FOR SALE $10,675,000 8.0 % CAP RATE A GROCERY A GROCERY ANCHORED ANCHORED NEIGHBORHOOD SHOPPING SHOPPING CENTER CENTER FOR MORE INFORMATION CONTACT: Jeff Tinsley Jeff Beard, CCIM 92% OCCUPOIED OCCUPIED WITH UPSIDE UPDSIDE POTENTIAL
OFFERING MEMORANDUM TABLE OF CONTENTS Section I. Purchase Opportunity o Property Aerial Page 1 o Offering Highlights Page 4 o Trade Area Aerial Page 5 o Area Demographics Page 10 o City of Montgomery, Montgomery County Overview Page 11 Section II. Property and Retail Market Overview Section III. Financial o Property Overview Page 14 o Montgomery County Retail Market Highlights Page 16 o Shopping Center Market Summary Page 17 & 18 o Rent Roll Page 20 o Lease Expirations Page 21 o Projected Income Statement Page 22 o Cash Flow Projections Page 23 & 24 2
OFFERING MEMORANDUM Section I - Purchase Opportunity 3
OFFERING MEMORANDUM PURCHASE OPPORTUNITY HIGHLIGHTS o Montgomery, TX is a suburb community of the Houston, TX metropolitan area. o 92% leased shopping center containing a total of 94,893 sf with long term NNN leases. Typically, base rent increases exist throughout the lease term. o 31,760 sf grocery anchored tenant leased through 2022, plus two (2) five (5) year options to renew at market rate. o Site consist of 14 +/- acres. Additional land available for value add opportunities such as Build to Suit, Ground Lease, or New Retail Development; Ample parking for current and future requirements. o Current tenants provide a good mix for retail synergy. o Main & Main intersection - the center has excellent access from multiple entryways which include SH 105 (Eva Street), FM 149 and Flagship Blvd. o Strong demographics with Average Household Income: $109,091 o Fast growing community with 3.11% annual growth rate 2016-2021 o Chance to purchase grocery anchor in an expanding retail trade area. o Below market rental rates with upside as current contract rate averages $11.60 psf NNN, compared to $16.31 psf NNN for the Montgomery County Retail Market (3Q2016). o $10,675,000 Asking Price 8.0% Capitalization Rate o Offered free & clear of debt 4
PROPERTY OVERVIEW TRADE AREA MONTGOMERY LAKE CONROE MONTGOMERY HIGH SCHOOL MONTGOMERY TRACE CENTER (proposed) 5
PROPERTY OVERVIEW PROXIMITY MAP MONTGOMERY AREA MAP HOUSTON Montgomery Lake Conroe 149 105 Conroe 6
MONTGOMERY COUNTY, TX INCOME COMPARISON Source: Houston Galveston Area Council; ESRI 7 Source: Houston Galveston Area Council
MONTGOMERY COUNTY, TX EMPLOYMENT Source: Houston Galveston Area Council 8 Source: Houston Galveston Area Council
MONTGOMERY COUNTY, TX OCCUPATIONS Source: Houston Galveston Area Council 9 Source: Houston Galveston Area Council
AREA DEMOGRAPHICS POPULATION GROWTH AND INCOME 10 Mile Radius from Montgomery Trace Center Montgomery County Houston CBSA Population 2010 Census 53,485 455,746 5,920,416 2016 Estimates 62,051 541,657 6,655,870 2021 Projection 72,320 627,068 7,374,048 2016-2021 Annual Growth Rate 3.11% 2.97% 2.07% Income (2016 Estimates) Average Household $109,091 $98,633 $87,811 Median Household $78,314 $71,374 $60,693 Per Capita $42,327 $35,175 $30,710 Source: ESRI 2016 Demographics 10
MONTGOMERY, TX LOCAL OVERVIEW HIGHLIGHTS o o o Montgomery, TX is located at the junction of State Hwy 105 & FM 149 in Montgomery County, part of the Houston Metropolitan Area. Montgomery is 10 miles west of Conroe, the county seat, and 45 miles northwest of downtown Houston. Montgomery is a growing community, expected to grow over 12% during the next five years. Evidence of this growth is the construction of three new schools, including an elementary, middle-school and a high school. The high school campus will be 417,000 sf and have the capacity to hold 2,500 students. Also under construction is a multi-sport athletic complex adjacent to the new high school. Montgomery s major east-west thoroughfare, State Highway 105, is one of the most traveled roadways in Montgomery County carrying over 37,000 vehicles daily. Traffic along Hwy 105 has increased over 30% in just two years, prompting TXDOT to undertake two major improvements projects for SH 105. 11
HOUSTON, TX MARKET OVERVIEW HIGHLIGHTS o As part of the Houston metro area, residents of Montgomery benefit from the highly acclaimed attributes that Houston has to offer. o With a population of 2.3 million people, Houston is the largest city in Texas and the 4 th largest city in the US. Houston is consistently a leader in population growth among major metro areas. o Houston has a diverse economy, positioning itself as a global leader in energy, medicine, international businesses and technology. The Houston MSA is home to 26 Fortune 500 headquarters, ranking third among metro areas. Many other Fortune 500 companies maintain U.S. administrative headquarters in Houston. o Houston is known as the "Energy Capital of the World". More than 3,700 located within the Houston Metropolitan Statistical Area, including more than 500 exploration and production firms, more than 150 pipeline transportation establishments and hundreds of manufacturers and wholesalers of energy-sector products. Houston is home to 40 of the nation's 134 publicly traded oil and gas exploration