PARHAM PROFESSIONAL PARK

Transcription

1 20,372 s.f. medical office building value-add and owner occupant oportunity PARHAM PROFESSIONAL PARK PARHAM PROFESSIONAL PARK a

2 Executive Summary THE OPPORTUNITY JLL, as exclusive advisor, is pleased to offer the opportunity to acquire Parham Professional Park, (the Property ), located at 2821 N. Parham Road in Henrico County, Virginia in close proximity to I-64 and West Broad Street along the Parham Road Corridor. The Property features a two-story medical office building totaling approximately 20,372 square feet and is currently 65% occupied by medical and office tenants. The Property offers ownership opportunity for investors and owner occupants in a sale market with limited 2nd generation inventory. Combined with improving market fundamentals and tenant stability, there is strong potential for future income growth. INVESTMENT HIGHLIGHTS Value-add Opportunity The Property is currently 68% leased, primarily to stable, medical tenants. The Property offers the opportunity for an investor to increase NOI by stabilizing the asset through improved occupancy. ADDRESS BUILDING SIZE TYPICAL FLOOR SIZE NUMBER OF FLOORS 2 YEAR BUILT 1981 SF AVAILABLE LAND ACREAGE PARKING 2821 N. Parham Road Richmond, VA 20,372 SF 10,186 SF 6,729 SF 2.81 acres (total) 4.5/1,000 SF Owner-Occupant Investment Opportunity With approximately 6,729 s.f. available (32% of the RBA), the Property offers an opportunity to secure ownership in an asset with an in-place income stream at a price well below replacement costs. Current market conditions are challenging for owner-occupancy with limited available inventory. Exceptional location The Property offers medical and office users a highly accessible location situated centrally in the West End of Richmond. The Property is situated conveniently to both campuses of Henrico Doctors Hospital and St. Mary s. The property is easily accessed from I-64 at Parham Road. Additionally, the Property is located in close proximity to large daytime amenity bases on Parham Road and West Broad Street. b OFFERING MEMORANDUM PARHAM PROFESSIONAL PARK 1

3 The Property Current availabilities Suite 101: Suite 105: Site Details Land area: Location: Parking: Flood zone: Zoning:. 3,333 SF 3,396 SF 2.81 acres 2821 N Parham Road Richmond, VA County of Henrico, Virginia 125 spaces in surface lot Zone X; outside 500 year floor plain O-2, Office District Construction Details Basic construction: Foundation: Framing: Floors: Exterior walls: Roof type: Pedestrian doors: Steel, wood and glass Continuous footing with CMU masonry and concrete slab Structural steel and engineered wood roof system Reinforced concrete slab Wood and composite Membrane Metal framed and wood storefront glass Mechanical Details Heat source: Heating system: Cooling: Cooling equipment: Plumbing: Electrical service: Fire protection: Interior Details Floor covering: Walls: Ceilings: Lighting: Restrooms: Electric Heat pump HVAC Rooftop Mounted Unit(s) replaced in 2017 County water supply and sewer Dominion Virginia Power Non-sprinklered Carpet and composite tile Drywall Acoustical tile Fluorescent Common area and within tenant suites 2 MEMORANDUM PARHAM PROFESSIONAL PARK 3

4 FLOOR PLANS SURVEY LOWER LEVEL* UPPER LEVEL* 4 MEMORANDUM *Not to scale PARHAM PROFESSIONAL PARK 5

5 Market Overview RICHMOND LOCATION OVERVIEW Centrally located along Virginia s eastern seaboard, the Richmond MSA consists of 13 counties and four independent cities boasting an estimated 2016 population of nearly 1.4 million. The region is crisscrossed by Interstate 95 and Interstate 64, which connect the metro to other major population centers up and down the east coast, from New York to Miami and westward to St. Louis, MO. The Capital of the Commonwealth of Virginia, Richmond s economic roots began as a trade and manufacturing hub on the James River in 1737, however its economy progressed into a law, government, and financial center over the course of history. While the James River still connects the region to the Port of Virginia in Hampton Roads, this waterway, and its extensive park system, enhances the charm of the city and serves as a major attraction for Richmond s robust outdoor community. ECONOMY PARHAM ROAD PARHAM PROFESSIONAL PARK While typically seen as a law, government and finance driven market, the Richmond MSA is home to eight Fortune 500 firms and a myriad of private and public companies. Richmond s 4.3 percent unemployment rate recorded in January, 2017 was in line with the state of Virginia and below the national average of 5.0 percent. Additionally, the latest data from the Bureau of Economic Analysis indicated the Richmond MSA s gross domestic product grew by 3.9 percent between 2014 and 2015, above the 2.5 percent average for all metropolitan areas in the US. Three major health systems serve the region: VCU Health System, HCA and Bon Secours. APR 2016 APR 2017 Overall unemployment rate 4.3% 4.1% 12-month growth Payroll (thousands) Richmond total non-farm payroll 2.8% Civilian labor force 0.2% Office-using sectors Finance 0.0% 49.8 Professional business services -3.2% Information 1.4% 7.4 Education and Health 6.2% FILIGREE PARHAM COURT PROFESSIONAL ASHBURN, PARK VA 7

6 OFFICE MARKET After three consecutive years of positive net absorption between 2013 and 2015, shifting corporate real estate strategies created a wave of vacancies that diverged from this trend. While the magnitude of these swings indicated faltering demand, statistically, the opposite was true. Construction in the Richmond market, more so suburban submarkets, has been relatively insignificant due the pricing gap between existing Class A rates and new construction. These 16 to 20 percent premiums, plus additional relocation and build-out expenditures not covered landlord-funded improvement allowances, inflated occupancy costs over second and third-generation space options. With space demand peaking and cost-efficiency efforts still in full swing, Class A blocks larger than 100,000 square feet, which formerly lingered on the market for several years, have nearly dissipated. This quarter, Premier Health Plan s 135,000-square foot lease at Liberty plaza II removed the last suburban Class A block in excess of 100,000 square feet, leaving the CBD with a single availability in this size category. Additionally, significant downtown leasing activity from Costar Group and ICMA-RC in 2016, then Owens & Minor s 90,000-square-foot lease this quarter, positioned this block well for any future sizable requirement in the CBD. Collectively, by the end of the first quarter over 530,000 square feet signed since 2016 were yet to be physically occupied and will fuel net absorption over the next several quarters. Class A and B Office Space (First Quarter 2017) RICHMOND RICHMOND TOTAL NWQ PARHAM CORRIDOR Total Inventory 24,400,426 11,434, ,652 Total Vacancy Rate 14.0% 13.7% 13.0% Direct Vacancy Rate 12.7% 11.3% 13.0% Sublet Vacancy Rate 1.3% 2.4% 0.0% 12-Month Deliveries* Space Under Construction (SF)* 74,471 74, Month Construction Starts (#)* Quoted Rent (FS) 1Q17 $19.25 $18.48 $ Month Net Absorption (SF) 132,200-78,203 21, Month Leasing Activity (SF) 1,048, ,617 99,391 *leasable inventory (non owner-occupied) 8 MEMORANDUM PARHAM PROFESSIONAL PARK 9

7 PARHAM PROFESSIONAL PARK CONTACT INFORMATION Charlie Polk Managing Director Gareth Jones Vice President