6501 WESTON CARY, NORTH CAROLINA

Transcription

1 6501 WESTON CARY, NORTH CAROLINA

2 n o.01 EXECUTIVE SUMMARY investment summary investment highlights EXECUTIVE SUMMARY 1

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4 EXECUTIVE SUMMARY THE INVESTMENT OPPORTUNITY OPPORTUNITIES TO ACQUIRE A PREMIER CLASS A OFFICE ASSET ON THE WESTON CORRIDOR ARE EXTREMELY RARE, WITH NO SUCH OFFERINGS IN THE PAST 5+ YEARS Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a North Carolina licensed real estate broker ( HFF ) is pleased to present the opportunity to purchase 6501 Weston Parkway ( the Property or 6501 Weston ), a 90.1% leased, multi-tenant Class A office building located in the flourishing Raleigh-Durham-Cary market. Comprised of 93,130 square feet of newly-renovated, institutional Class A space, 6501 Weston boasts an impressive STEM (Science, Technology, Engineering and Math) based tenant roster that is anchored by Charter Communications (NASDAQ: CHTR, $86B Market Capitalization) and Zift Solutions. Renovations to the property, which were completed in 2016, include comprehensive improvements to the lobby, elevator cabs, corridors, restrooms, on-site showers, and landscaping, in addition to the replacement of the remaining original HVAC units and implementation of a new energy management system. The renovated lobby, which includes a custom light fixture and a Soelberg stained wooden panel system, was featured in Interior Design s 2017 Spring Market Tabloid Weston is ideally-positioned along the prominent Weston Corridor, a master-planned mixed-use park that is one of Raleigh-Durham s most desired locations due to its central location, abundance of amenities, proximity to decision-maker communities, and notable tenant base. Surrounded by high-end residential communities, a dense amenity base with 100+ restaurants and shops in a three mile radius, and some of the region s top market giants, the Property offers immediate access to Interstate 40, RDU International Airport, Research Triangle Park, and three of the country s leading research universities in The University of North Carolina at Chapel Hill, Duke University, and NC State. INVESTMENT SUMMARY ADDRESS 6501 Weston Parkway Cary, North Carolina NET RENTABLE BUILDING AREA TOTAL: 93,130 SF YEAR BUILT 1996 (Renovated 2016) ACRES TOTAL: 8.52 ACRES PERCENT OCCUPIED 90.1% WEIGHTED AVG LEASE TERM 6.2 years EXECUTIVE SUMMARY 3

5 RESEARCH TRIANGLE PARK PRESTONWOOD COUNTRY CLUB RDU INTERNATIONAL AIRPORT PARK WEST VILLAGE (750K SF RETAIL / MIXED-USE CENTER) 540 CENTREGREEN OFFICE PARK FIDELITY INVESTMENTS METLIFE GLOBAL TECHNOLOGY CAMPUS LAKE CRABTREE 40 DEUTSCHE BANK UMSTEAD STATE PARK COPERNICUS RAILINC WESTON PKWY VERIZON NORWELL BLVD TO RALEIGH 6501 WESTON COTTON, INC. THE ARBORETUM AT WESTON HARRISON SQUARE SAS GLOBAL HQ THE UMSTEAD HOTEL & SPA 6501 WESTON 4

6 SECURE CASH FLOW WITH STERLING TENANT ROSTER 6501 Weston offers 6.2 years of weighted average lease term with an attractive diversified tenant roster including a fast-growing startup and two leading national corporations. 25% 34% 31% COMPUTER SOFTWARE TELECOMMUNICATION STAFFING AND TECHNOLOGY The Property is anchored by one of the largest telecommunication companies in the country, Charter Communications (NASDAQ: CHTR); one of the largest staffing companies in the world, Aerotek (a subsidiary of the Allegis Group); and one of the leading channel marketing automation software companies, Zift Solutions. Collectively, these three tenants comprise over 86% of the rent roll. Additionally, each of these tenants features brand new, open creative / collaborative buildouts that tenants in the Raleigh-Durham market are increasingly seeking in order to recruit and retain talent. Diverse tenancy, long term stability and new creative / collaborative build-outs provide ample security to prospective investors. Currently 90.1% leased with a staggered rollover schedule, 6501 Weston provides investors with the opportunity to invest in a stabilized asset and capitalize on the vacant space in a rising rental rate environment, with occupancy rates at 95% and rental rates over $25.00 per square foot for existing Class A product in the tightening Raleigh- Durham office market. Furthermore, there is a compelling future mark-to-market opportunity as existing tenants rollover, as the current in-place rental rate of $22.55 per square foot is 8% below market. EXECUTIVE SUMMARY 5

