CEDAR PORT DISTRIBUTION PARK A Net Leased Investment Offering Leased to IKEA hfflp.com , • EXECUTIVE SUMMARY Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker (“HFF”). PROPERTY SUMMARY CEDAR PORT DISTRIBUTION PARK

Rentable # of Avg. Lease Finish-out Building Clear Column Building Address Year Built % Leased Building Type Truck Court Land Area Area Tenants Term Office Depth Height Spacing

4762 Borusan Rd. Class A Tilt-Wall Industrial 190' A 2017 495,462 SF 100.0% 1 5.0 Years ±1.4% 410' 32' 50' X 52' 26.41 Acres Baytown, TX 77523 Warehouse (135' + 55' Trailer Parking)

4830 Borusan Rd. Class A Tilt-Wall Industrial 190' B 2017 501,020 SF 100.0% 1 5.0 Years ±1.4% 410' 32' 50' X 52' 28.16 Acres Baytown, TX 77523 Warehouse (135’ + 55’ Trailer Parking)

TOTAL/AVERAGE 996,482 SF 100.0% 5.0 Years ±1.4% 54.57 Acres

CEDAR PORT INDUSTRIAL PARK

BORUSAN ROAD

410’ 410’

55’ 135’ 190’ BUILDING B

BUILDING A

Potential Rail

2 2 INVESTMENT HIGHLIGHTS CEDAR PORT DISTRIBUTION PARK

HFF is pleased to present the opportunity to purchase a 100% fee-simple interest in Cedar Port Distribution Park (the “Property”), a recently constructed, state-of-the-art industrial project strategically located near the Port of Houston and . The two-building project, totaling 996,482 square feet, is 100% leased to IKEA Distribution Services, Inc. and has the ability to add rail service.

Globally Strategic Facility Class A Asset

Continuing the Company’s expansion in the U.S., IKEA selected this location in Cedar Port Cedar Port Distribution Park is being developed by Clay Development within a 54.57 acre, deed- Distribution Park as its only distribution center in Texas and one of seven in the . restricted industrial park with professional management. The Property’s competitive qualities This location will allow IKEA to distribute its products across the globe utilizing the direct access include 2017 construction, dock-high front load configuration with 32’ clear height, 190’ truck to the Houston Ship Channel and BNSF- and Union Pacific-served rail lines. The Property is court, T-5 lighting, ESFR sprinklers, and ± 1.4% office finish. Cedar Port Distribution Park combines currently not rail-served but both buildings are designed to accommodate rail in the future, inherent features with a park-like setting and multi-modal access to serve as a highly-competitive, which has historically resulted in a rent premium of approximately 6-10%, according to local institutional industrial property. leasing experts. Cedar Port Distribution Park features ideal building depth, efficient loading, 32’ Strong International Tenant clear height with high-pile racking, and low office finish, allowing IKEA to capitalize on its efficient packing and distribution system and positioning the Property perfectly for future tenant demand. Cedar Port Distribution Park is 100% leased to IKEA, the world’s largest furniture retailer and designer of ready-to-assemble furniture, appliances, and home accessories. The Company has operations Premier Distribution Park Location in 48 countries, including four retail stores in Texas; and this will be IKEA’s seventh distribution Approximately 20 miles east of Houston in Chambers County, Cedar Port Distribution Park sits center in the U.S., including a recently constructed 1.25 million square foot distribution center directly across from the Bayport and Barbours Cut container terminals and adjacent to the in Joliet, IL. The Company’s rapid expansion has been complemented by over a decade of year- Houston Ship Channel. The Property has direct access to Interstate 10, State Highway 225 and over-year revenue growth, including 12% revenue growth from FY14 to FY15. IKEA has made 146 and the ability to utilize more than 57 miles of BNSF- and Union Pacific-served rail lines. sizable investments in their space including exhaust fans for electric forklift chargers and dock Totaling approximately 54.57 acres, Cedar Port Distribution Park is a recently-purchased tract levelers and shelters on each door, ensuring its commitment to the Property and the location. within the larger TGS Cedar Port Industrial Park, and the only parcel within the park that has IKEA also received a tax incentive from Chambers County to locate within its boundary, which both rail service available and is located directly on a heavy haul corridor. remains with the property should the tenant vacate. Chambers County is known for being one of the most business-friendly counties in the Houston MSA. With a total expanse of 15,000 acres, TGS Cedar Port Industrial Park is ¾ the size of Manhattan, and one of the largest intermodal transportation logistics facilities in the world. In addition to IKEA, major retailers Walmart and Home Depot have also made commitments to TGS Cedar Port Park, occupying over 4.75 million square feet between three buildings. Additionally, GE, National Oilwell Varco, Delta Chemical, Ozburn Hessey Logistics, FlexSteel, Palmer Logistics, Bayer and Inox maintain a significant presence in Chambers County.

