Mason Creek Office Center SINGLE-TENANT CLASS A OFFICE AA INVESTMENT-GRADE CREDIT 10+ YEAR LEASE TERM HOUSTON, TEXAS Hollida Fenoglio Fowler, L.P. acting b and through Hollida GP Corp a Texas licensed real estate broker ( HFF ).
Introduction HFF has been exclusivel retained to sell Mason Creek Office Center (the Propert ), a recentl constructed suburban Class A office building that is located in Houston, Texas and 100% leased to GEICO (S&P: AA) through December 31, 2025. GEICO is the second largest private passenger automobile insurance compan in the U.S. and a whollowned subsidiar of Berkshire Hathawa. Mason Creek Office Center consists of a two-stor, LEED-certified office building with 135,716 rentable square feet on a 10.8-acre site that offers a generous surface parking area with almost 6.0 spaces per 1,000 rentable square feet. GEICO chose Mason Creek for its first regional claims processing center specificall designed to serve the greater Houston metropolitan area due to continued strong population growth in West Houston. The Propert is located in Mason Creek Corporate, a newl developed 110-acre deed restricted business park at the Northeast corner of the I-10 Kat Freewa and Mason Road in the west Houston suburb of Kat, Texas. Squarel centered in the historical path of growth, this location offers unrivaled access to a highl educated labor pool and attractive residential communities with award winning school sstems. The Propert is being offered free and clear of existing financing, allowing investors the flexibilit to deplo an optimal amount of equit or take advantage of toda s historicall-attractive debt markets. Propert Summar Project Name: Mason Creek Office Center Address: 21420 Merchants Wa Kat, Harris Count, TX 77449 Building Size: 135,716 SF Number of Stories: 2 Year Built: 2013 Site: 10.810 acres (470,883 SF) Parking: Approximatel 6.0 per 1,000 SF Architect: Powers Brown Architecture Developer: Mers Crow & Saviers, Ltd. % Leased: 100% Tenant: GEICO Corp. Lease Expiration: December 31, 2025 Lease Tpe: Single Tenant / Net Lease
Tenant Summar Tenant: GEICO Corporation Industr: Propert & Casualt Insurance Headquarters: 5260 Western Ave., Chev Chase, MD 20815 Emploees: 30,000+ Year Founded: 1936 Year Acquired: 1996 b Warren Buffet & Berkshire Hathawa Credit Rating: AA / A++ (S&P / A.M. Best) Website: www.geico.com Lease Expiration: December 31, 2025 Wgt Avg Lease Term: 10.9 ears from Februar 2015 Renewal Options: Two 5-ear options at Market on an "as is" basis Parent Berkshire Hathawa Headquarters: 3555 Farnam St., Omaha, NE 68131 Emploees: 302,000+ Ownership: Publicl-traded (NYSE: BRK-A / BRK-B) Market Cap: $357.5 billion T-12 Revenue: $193.5 billion Credit Rating: AA / Aa2 (S&P / Mood's - Stable) Website: www.berkshirehathawa.com
MASON CREEK OFFICE CENTER INVESTMENT HIGHLIGHTS EXECUTIVE SUMMARY Exceptional Credit Tenanc Mason Creek Office Center is leased on a net basis under a long term lease to Government Emploees Insurance Compan ( GEICO ) offering AA investment grade returns and ield certaint backed b exceptional real estate in Houston, one of the fastest growing economies in the United States. GEICO BERKSHIRE HATHAWAY S&P / A.M. Best: AA / A++ S&P / Mood s*: AA / Aa2 (Stable) 2nd Largest Auto Insurer in the U.S. #4 in Fortune 500 (June 2014) 9.7% market share (A.M. Best) #4 in S&P 500 (June 2014) 7 YR CAGR of top-line Revenue: 7.7% #5 in Financial Times Global 500 Over 30,000 emploees 302,000 emploees Long-Term Net Lease with Contractual Rent Escalation GEICO took initial occupanc in December 2013 under a 12-ear net lease with contractual annual rental rate increases of 2.0%. The lease provided for a phased move-in over 36 months allowing GEICO time to staff up this new regional facilit. GEICO currentl occupies 80% of the building, but pas operating expenses on 100% of the building, with final occupanc take-down no later than November 2016. 