and production firms, including 10 of the top 25; nine more among the top 25 have subsidiaries, major divisions or other significant operations in the Houston area. o Houston is also a world leader in the medical industry. Collectively, the 54 medical, academic and research institutions of the 1,000 acre Texas Medical center are Houston s largest employer with over 106,000 medical professionals employed. The Medical Center receives over 7.2 million patient visits annually. o Houston is home to NASA s Johnson Space Center, which employs over 18,000 engineers, scientists and administrative personnel. o The Port of Houston is a 25-mile long complex which is ranked first in the US in foreign waterborne commerce and ranked second in total tonnage. The Port is responsible for over $240 billion in annual trade value. 12
OFFERING MEMORANDUM Section II Property & Retail Market Overview 13
PROPERTY OVERVIEW PROPERTY HIGHLIGHTS o 94,893 sf single story retail center located on the southeast quadrant of State Highway 105 and FM 149 in Montgomery TX. o Anchored by Brookshire Brothers, a local growing, independent supermarket chain with a loyal customer base. Brookshire Brothers operates 110 units over nine banners. This location is reported to be a top 30 performer in the portfolio. o The center is leased to 18 tenants in three separate buildings on a total of 14 +/- acres. Tenants include Brookshire Brothers, Woodforest National Bank, United States Post Office, Anytime Fitness, and Subway. o Steel, metal and masonry construction. o Great visibility and accessibility from SH 105 and FM 149, the major intersection in Montgomery. o Approximately 24,000 cars pass through the intersection daily. o Flagship Blvd surrounds the property to the south and east which allows for easy access and serves as a secondary thoroughfare to the shopping center. o Close proximity to some of the most exclusive subdivisions on Lake Conroe, whose collective Average Household Income is $131,950 (34% higher than the county average). o Lake Conroe is the largest recreational Lake in the Houston area, drawing thousands of visitors weekly. o Adjacent to the property is The Heritage, a luxury apartment community located adjacent from the property, consists of 80 units which are 100% leased. Phase II will include over 100 additional units. 14
ABOUT THE ANCHOR HIGHLIGHTS o Established is 1921 o Headquarters in Lufkin, TX o Employee owned with over 7,000 employee-owners o Operates over 110 locations under nine banners o Growing company: acquired David s Supermarkets in 2014 and expanded westward with new store in Canyon Lake, TX in 2016 15
MONTGOMERY COUNTY RETAIL MARKET OVERVIEW RETAIL MARKET HIGHLIGHTS o o o o Current Montgomery County Shopping Center occupancy is at 95.1% - up from the 5-year average of 93.9%. Total retail space in Montgomery County is approximately 27.9 million square feet, with 16 million square feet existing in shopping centers. Current average shopping center rental rate is $16.31 psf NNN. The subject property s contract rate averages only $11.60 psf NNN. In comparison, Greater Houston retail market through the 3 rd quarter of 2016 experienced $18.01 psf NNN rental rates with a 94.6% occupancy rate 16
MONTGOMERY COUNTY RETAIL MARKET OVERVIEW SHOPPING CENTER MARKET STATISTICS 3Q2016 Source: CoStar 17
MONTGOMERY COUNTY SHOPPING CENTER MARKET SUMMARY Vacancy Rate NNN Asking Rent Per SF Net Absorption Sales Volume Source: CoStar 18 18
OFFERING MEMORANDUM Section III Rent Roll, Lease Expirations and Projected Income Statement 19
OFFERING MEMORANDUM THE J. BEARD REAL ESTATE COMPANY, LP FOR COMMENTS OR QUESTIONS PLEASE CONTACT: Jeff Beard, CCIM 281-367-2220 x102 or jbeard@jbeardcompany.com Jeff Tinsley, Senior Associate 281-367-2220 x104 or jtinsley@jbeardcompany.com 10077 Grogan s Mill Rd, Suite 135, The Woodlands, TX 77380 25
OFFERING MEMORANDUM INFORMATION PRESENTATION DISCLAIMER The information contained in this presentation, while based upon data supplied by the Owner and from other sources deemed reliable, is subject to errors and omissions and is not, in any way, warranted by The J. Beard Real Estate Company, LP. All references to age, size, or square footage are approximate. Furthermore, The J. Beard Real Estate Company, LP, has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or business prospects of any tenant, or any tenant s plans or intentions to continue its occupancy of the subject property. Any sale or lease contract should be subject to your verification of all pertinent data. The Property, which is the subject of this presentation, is subject to prior lease, sale, and change in price or removal from the market at any time without notice. This presentation is for your use in determining the suitability of the Property contained herein. ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. The J. Beard Real Estate Company, L.P. 10077 Grogan s Mill Road, Suite 135 The Woodlands, Texas 77380 Jeff Beard, CCIM 281.367.2220 ext. 102 281.367.2232 fax jbeard@jbeardcompany.com 10077 Grogan s Mill Rd, Suite 135, The Woodlands, TX 77380 26
10077 Grogan s Mill Rd, Suite 135, The Woodlands, TX 77380