Holliday GP Corp. ( HFF ), a California licensed real estate broker, California License #01385740 OFFERING SUMMARY
THE OPPORTUNITY HFF, as exclusive advisor, is pleased to present the opportunity to acquire Rio 9095 (hereinafter, the Property ), a bestin-submarket class A office building prominently located in Mission Valley, one of San Diego s most densely-populated, amenity- and transit-oriented, mixed-use submarkets. Ideally situated within Mission Valley s central core, the Property is within walking distance of two trolley stations, nearly 1 million square feet of retail amenities, and over 3,000 multi-housing units, soon to increase to 7,000+ units with the delivery of the nearby master-planned Civita development. Encompassing 81,799 rentable square feet (BOMA) in four stories and currently 95.6% leased, Rio 9095 offers the ideal combination of stable in-place cash flow and near-term value enhancement potential. Featuring a balanced rollover schedule and diversified rent roll with no single tenant occupying more than 15% of the NRA, the Property s income stream is generated by a high quality tenant roster that includes national, international, and investment-grade tenancy (61.7% of the NRA). Moreover, with an overall weighted average remaining lease term of 4.0 years and in-place rents that are 12.5% below market, Rio 9095 presents an excellent mark-to-market and yield-enhancement opportunity. Rio 9095 features extremely attractive physical elements including steel-frame construction, continuous window line, 14 slab-to-slab heights, highly functional floor plates, and a generous 5.1:1,000 USF parking ratio. The exceptional quality of the Property combined with it s ideal location in Mission Valley, which is in the midst of an unparalleled urbanization, make Rio 9095 the premier opportunity to acquire an institutionally owned and maintained class A office building significantly below replacement cost in a market that is poised for continued growth. 2
BY THE NUMBERS 81,236 net rentable area (as-leased) 81,799 net rentable area (BOMA remeasurement) 95.6% leased 61.7% national presence / credit tenancy 365 parking spaces 5.1:1,000 usf parking ratio 5.54 acre * land area ±20,000 sf average floor plate *2.71 acres owned with Building and parking lot atop and 2.83 acres leasehold with parking lot atop 3
INVESTMENT HIGHLIGHTS DURABLE IN-PLACE INCOME STREAM WITH VALUE GROWTH POTENTIAL Rio 9095 is 95.6% leased to a diverse tenant roster consisting of 13 unique tenants spanning across multiple industries and no tenant occupying more than 15% of the Property. With a balanced rollover schedule and national/credit tenancy (61.7% of the NRA), an investor is provided a dependable income stream while also capitalizing on near-term lease expirations at below market rents. Average in-place rents are 12.5% below market with 59.7% of the NRA expiring over the next five years, providing investors a mark-to-market rent opportunity to further grow NOI while the long term, stable tenants ensure a durable cash flow stream. 95.6% leased with a balanced rollover schedule resulting in yield stability 61.7% National Presence/Credit Tenancy Diverse tenant roster consisting of 13 unique tenants spanning multiple industries. GROSS BASE RENT (UPON EXPIRATION) VS. MARKET RENT RENT (PSF/MOS) $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 $3.44 $3.59 $3.09 $3.03 11.8% 15.8% 25.0% $3.83 21.1% $3.87 $3.99 $4.11 $4.32 20.0% $3.23 $3.33 $3.41 $3.54 $3.59 15.0% 14.9% 17.0% 11.0% 10.0% 4.1% 5.0% 0.0% RSF EXPIRING % RSF Expiring Base Rent Upon Expiration Market Rent 4
DIVERSIFIED TENANT ROSTER 14.9% LEGAL 13.8% TECHNOLOGY 15.1% GOVERNMENT 13% CAPITAL MARKETS 14.5% INSURANCE 17% 14.4% 12% REAL ESTATE OTHER SERVICES 22.8% FINANCIAL SERVICES 9% BANKING ENGINEERING SERVICES TECHNOLOGY FINANCIAL SERVICES OTHER INSURANCE GOVERNMENT LEGAL DESIRABLE CLASS A OFFICE ASSET Constructed in 2005, Rio 9095 features a high-image exterior architecture, steel frame construction, continuous window line, 14 slab-to-slab, 9-10 clear heights, and abundant 5.1:1,000 USF parking. Moreover, the multi-tenant design and highly functional floor plates allow for a multitude of options to meet various tenant sizes and layout requirements. The Property is widely considered to be a top tier Class A office asset in the Mission Valley Submarket. 14 slab-to-slab 9-10 ceiling heights 5.1:1,000 SF parking; highest parking ratio in Mission Valley Top tier asset within the Mission Valley Class A competitive set ATTRACTIVE BASIS BELOW REPLACEMENT COST The Property provides investors the opportunity to acquire an institutional quality asset in an irreplaceable location significantly below replacement cost, which is estimated to be over $500 PSF. 5