3 INVESTMENT HIGHLIGHTS CEDAR PORT DISTRIBUTION PARK

Strong Market Dynamics

Houston’s industrial market remains one of the healthiest U.S. industrial markets, thanks in The Southeast submarket is the third-largest in Houston, with 799 buildings and approximately large part to the strength of the petrochemical industry, nation-leading population growth and 78.8 million square feet total. In the trailing twelve months ended September 2016, the increased port activity. Overall occupancy remained stable at 94.5% in the third quarter, and submarket absorbed 2.0 million square feet, the second-highest in the city. Over the past year, asking rents for flex ($9.59 PSF NNN) and warehouse ($6.19 PSF NNN) are among the highest the Southeast submarket saw 3.2 million square feet of deliveries, the second-highest figure rates in the region’s history. Out of the seven industrial submarkets, four absorbed in excess of among submarkets and equal to about a quarter of new deliveries citywide. Absorption continues 1.4 million square feet during the last 12 months, which is an impressive testament to demand. to keep relative pace with deliveries, as a significant amount of new product delivering in the Southeast is comprised of build-to-suits or has a significant pre-leasing component. As a result, rents have increased 21% since 2012. AVERAGE RENT PSF AVERAGE RENT GROWTH O O SE O O SE 8 25 20 6 15 10 5 4 0 5 2 10 15 0 20 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 316 2007 2008 2009 2010 2011 2012 2013 2014 2015 316 Source: Costar, Inc. All rates Triple Net

4 LOCATION HIGHLIGHTS CEDAR PORT DISTRIBUTION PARK

TGS Cedar Port Industrial Park ADDITIONAL ACCESSIBILITY TGS Cedar Port Industrial Park benefits from a strategic location on the east side of Houston that A PREMIER PLANNED INDUSTRIAL PARK can be accessed via multiple major roadways in Houston. The main east to west thoroughfare Located adjacent to Baytown in Chambers County, TX, 20 miles east of downtown Houston, TGS in Houston is Interstate 10, which is located just seven minutes to the north. State Highways 225 Cedar Port Industrial Park (the “Park”) is the largest master-planned rail-and-barge-served industrial and 146 are eight minutes to the west and provide ease of access to the Port of Houston and the park in the U.S. and the fifth-largest in the world. The Park’s ideal location has superb access to Houston Ship Channel. Furthermore, a 12-mile segment of the Grand Parkway connecting Interstate major freeways, the Port of Houston, Class 1 railroad lines, and a pipeline distribution system. TGS 10 to SH 146, is already complete, of which 5.5 miles are within the Park. Cedar Port Industrial Park features a 200-acre Foreign Trade Zone designated area and heavy To take advantage of the rapidly expanding presence of petrochemical companies in the area, TGS haul corridor. Since early 2015, more than $42 million has been invested by TGS for infrastructure acquired property for a fee simple pipeline to , and is currently expanding the and access improvements, and an additional $40 million has been earmarked for the next twelve already extensive pipeline corridor running through the facility. The Park is located 6.5 miles from months. The centrally-located 54.57 acre-Cedar Port Distribution Park land was acquired from TGS the Mont Belvieu natural gas storage caverns and 3.5 miles from ExxonMobil Baytown, to name a and is the only parcel with a heavy haul corridor and available rail service within the master-planned few. industrial park.

