SAN ANTONIO, TEXAS INVESTMENT SUMMARY Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker ("HFF").
EXECUTIVE SUMMARY HFF is pleased to offer the opportunity to purchase Northbrook Business Center (the Property ), a recently renovated flex office project totaling 105,601 square feet in North Central San Antonio. The Property is strategically located off Highway 281, one of the busiest highways in San Antonio (189,000 VPD), offering superior access. At 89% occupancy, the Property presents investors with an investment opportunity featuring stable in-place cash flow, coupled with upside-potential through the leaseup of vacant space and in-place lease rates 13% below market. A diversified rent roll, with no tenant occupying more than 11% of the Property, offers minimal rollover exposure. Northbrook Business Center is a quality project that is well-positioned for a rapid increase in near-term cash flow and sustained long-term value appreciation in one of San Antonio s most prolific growth corridors. Address 140 Heimer Rd, San Antonio, TX 78232 Submarket North Central Square Footage 105,601 Stories One Buildings Seven Leased 89% Year Built 1986 Site 8.32 Acres Parking 3.6 : 1,000 2
INVESTMENT HIGHLIGHTS IN-PLACE INCOME COUPLED WITH TREMENDOUS UPSIDE POTENTIAL Currently 89% occupied to a diverse tenant composition, the Property offers limited exposure to any single industry In-place rental rates are 13% below the competitive set, presenting investors an impressive mark-to-market opportunity 38% of existing tenants have lease expirations in 2018 and 2019, offering potential investors substantial near-term revenue growth No tenant occupies more than 11% of the Property, while staggered lease rollover limits vacancy exposure Current ownership has identified a new revenue stream by charging a small number of tenants for covered parking, an area potential investors could substantially grow HIGHLY ACCESSIBLE NORTH CENTRAL LOCATION The Property is positioned along Highway 281, the major north/south thoroughfare of San Antonio Highway 281 is the main travel route for the decision makers to the north and workforce housing to the south The Property is centered between I-410 and Loop 1604, the only highway rings surrounding San Antonio Close access to the recently completed Wurzbach Parkway offers a direct connection to I-35 to I-10 Furthermore, the intersection of Bitters Road and Highway 281 is an established retail node, including Target, Sam s Club, Olive Garden and Bill Miller Bar-B-Q amongst others, offering tenants a deep amenity pool EXCEPTIONAL SUBMARKET FUNDAMENTALS Occupancy rates in the North Central office submarket are currently 92%, with a 5-year trailing average of 91% Over that same five-year period, base rental rates have increased 11% from $19.03 to $21.33 per square foot FSG Absorption has outpaced deliveries every year since 2010 with an average of 200,000 square feet absorbed and only 150,000 square feet delivered each year The infill profile of the submarket ensures limited new product coming available, with no new product under construction Lack of developable sites further limits future construction starts 3
RECENTLY RENOVATED HIGH QUALITY PROPERTY Recently installed architectural steel awnings and panels provide exceptional curb appeal, differentiating the Property from its competitors Each building within the park has a roof warranty through 2025 Over 40% of the rooftop HVAC units have been replaced since 2012 The parking lot was recently coated and restriped and includes several covered parking areas Lush landscaping and abundant trees provide a campuslike work environment EFFICIENT AND FLEXIBLE SPACE LAYOUTS Efficient and flexible building/space layouts can accommodate a wide variety of tenants, offering a deep tenant pool for potential investors Limited comparable product market-wide has constrained tenants searching for more flexible, efficient floorplans Three buildings have dock-doors and loading-docks, a rare amenity in this infill location Smaller buildings with shallow bays can accommodate an existing tenant s growth or subdivide to fit a smaller prospects needs Each building can be accessed from all four sides, providing additional flexibility for tenant ingress/egress 4
SAN ANTONIO INTERNATIONAL AIRPORT WURZBACH PARKWAY BITTERS ROAD NORTHBROOK Business Center HEIMER ROAD 5
NORTHBROOK Business Center SAN ANTONIO, TEXAS JOHN TAYLOR EXECUTIVE Managing Director SUMMARY 210.386.0080 jtaylor@hfflp.com KELSEY ROOP Senior Director 512.532.1927 kroop@hfflp.com BENTLEY SMITH Analyst 512.532.1971 bsmith@hfflp.com CASEY WENZEL Debt Contact 512.532.1923 cwenzel@hfflp.com 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 neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference 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 purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.