BOURGEONING URBAN SUBMARKET Rio 9095 is located in one of San Diego s most central and accessible business centers between Downtown San Diego and San Diego s coastal communities. Mission Valley is experiencing robust urbanization with over 10 new developments/re-developments currently under construction, planned or proposed. New residential construction is reaching a historic high in the Mission Valley submarket, and Rio 9095 shares close proximity to approximately 10,700 residential units. The Property is near 6M SF of retail, over 200 restaurants, 3 bus stops, and 2 trolley stops. FENTON MARKETPLACE Over 590,000 sf of retail amenities QUALCOMM REDEVELOPMENT 15 LIGHT RAIL 8 TRANSIT & AMENITY-ORIENTED INFILL LOCATION FRIARS RD BUS STOP Located within walking distance of two retail power centers with abundant dining and shopping amenities (8-minute walk to the Rio Vista Shopping center and an 11-minute walk to Fenton Marketplace) 10-minute walk to two trolley stations 12-minute walk to Civita (4,000+ housing units at completion as well as numerous other apartment and condominium communities) Within an 8-min walk to 3 seperate MTS bus stops CIVITA DEVELOPMENT 400,000 SF office space 480,000 SF retail 600 single family homes 3,900 apartments units 805 SAN DIEGO MARRIOTT BUS STOP CAMINO DLE RIO N QUALCOMM WAY BUS STOP BUS STOP RIO VISTA SHOPPING CENTER 251,000 sf of retail amenities PROMENADE AT RIO VISTA APARTMENTS 970 Units 6
PACIFIC OCEAN CORONADO SAN DIEGO INTERNATIONAL AIRPORT RIVERWALK REDEVELOPMENT UNIVERSITY OF SAN DIEGO MISSION BAY DOWNTOWN SAN DIEGO LIGHT RAIL TO DOWNTOWN SCRIPPS MERCY HOSPITAL HILLCREST TOWN & COUNTRY RESORT / CONVENTION CENTER REDEVELOPMENT SAN DIEGO UNION TRIBUNE CAMPUS REDEVELOPMENT HAZARD CENTER STATION FASHION VALLEY 1.8 million sf retail 163 HAZARD CENTER PROJECT URBANIZATION OF MISSION VALLEY New residential construction is reaching a historic high in the Mission Valley submarket. There are over 7,700 units existing in Mission Valley, 762 units have been completed since 2015 and currently over 10 new developments currently under construction, planned or proposed. The increasing residential density will support additional office demand, thus driving higher occupancy and bolstered rent growth. UNDER CONSTRUCTION WESTFIELD MISSION VALLEY 1.6 million sf retail RIO VISTA TROLLEY STATION MISSION VALLEY CENTER STATION FRIARS RD RIO VISTA SHOPPING CENTER 251,000 sf of retail amenities CIVITA DEVELOPMENT 400,000 SF office space 480,000 SF retail 600 single family homes 3,900 apartments units Mission Valley Suites Hotel (236 keys) Millennium Mission Valley (291 apartments units 5,000 sf office 4,000 sf retail) SDUT Campus Redevelopment (330,000 sf office) 8 Civita Development (400,000 sf office 480,000 sf retail 3,900 apartment units) CAMINO DEL RIO N LIGHT RAIL PLANNED Riverwalk Redevelopment (2,500 apartment units office hotels) Hazard Center Project (473 total residences) Town & Country Resort & Convention Ctr (renovated hotel 900 apartments units) PROPOSED Qualcomm Stadium Redevelopment (mixed-use) 4835 Glasoe Lane (retail & office) RIO SAN DIEGO RD RETAIL AMENITY 805 FENTON MARKETPLACE Over 590,000 sf of retail amenities 7
MAJOR PROJECTS DRIVING THE EVOLUTION OF MISSION VALLEY CIVITA MASTER PLANNED DEVELOPMENT Developer Site Area No. of Projects Estimated Cost Sudberry Properties 230 acres 15 (residential & commercial) $2+ Billion Initial Start Date 2010 Expected Completion 2020-2025 4,870 residential units (single family homes, condos, apartments, and affordable housing) 480,000 SF retail center 420,000 SF for a potential office/business campus Public Parks Civic Center with amphitheater Recreation Center Accommodating nearly 15,000 new residents, nearly doubling the current population RIVERWALK GOLF CLUB DEVELOPMENT Developer Site Area Estimated Cost Initial Start Date Expected Completion Hines & Levi-Cushman Family 200 acres TBD TBD TBD Ideas being considered include 4,000 residential units and 1 million SF office buildings, 100k SF retail space and a 75-acre park Initial plan includes building a new trolley stop in the development Ultimate plan is now in the works and will need approval by the City Council 8