DIRECT BARGE ACCESS TO THE PORT OF HOUSTON Port of Houston TGS Cedar Port Park is a short drive or barge trip from the Barbours Cut and Bayport Terminals, As one of the nation’s busiest ports, the Port of Houston is the region’s center for international the two primary container terminals of the Port of Houston. The Park also has two barge terminals business and trade. Located on the 52-mile-long Houston Ship Channel that links the port to the along its waterfront with the ability to handle overweight containers and developable waterfront , the port is a 25-mile-long diverse complex of public and private facilities covering sites remaining. One of the Park’s terminals is Chambers County Improvement District Public Dock 10,597 acres. The infrastructure includes eight cargo terminals, oil refineries, chemical plants 1 (CCID 1), a public barge facility available to all qualified operators, as well as a public bonding and grain elevators. The port is ranked first in the United States in foreign waterborne tonnage entity to provide tax exempt financing for road, pipelines, sewer/water treatment plants, utility (19 consecutive years); first in U.S. imports (23 consecutive years); first in U.S. export tonnage (6 infrastructure, and rail and barge development. CCID recently invested $50 million of public funds consecutive years) and second in the U.S. in total tonnage (23 consecutive years). for infrastructure improvements including the public barge dock and its recent expansion. Additional 2015 Rankings: RAIL ACCESS AND CONTINUING IMPROVEMENTS • Largest Texas port with 44% of market share by tonnage and 95% market share in containers by TGS oversees 60 miles of operating rail and a 2,000 rail car storage facility within the Park and total TEUS in 2015 can tailor operations to meet customer needs. The railroad networks leaving the park have dual o The Texas port is poised to increase its dominance when new and expanded plants in the area service from Union Pacific and BNSF. A recent $22 million rail and site improvement expansion start churning out what’s expected to be 300,000 to 500,000 additional TEUs per year for was completed at the end of 2015 which included the construction of two additional 9,000 foot export by 2020. interchange tracks on the north end of the property. The improvement opened up over 4,000 • Largest Gulf Coast container port, handling 68% of US Gulf Coast container traffic in 2015 additional acres of the Park for future rail served customers and increased the carrying capacity • 2nd ranked U.S. port in terms of total foreign cargo value (based on U.S. Dept. of Commerce, of much of the existing railroad to 286,000-pound railcars from 263,000-pound standard loads. Bureau of Census) The partnership is committed to additional capital investment for 2016, including construction of • 6th ranked U.S. container port by total TEUs in 2015 40,000 feet of rail as the first phase of almost 90,000 feet of new track to store an additional 1,000 railcars by 2018.

5 SOLD / RAVAGO

FM 1405

HOME DEPOT PBP TGS CEDAR PORT LIQUIDS TERMINAL

GRAND PARKWAY

WALMART

CLAY DEV DHL

DHL IPSCO GE WALMART 105 6 CLEVELAND S&B WASHINGTON 105 NOV CONROE 105 770 336 SARATOGA

FM 1405 45 CCID #1 69 MAGNOLIA 242 BARGE DOCK 321 CEDAR PORT146 PINEHURST THE National 105 BORUSAN WOODLANDS NEW CANEY BARGEWildlife Refuge DOCK 290 770 SOUR LAKE MANNESMANN

TOMBALL PORTER HEMPSTEAD 326 6 SPRING WALLER LIBERTY DAYTON BORUSAN RD 90 HUFFMAN HEAVY HAUL DESIGNATED CORRIDOR 159 249 HUMBLE ATASCOCITA DANA George Bush CYPRESS International BELLVILLE Airport 59 99 ALDINE CROSBY 61 JERSEY VILLAGE 6 45 290 69 90 MONT BELVIEU HIGHLANDS 10

65 CEDAR PORT SEALY BROOKSHIRE KATY 10 10 HUNTERS CHANNELVIEW 330 99 George Bush JACINTO CITY DISTRIBUTION PARK Park CREEK VILLAGE HOUSTON CINCO RANCH GALENA PARK BAYTOWN 59 BELLAIRE 225 DEER PARK MISSION BEND 610 PASADENA 99 MEADOWS LA PORTE PLACE 90 146 PECAN GROVE William P. Hobby 8 36 Trinity Bay JSW SUGAR LAND Airport Anahuac National Wildlife Refuge STEEL RICHMOND 69 PEARLAND SEABROOK 90 ROSENBERG GREATWOOD USA FRESNO WEBSTER KEMAH EAST BERNARD FRIENDSWOOD CEDAR PORT 10 LEAGUE CITY BACLIFF 6 146 BOLIVAR RAIL STORAGE YARD 60 SAN LEON GOAT ISLAND PENINSULA MANVEL DICKINSON

