Access $31.00 RENTAL RATE AND OCCUPANCY COMPARISON 100% $ % The Property s location and visibility at the intersection of Interstate Highway 35 and State Highway 45 provides a competitive advantage with immediate access to Round Rock, Cedar Park and Austin. Additionally, the Property is in close proximity to MoPac (Loop 1), US 183 and Parmer Lane, providing convenient access to major business centers including La Frontera, The Domain, Downtown Austin, Mueller and the airport as well as corporate campuses including Dell, National Instruments, IBM, HID Global, Apple, GM and Emerson Process Management. $27.00 $25.00 $23.00 $21.00 $19.00 $ % 85% 80% 75% 70% 65% $ % North Rental Rate Austin Rental Rate La Frontera Rental Rate Austin Occupancy North Occupancy La Frontera Occupancy 4

5 Frontera Crossing austin, texas La Frontera Boardwalk Shopping Center Frontera Crossing Round Rock Gateway Outstanding Amenity Base Frontera Crossing is located across La Frontera, a 330-acre development with over 1 million square feet of office, retail hotel and multi-housing, with plans at full build-out of over 2 million square feet. The intersection of I-35 and SH-45 is home to over 2.4 million square feet of retail, providing an unmatched amenity base to the Property. La Frontera is already home to retailers such as Sam s Club and Lowe s, as well as a multitude of restaurants including Chipotle, Mongolian Grille, Chick-fil-A, Chili s, Jason s Deli, Third Base Sports Bar, Starbucks and many more. Office properties include Frontera Vista, the 265,000 square foot corporate headquarters owned and occupied by Emerson Process Management (800+ employees), the Summit at La Frontera, a 91,000 square foot, 98% leased multi-tenant property, and 301 Sundance Parkway is a 195,000-square foot building owner occupied by Texas Guaranteed Student Loan with over 600 employees. Austin Marriott North at Round Rock offers 295 rooms, 14,800 square feet of meeting space, and an upscale dining experience at River City Grille. Additionally, a Holiday Inn Express with 108 rooms is under construction on the site adjacent to Frontera Crossing. 5

6 Thriving Austin Economy ADDITIONAL INFORMATION If you have any questions or require additional information, please contact any of the individuals below. Ranked by Forbes as the Fastest Growing City in the Country and one of the Top Five Best Cities for New Jobs for the fourth year in a row, Austin continues to expand and flourish with over 30,000 new jobs in the past 12 months and over 140 new residents per day. Fueled by numerous corporate relocations and expansions, Austin is experiencing growth at twice the national pace and boasts a record setting unemployment rate of 3.7% as of January Dubbed the Silicon Hills, Austin is one of the nation s preeminent locations for technology, with more than 120,000 employees at 4,444 technology companies. Andrew Levy, Senior Managing Director, alevy@hfflp.com, Todd Savage, Managing Director, tsavage@hfflp.com, Kelsey Roop, Associate Director, kroop@hfflp.com, Patrick McCord, Senior Real Estate Analyst, pmccord@hfflp.com, West 5th Street, Suite 1200 Austin, TX USA Telephone: Facsimile: Victory Avenue, Suite 1200 Dallas, TX USA Telephone: Facsimile: RECENT MAJOR NORTHWEST CORPORATE ANNOUNCEMENTS 2015 Holliday Fenoglio Fowler, L.P. HFF (NYSE: HF) 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 offers clients a fully integrated national capital markets platform including debt placement, investment sales, advisory services, structured finance, private equity, loan sales and commercial loan servicing. Holliday Fenoglio Fowler, L.P. ( 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. Frontera Crossing 1 6 AUSTIN