10.9 ears of remaining lease term Two 5-ear renewal options at market In-place rents are below market State-of-the-Art Asset Delivered in 2013, Mason Creek Office Center exemplifies the standard of new Class A, large floorplate office design. The Propert has been individuall LEED certified core and shell b the U.S. Green Building Council providing tenants with all of the modern energ efficient technologies that the desire along with a well-conceived laout designed to provide maximum efficiencies. In addition to abundant natural light and open floor plans, tenants will enjo state of the art finishes and parking of 6.0 per 1,000 square feet. Technologicall Advanced, Deed-Restricted Business Park The Propert is located within Mason Creek Corporate, a 110-acre master-planned, deed-restricted business park that is designed to accommodate office, retail, hospitalit, flex and industrial uses. Developed b Parkside Capital in 2012, the park offers the latest in cutting edge infrastructure including a redundant, next generation fiber optic network that allows developers and end users to instantl connect to data, voice, internet, climate, and securit services. In addition, Troubadour owns and operates a near-b 300,000-square-foot data center that is directl linked to Mason Creek s fiber optic backbone offering tenants the latest in state-of-the-art telecommunications, data, and information securit services. This is the onl Tier IV data center in Houston. Desirable Corporate Address in a Premier Business Park Location One of West Houston s most prominent new business parks, Mason Creek Corporate offers tenants a dnamic campus-like environment with the latest technological infrastructure. Mason Creek Office Center tenants will also benefit from: Location that is in close proximit to several of West Houston s most explosive growth neighborhoods. Nation-leading demographics which provide an affluent and highl-educated workforce. Convenient access and visibilit from its location at a full interchange on I-10 Kat Freewa at N. Mason Road. One exit east on I-10 Kat Freewa from Tx 99, the Grand Parkwa, which is Houston s new outer beltwa that provides access to numerous large master-planned residential areas. Over 19,000 acres of green space located nearb. Dense retail development in close proximit including Kat Mills Mall, LaCenterra at Cinco Ranch, Memorial Cit Mall and Cit Centre. 21420 Merchants Wa 4
MASON CREEK OFFICE CENTER INVESTMENT HIGHLIGHTS EXECUTIVE SUMMARY Impeccable Market Fundamentals 10-ear average annual Class A leasing volume for Kat Freewa West submarket was 1.03 million square feet, equating to 5.3% of total current Class A inventor. Trailing twelve month leasing volume exceeded 760,000 square feet for the last 20 quarters. Class A properties in the submarket absorbed almost 4.4 million square feet in the last 60 months, and absorption has exceeded new deliveries b a factor of 1.26x over the same period. Current Class A occupanc stands at 94.5% as of Q4 2014, and has exceeded 90.0% for the last 13 quarters. The average Class A rental rate in the submarket is currentl $35.06 per square foot gross. Class A rates rose 8.8% over the last ear and have averaged 5.1% annual growth over the last three ears. Preferred Market for Institutional Investors The Association of Foreign Investors in Real Estate ( AFIRE ), a global commercial real estate professional association representing over $2.0 trillion of real estate assets under management, recentl named Houston the fourth best cit in the world for commercial real estate investment according to their annual investment surve. According to NCREIF data, Houston has consistentl ranked in the top 10 U.S. office markets for total return generation across one, three, five, seven, and 10 ear historical periods. Houston has averaged a 10.8% total return annuall over the last 10 ears, ranking it third among all U.S. office markets. The Urban Land Institute ( ULI ) named Houston as its top U.S. real estate market to watch