7 90.1% OCCUPIED WITH LIMITED NEAR-TERM ROLLOVER 6.2 YEARS OF WEIGHTED AVERAGE REMAINING LEASE TERM 75.6% T OF OCCUPIED SPACE LEASED O Science, Technology, Engineering, and Mathematics (STEM) based tenants the fastest growing segment of the Raleigh-Durham economy BRAND NEW CREATIVE buildouts are a real differentiator on the Weston Corridor and further enhance the building s image WESTON CORRIDOR IS HOME TO INDUSTRY GIANTS SAS, MetLife, Fidelity Investments, Deutsche Bank, Verizon, John Deere and Biologics the majority of which continue to flourish through organic growth WESTON CORRIDOR HAS EXEPERIENCED AN UNPARALLED 10 YEAR HISTORICAL OCCUPANCY OF 95.0% $120,000 AVERAGE HOUSEHOLD INCOME & 61% (CARY, with a bachelor s degree or higher NC) 6501 Weston 6

8 WESTON CORRIDOR A TRUE LIVE-WORK-PLAY LOCATION 6501 Weston is located on Weston Parkway which is widely considered to be the premier mixed-use business park in Raleigh-Durham. Weston Parkway s appeal to tenants is largely driven by the park s convenient access to a plethora of amenities and further enhanced by the large concentration of high quality residential communities that surround the park. Anchored by premier shopping areas on both ends, with the Arboretum at Weston and Harrison Square to the east and Park West Village to the west, tenants along the Weston Corridor enjoy access to over 100 restaurants and shops in a 3 mile radius. Tenants also have access to over 20 miles of walking and biking trails around Lake Crabtree and Umstead Park. As such, Weston is typically a preferred destination for decision-makers, of which many of whom live in the area s many executive communities such as Wessex and Prestonwood Country Club, a private country club that is one of the area s largest residential communities and features 54 holes of championship golf. Weston s desirable location and picturesque campus-like setting is a large reason for why many of the area s most notable corporate giants call Weston home. Noteworthy companies located in Weston includes SAS (Global HQ), MetLife (Global Technology Campus), Fidelity Investments, Deutsche Bank, Verizon, Copernicus, Cotton Inc., among many others. As such, properties along the corridor have maintained a remarkable average occupancy rate of over 95% over the past 10 years. PREMIER MIXED-USE PARK, OFFERING IMMEDIATE ACCESS TO HIGH-END RESIDENTIAL COMMUNITIES AND LUXURY APARTMENTS, CATERING TO BOTH DECISION MAKERS AND MILLENNIAL WORKFORCE (CARY #4) HOME TO CORPORATE GIANTS INCLUDING: SAS (GLOBAL HQ), METLIFE (GLOBAL TECHNOLOGY CAMPUS), FIDELITY INVESTMENTS, DEUTSCHE BANK, VERIZON, COPERNICUS, COTTON INC. DYNAMIC LOCATION FEATURING PREMIER ACCESSIBILITY AND REGIONAL CONNECTIVITY LOCATED AMONGST BIG STEM GIANTS 6501 Weston is ideally positioned in the center of the market, Weston Parkway offers unparalleled regional connectivity with immediate access to several of the Triangle s main thoroughfares, including Interstate 40 (1.0 mi), Interstate 540 (1.5 mi) and Highway 54 (0.5 mi). The location also offers exceptional proximity to many noteworthy places in the area such as RDU International Airport (5 mi) and Research Triangle Park (7 mi), along with some of the area s most affluent decision-maker communities. The Property also benefits from its access to the millenial workforce, as Cary was recently ranked #4 among cities with the most millenial homeowners. EXECUTIVE SUMMARY 7 EXECUTIVE SUMMARY RESTAURANTS AND SHOPS IN A 3 MILE RADIUS 20+ MILES OF WALKING AND BIKING TRAILS AROUND LAKE CRABTREE AND UMSTEAD PARK