QUALCOMM STADIUM SITE Developer Site Area Expected Start / Completion PROPOSAL 1: MIXED USE UNIVERSITY SITE Development Team: JMI Realty, SDSU and UCSD Replacing the stadium with student/faculty housing and research/academic space 35,000 seat stadium Potential hotel & commercial space TBD 166 acres TBD PROPOSAL 2: MAJOR LEAGUE SOCCER STADIUM (SOCCERCITY) Developer: FS Investors $200M soccer stadium part of a total $1B redevelopment Stadium facility containing 20,000 to 30,000 seats Projected to open 2020 Home to a MLS team as well as SDSU football and soccer 4,800 homes, 55 acres of parks 3 million SF of commercial UNION TRIBUNE PROJECT AMP&RSAND Developer Casey Brown Company Site Area 13 acres Estimated Cost $35 Million Initial Start Date 2016 Start Date 2017 Expected Completion 2019 Two building, 330,000 SF office campus Estimated asking rents in the high $3.00 +E range Industrial loft-style feel, exposed brick, concrete-pillars, 13-foot ceilings and oversized windows 64,000 SF of outdoor collaborative space On-site amphitheater Abundance of on-site amenities: fitness studio, spa-like lockers, café, valet, bike center 9
MISSION VALLEY S MOST WALKABLE, AMENITY-RICH LOCATION Rio 9095 benefits from a strong array of local amenities including walkable access to Rio Vista Shopping Center and Fenton Marketplace which include retail and service amenities. The Property also includes walkable access to two different trolley stations, three different bus stops and routes to nearby Westfield Mission Valley and Fashion Valley shopping centers. POPULATION IS EXPECTED TO GROW BY 5% OVER THE NEXT 5 YEARS! MISSION VALLEY SNAPSHOT 3 MILE RADIUS 233,931 FULL TIME POPULATION 163,848 DAY TIME POPULATION 8.84% POPULATION GROWTH SINCE 2010 8 CAMINO DEL RIO S CAMINO DEL RIO N 10.7K RESIDENTIAL UNITS 6M SF RETAIL 7K HOTEL ROOMS 200 RESTAURANTS 12 TROLLEY STOPS DRIVE TIMES TO/FROM RESIDENTIAL NODES DOWNTOWN EAST COUNTY CARMEL VALLEY 15 CORRIDOR NORTH BEACH CITIES RANCHO SANTA FE 10 minutes 13 minutes 16 minutes 20 minutes 21 minutes 26 minutes 10
FASHION VALLEY 1.8 MILLION SF RETAIL HAZARD CENTER 163 AQUATERA, 254 APTS RIVER FRONT CONDOS 163 HAZARD CENTER STATION PARK VILLAS NORTH, 296 CONDOS WEST PARK, 612 APTS VERSA AT CIVITA, 150 APTS CIRCA37, 306 APTS LUCENT I, 30 APTS PARK VILLAS SOUTH, 250 CONDOS FOOD COURT 28 RESTAURANT OPTIONS HOME MISSION VALLEY CENTER STATION MISSIONS AT RIO VISTA, 464 CONDOS WESTFIELD MISSION VALLEY 1.6 million sf retail with 131 stores & services THE LIDO, 220 APTS CAMINO DEL ESTE MISSION WALK, 56 CONDOS FRIARS RD CIVITA DEVELOPMENT 400,000 SF office space 480,000 SF retail 600 single family homes 3,900 apartments units CAMINO DE LA REINA RIO VISTA TROLLEY STATION THE PROMENADE, 970 APTS SAN DIEGO RIVER RIO SAN DIEGO RD QUALCOMM WAY RIVER COLONY, 300 CONDOS LIGHT RAIL 8 805 11
INVESTMENT ADVISORS NICK FRASCO Senior Director nfrasco@hfflp.com 858.812.2354 CA. License #01819400 KARA MATHIS, CFA Senior Associate kmathis@hfflp.com 858.242.6220 CA. License #01924947 NICK PSYLLOS Senior Managing Director npyllos@hfflp.com 858.812.2352 CA. License #00788060 TAYLOR BERGTHOLD Real Estate Analyst tbergthold@hfflp.com 858.812.2356 CA. License #02014647 MICHAEL LEGGETT Senior Managing Director mleggett@hfflp.com 415.276.6924 CA. License #01056334 DEBT ADVISORS PATRICK BURGER Senior Director pburger@hfflp.com 858.812.2347 CA. License #01820848 ZACK HOLDERMAN Senior Director zholderman@hfflp.com 858.812.2350 CA. License #01434957 LEASING ADVISORS RICHARD GONOR JLL richard.gonor@am.jll.com 858.410.1243 CA. License #01240176 TONY RUSSELL JLL tony.russell@am.jll.com 858.410.1213 CA. License #01275372 BRANDT RIEDMAN JLL brandt.riedman@am.jll.com 858.410.1247 CA. License #01931435 2018 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 26 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 advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF. HFF has been engaged by the owner of the property to market it for sale. Information concerning the property 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. 4350 La Jolla Village Drive Ste. 450 San Diego, CA 92122 hfflp.com 858.552.7690 858.552.7695