in its Emerging Trends in Real Estate 2015 publication due to its strong population and emploment growth.. Houston s Economic Strength Driven b robust energ, medical, manufacturing, and trade industries, Houston has one of the lowest unemploment rates in the U.S. at 4.5% as of November 2014, a full 100 basis points lower than the national average. Houston continues to be one of the leading job creating MSAs in the nation. In the 12 months ended December 2014, Houston added 120,600 jobs, which equates to 4.3% growth in the emploment base (the third highest rate in the nation and the second fastest among major MSAs). Mood s Analtics projects that an additional 441,900 jobs will be added through 2018, or an average of 110,000 jobs per ear. With its abundance of high paing jobs, Houston s strong population growth continues to add to its population of 6.34 million. From 2000 to 2010 Houston added 1.2 million people to its population, equating to a 2.0% average annual growth rate. Mood s Analtics projects that the Houston population will grow b an additional 1.7% per ear through 2018, adding approximatel 565,000 people. 21420 Merchants Wa 5
EAST FACING SAM HOUSTON TOLLWAY HIGHWAY 6 ENERGY CORRIDOR CBD THE GALLERIA WESTCHASE ENCLAVE PARK EXECUTIVE SUMMARY GREENHOUSE RD FRY RD IH-10 KATY FREEWAY PARK ROW WESTGREEN BLVD MASON CREEK OFFICE CENTER WAY MERCHANTS 6 HFF
der Construction Grand Pkw U n The Woodlands 9 Greenwa Plaza, Suite 700 Gr Houston, Texas 77046 d an w Pk MONTGOMERY struction on rc ExxonMobil de Corporate Headquarters Un Houston State Park Eas tex Frw HOUSTON LIBERTY 69 Phone (713) 852-3500 Fax (713) 524-7334 HARRIS hfflp.com Pr op George Bush Intercontinental Airport d dmiller@hfflp.com North RUSTY TAMLYN, CCIM, SIOR Kat Frw Phone (713) 852-3561 Energ Corridor George Bush Park h ut rw tf es FORT BEND Sout Pasadena Frw Loop w 69 William P. Hobb Airport Franz Rd Pk Barb Term Fr nd Be Fort Armand Baou Park lf Merchants Wa w Kat Fort Bend Rd MASON CREEK OFFICE CENTER Pa rk Ro w Dr N Fr Rd Sam Houston Tollwa Gu jrogers@hfflp.com San Jacinto Ba N Mason Rd Texas Medical Center h So JOHN ROGERS Phone (713) 852-3436 Ba The Galleria wa Hw Loop Downtown Westheimer Rd Westpark Toll rtamln@hfflp.com ont aum Be w Real Estate Analst MASON CREEK OFFICE CENTER Sheldon Reservoir East Loop Phone (713) 852-3576 Frw South Frw st West Loop H. DAN MILLER, CCIM, SIOR we oad jhollinden@hfflp.com rth w rwilliamson@hfflp.com No Toll R Phone (713) 852-3514 Hard Phone (713) 852-3554 Houston 69 Fr rth No JEFF HOLLINDEN ed Gran Sam Houston Pkw ROBERT WILLIAMSON os Clear FOR FINANCING INQUIRIES CAMERON CURETON Director Smithers Kingsla nd Blvd Phone (713) 852-3531 BRAZORIA Proposed Grand Pkw SP eek ccureton@hfflp.com GALVESTON Kingsland Blvd Rd W Hollida Fenoglio Fowler, L.P. acting b and through Hollida GP Corp a Texas licensed real estate broker ( HFF ). es th ei m er Pk w 2014 HFF and HFFS (HFF Securities L.P.) are owned b HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industr. HFF together with its affiliate HFFS offer clients a full integrated national capital markets platform including debt placement, investment sales, equit placement, advisor services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF. HFF has been engaged b the owner of the propert [properties] to market it [them] for sale. Information concerning the propert [properties] described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accurac or completeness of such information. An and all references to age, square footage, income, expenses and an other propert specific information are approximate. An opinions, assumptions, or estimates contained herein are projections onl and used for illustrative purposes and ma be based on assumptions or due diligence criteria different from that used b a buer. Buers should conduct their own independent investigation and rel on those results. The information contained herein is subject to change. Bapor Termin