ALVIN 3 6 NEEDVILLE 197 288 SANTA FE TEXAS CITY ROSHARON HITCHCOCK 36 BARGE CANAL 35 WHARTON GALVESTON 59 60 TRINITY BAY NORTH FACING AERIAL CEDAR PORT DISTRIBUTION PARK

CALPINE HOME DEPOT HEXION PETROCHEMICAL

PBP HIGHWAY 99 | GRAND PARKWAY DHL GE WALMART DISTRIBUTION CENTER NOV

FM1405 (HEAVY HAUL DESIGNATED CORRIDOR)

BORUSAN MANNESMANN

BORUSAN ROAD

BUILDING B BUILDING A

7 WEST FACING AERIAL CEDAR PORT DISTRIBUTION PARK

BAYPORT BARBOURS CUT HOUSTON SHIP CHANNEL

TRINITY BAY

CEDAR BAYOU BARGE CHANNEL

FM1405 (HEAVY HAUL DESIGNATED CORRIDOR)

BUILDING A

BORUSAN ROAD BUILDING B

8 INVESTMENT SALES LEASING/SUBMARKET EXPERT

TRENT AGNEW JOHN SIMONS Director NAI Partners Tel (713) 852-3431 Tel (713) 275-9634 [email protected] [email protected]

WALLY REID Senior Managing Director Tel (713) 852-3497 [email protected]

RUSTY TAMLYN, CCIM, SIOR Senior Managing Director Tel (713) 852-3561 [email protected]

WESLEY HIGHTOWER Real Estate Analyst Tel (713) 852-3495 [email protected]

DANE PETERSEN Real Estate Analyst Tel (713) 852-3436 [email protected]

9 Greenway Plaza, Suite 700 1900 West Loop South, Suite 500 Houston, Texas 77046 Houston, Texas 77027 Tel (713) 852-3500 Tel (713) 629-0500 Fax (713) 527-8725 naipartners.com hfflp.com

Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker (“HFF”). This Offering Memorandum has been prepared by HFF for use by a limited number of parties and has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it, and make no guarantee, warranty or representation about it. It is your responsibility to confirm, independently, its accuracy and completeness. All projections have been developed by HFF, Owner and designated sources, are based upon assumptions relating to the general economy, competition, and other factors beyond the control of Owner, and therefore are subject to variation. No representation is made by HFF or Owner as to the accuracy or completeness of the information contained herein, and nothing contained herein is or shall be relied on as a promise or representation as to the future performance of the property. Although the information contained herein is believed to be correct, Owner and its employees disclaim any responsibility for inaccuracies and expect prospective purchasers to exercise independent due diligence in verifying all such information. Further, HFF, Owner and its employees disclaim any and all liability for representations and warranties, expressed and implied, contained in, or for omissions from, the Offering Memorandum or any other written or oral communication transmitted or made available to the recipient. The Offering Memorandum does not constitute a representation that there has been no change in the business or affairs of the property or Owner since the date of preparation of the Offering Memorandum. Analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the prospective purchaser. Additional information and an opportunity to inspect the property will be made available upon written request to interested and qualified prospective investors. Owner and HFF each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligations to any entity reviewing this Offering Memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived. This Offering Memorandum and the contents, except such information, which is a matter of public record or is provided in sources available to the public, are of a confidential nature. By accepting this Offering Memorandum, you agree that you will hold and treat it in the strictest confidence, that you will not photocopy or duplicate it, that you will not disclose this Offering Memorandum or any of the contents to any other entity (except to outside advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement of confidentiality) without the prior written authorization of Owner or HFF and that you will use the information in this Offering Memorandum for the sole purpose of evaluating your interest in the property and you will not use the Offering Memorandum or any of the contents in any fashion or manner detrimental to the interest of Owner or HFF If you have no interest in the property, please return the Offering Memorandum forthwith. 12/16