9 40 LAKE CRABTREE - APARTMENTS - RESIDENTIAL THE ARBORETUM AT WESTON 6501 WESTON PARK WEST VILLAGE RICH AMENITY BASE ALONG PROMINENT WESTON CORRIDOR PARK WEST VILLAGE DINING ANOTHER BROKEN EGG BLACKFINN AMERIPUB BAD DADDY S BURGER BAR BLAZE PIZZA BUFFALO WILD WINGS CHILI S CHIPOTLE MEXICAN GRILL FIREBIRDS WOOD FIRED GRILL HIBACHI BLUE LIME FRESH MEXICAN GRILL NOODLES & COMPANY PENN STATION SUBS RISE BISCUITS AND DONUTS RUCKUS PIZZA, PASTA & SPIRITS SMOOTHIE KING STARBUCKS THE CHOCOLATE BOUTIQUE THE FULL MOON OYSTER BAR TRAVINIA ITALIAN KITCHEN WHICHWICH SUPERIOR SANDWICHES YOLO FROZEN YOGURT ZOE S KITCHEN SHOPPING ANN TAYLOR LOFT BUYBUY BABY CARTER S CHARMING CHARLIE S CHICO S DRESSBARN EARTH FARE GAMESTOP GNC HALLMARK MATTRESS FIRM NOTHING BUNDT CAKES OMAHA STEAKS OMEGA SPORTS PETSMART PIER 1 IMPORTS RACK ROOM SHOES ROSS DRESS FOR LESS SOMA INTIMATES TARGET TJ MAXX ULTA BEAUTY VESTIQUE WHITE HOUSE BLACK MARKET WINESTORE ENTERTAINMENT STONE THEATRE - PARK WEST 14 SERVICES AT&T 2.8 MILES BB&TBERKSHIRE HATHAWAY HOME SERVICES BLUE CROSS BLUE SHIELD CAROLINA DENTAL ARTS OF MORRISVILLE CHAMPION MARTIAL ARTS CRICKET WIRELESS EUROPEAN WAX CENTER FANTASTIC SAMS JAY ANDREW SALON & SPA MASSAGE ENVY ORANGETHEORY FITNESS PLATINUM NAIL SPA PNC BANK (COMING SOON) PURE BARRE SPORT CLIPS SPRINT THE UPS STORE TRIANGLE FAMILY EYE CARE RESIDENTIAL THE BRISTOL APARTMENT HOMES AND LOFTS THE ARBORETUM AT WESTON DINING BELLA MIA PIZZA BONEFISH GRILL BURGERFI CAFE CAROLINA & BAKERY JERSEY MIKE S MOE S SOUTHWEST GRILL RUTH S CHRIS STEAKHOUSE STARBUCKS WORLD OF BEER SERVICES A BETTER MAN S BARBER SHOP AMERILIFE CARY FLOW YOGA DELUXE CLEANERS EYE CARE ASSOCIATES GOLFTEC GO REALTY HAIRCOLORXPERTS LANE & ASSOCIATES LIFESTYLE LIFT AMERITRADE TITLE BOXING RESIDENTIAL THE APARTMENTS AT THE ARBORETUM 6501 WESTON Weston MILES

10 STRONG MARKET FUNDAMENTALS BOLSTERED BY SIGNIFICANT ECONOMIC DEVELOPMENT WINS The Raleigh-Durham market is one of the fastest growing markets in the U.S boasting an unemployment rate of 3.7% along with an additional 40,000 jobs introduced in the past two years. Consequently, the Raleigh-Durham office market has experienced 1.5 million square feet of positive net absorption in the last twelve months driving vacancy rates down to a 16-year low of 7.2%. The Cary submarket has experienced unparalleled recent growth. The area has led the market in economic development wins, including the notable corporate relocations of HCL Technologies, Trilliant, and Metlife in addition to multiple recent expansions within Cary including SAS, Caterpillar, Biologics, Arysta and Copernicus, Epic Games, MicroMass Communication, Dude Solutions, and Relias Learning. As a result, the 95% occupied, 6.9 MSF Cary submarket has recorded 163,121 SF (2.4%) of positive net absorption over the last twelve months. EXECUTIVE SUMMARY 9

11 CREDIT SUISSE ADDING 1,200 JOBS IN RESEARCH TRIANGLE PARK VERIZON RETAILER PICKS RALEIGH FOR HQ RELOCATION 250 JOBS RELIAS LEARNING PICKS TRIANGLE OFFICE PARK FOR NEW HEADQUARTERS CAMPUS INFOSYS TO BRING 2,000 JOBS DUKE ENERGY SELECTS NC LOCATIONS FOR ECONOMIC DEVELOPMENT PROGRAM METLIFE EXPANDING THEIR TECH HQ TO ITS THIRD BUILDING IN THE TRIANGLE FNB CEO TALKS RALEIGH COMMITMENT, JOBS AND THE NEW 22-STORY FNB TOWER TO WAKE COUNTY EXPLOSIVE ECONOMIC GROWTH THROUGHOUT THE TRIANGLE Over the past four months, the Triangle has experienced an unprecedented explosion of economic growth. The Triangle s greatest accomplishment has been providing an ideal environment for companies to expand organically, as reflected by the large new-to market companies that make major hiring announcements in the area. BIOMÉRIEUX CUTS RIBBON ON $60M DURHAM EXPANSION TRILLIANT TO MOVE GLOBAL HQ TO CARY CREATING 130 JOBS CITRIX TO ADD 400 JOBS TO RALEIGH OPS 6501 WESTON 10

12 THE GREAT RESURGANCE Urban office appeal has been a prevalent theme in the real estate industry over recent years; however, data suggests employment trends and demographic migration increasingly favor suburban product. The long-term outlook for suburban office is extremely positive as investors are poised to capitalize on the upside potential displayed in the corresponding suburban office trends. Located in one of the country s fastest growing metropolitan area, 6501 Weston is primed for long-term success driven by the underlying economic fundamentals of the Raleigh-Durham suburban office market. SHARE OF HOUSEHOLD GROWTH BY DECADE FORECAST 100% 90% 23% 14% 21% 15% 8% 6% 80% SHARE OF HOUSEHOLD GROWTH 70% 60% 50% 40% 30% 71% 79% 69% 77% 71% 79% SUBURBS EXPECTED TO GAIN SHARE % 10% 0% 21% 15% 6% 7% 10% 8% P 2015P-2025P DECADE TODAY S RURAL TODAY S SUBURBS TODAY S URBAN Source: John Burns Real Estate Consulting, LLC based on US Census data; Moody s Analytics EXECUTIVE SUMMARY 11

13 U.S. EMPLOYMENT SINCE 2009, 15 MILLION JOBS CREATED IN THE U.S. Source: Bureau of Labor Statistics AS JOB GROWTH NUMBERS CONTINUE ON AN UPWARD TREND, THE CORRESPONDING PERCENTAGE OF THE WORKFORCE IN THE SUBURBS WILL INEVITABLY INCREASE AS WELL. 64% OF CURRENT WORKFORCE SITS IN THE SUBURBS 64% 36% SUBURBS CBD Source: Bureau of Labor Statistics 6501 WESTON WESTON 12

14 THE RESURGENCE OF THE SUBURBS CBD VS. SUBURBAN OFFICE CAP RATES.5% FROM A CAP RATE PERSPECTIVE, THE GAP BETWEEN CBD AND SUBURBAN OFFICE CONTINUES TO NARROW SUBURBAN CBD Source:CoStar Portfolio Strategy PRICE PER SQUARE FOOT INDEX OVER THE PAST FOUR YEARS, SUBURBAN OFFICE HAS REALIZED APPROXIMATELY 5% MORE VALUE GROWTH COMPARED TO THE CBD S SUBURBAN CBD EXECUTIVE SUMMARY 13 Source:CoStar Portfolio Strategy

15 MILLENNIAL HOME OWNERSHIP BREAKDOWN WILL NOT PURCHASE 16% ALREADY OWN 24% PLAN TO PURCHASE 60% MILLENNIALS LIVING IN CITIES MILLENNIALS LIVING IN SUBURBS WELL-LOCATED, HIGHLY AMENITIZED SUBURBAN OFFICE PRODUCT is positioned for outsized growth in the coming years, as an aging millennial population is expected to migrate out of urban areas in search of more affordable housing and better schools as they begin to start families. A DEMOGRAPHIC SHIFT IS UNDERWAY. Urban areas realized impressive growth from , largely driven by the inward migration from millennials. However, for the first time since 2010, urban growth is moderating while suburban demand continues to outpace the CBDs. THIS TREND IS ALREADY TAKING PLACE IN RALEIGH-DURHAM, as Cary was recently ranked #4 among cities with the most millennial homeowners (Source: SmartAsset, 2016) and Wake County is projected to be the 8th most active market where millennials are most likely to purchase homes (Source: CoreLogic, 2016) IN MANY WAYS, SUBURBAN OFFICE NEVER SLOWED DOWN, as suburbs still account for 79% of the population, 75% of 25-to-35 year olds and 77% of office inventory (Source: ULI Emerging Trends in Real Estate 2017) 6501 WESTON 14

16 201 NORTH TRYON STREET SUITE 1400 CHARLOTTE, NORTH CAROLINA SIX FORKS ROAD SUITE 876 RALEIGH, NORTH CAROLINA investment advisor RYAN CLUTTER Senior Managing Director SCOT HUMPHREY Senior Director CHRIS LINGERFELT Director associate RYAN EKLUND Associate debt + structured finance TRAVIS ANDERSON Senior Managing Director tanderson@hfflp.com CORY FOWLER Senior Director cfowler@hfflp.com ATLANTA AUSTIN BOSTON CAROLINAS CHICAGO DENVER DALLAS FLORHAM PARK (NJ) HARTFORD HOUSTON INDIANAPOLIS LOS ANGELES MIAMI NEW YORK ORANGE COUNTY (CA) ORLANDO PHILADELPHIA PITTSBURGH PORTLAND (OR) SAN DIEGO SAN FRANCISCO TAMPA WASHINGTON, DC LONDON, UK Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment EXECUTIVE sales, SUMMARY equity 15 placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on