TWO WESTLAKE PARK 1 EXECUTIVE SUMMARY
TWO WESTLAKE PARK
580 Westlake Park Blvd. • Houston, Texas 2
JLL Capital Markets, on behalf of Rialto Capital Partners, is pleased to present the opportunity to acquire a 100% fee simple interest in Two Westlake Park (“the Property”), a 454,843 square foot, Class A trophy office tower located in the heart of the Energy Corridor submarket of West Houston. Two Westlake is located within Westlake Park, a 2.8 million square foot Class A office complex situated on 58 acres in the epicenter of the Energy Corridor and is considered to be west Houston’s premier suburban office development. Until recently, Westlake Park’s occupancy was in the mid to upper 90%. In fact, Westlake Park produced a 96.3% average occupancy for the decade prior to 2016 when Conoco moved to their new headquarters. Resetting the basis of Two Westlake to a fraction of its’ competition will allow an investor the opportunity to lease the vacant space at rental rates and deal term structures that other buildings will not be able to match. TWO WESTLAKE PARK 3 INVESTMENT SUMMARY
PROPERTY BRIEF INVESTMENT HIGHLIGHTS Street Address: 580 Westlake Park Blvd. » Institutional-quality asset built by Hines and City, State, Zip Code: Houston, Texas 77079 designed by Skidmore, Owings, & Merrill County: Harris » Houston’s Energy Corridor Premier Office Park Rentable Square Feet: 454,843 SF Average Floor Plate: 22,469 SF » Minimal near-term capital required Year Built: 1982 » Master-planned deed-restricted business park Occupancy: 0% » Close proximity to executive housing Parking: 1,263 parking spaces (2.8 / 1,000 SF) » Stories: 17 Highly visible to I-10 with great ingress/egress Lot Size: 5.4 acres » Signage Opportunities 4 INVESTMENT HIGHLIGHTS
INSTITUTIONAL QUALITY ASSET BUILT BY HINES AND DESIGNED BY SKIDMORE, OWINGS, & MERRILL
Two Westlake affords investors an excellent, opportunistic opportunity to acquire a Class A office building in a deed restricted business park at a fraction of its replacement cost. With limited near-term capital requirements aside from lease-up costs, new ownership will be able to focus strictly on leasing. The new basis will allow an investor a significant competitive advantage which will increase leasing velocity and market share.
HOUSTON’S ENERGY CORRIDOR PREMIER OFFICE PARK
Westlake Park is considered the premier office park within west Houston due to its location, construction quality, and amenity base. The 58-acre park contains approximately 2.8 million square feet and sets itself apart from the competition by offering tenants a true campus and park-like setting, with superior ingress/ egress to Houston’s primary thoroughfares and upscale neighborhoods. The first three buildings were all constructed by Hines from 1981 to 1982. Four Westlake was developed by Patrinely in 1992, while BP developed Helios Plaza, the first LEED* Platinum certified building in 2009 which serves as BP’s trading facility, and then further committed to the park when it delivered its Supercomputing Center, the world’s largest supercomputer for commercial research, in late 2013. HP and Intel helped develop the processing power at the center of BP’s five-year, $100 million investment.
HIGHLY VISIBLE TO I-10 WITH GREAT INGRESS/EGRESS
One of the overall reasons for the historical success and growth of the Energy Corridor is its superior access and proximity to high-end residential communities. Two Westlake is positioned better than most in this regard being at the epicenter of the submarket and conveniently located along Interstate DRIVE TIMES TO MAJOR 10, Houston’s dominant east-west thoroughfare. As such, it enjoys some of the THOROUGHFARES AND SUBMARKETS best ingress/egress in the submarket, as there are multiple ways to access the Destination Drive Time park via Interstate 10, Memorial Drive, Eldridge and Highway 6. Memorial Drive I-10 1 Minute connects the park to the Memorial Villages to the east where many executives reside, while Interstate 10 runs west to a number of master-planned suburban Highway 6 3 Minutes communities, including Cinco Ranch, Houston’s best-selling community. The Beltway 8 6 Minutes location also allows for tremendous visibility from Interstate 10, which has over 447,000 vehicles traveling along it every day. West Park Tollway 11 Minutes
I-610 12 Minutes
Grand Parkway 13 Minutes
The Galleria 18 Minutes
Downtown 21 Minutes TWO WESTLAKE PARK 5 INVESTMENT HIGHLIGHTS
SINGLE TENANT OPPORTUNITY
With BP and ConocoPhillips vacating the Property within the last four years, investors will be left with a tremendous opportunity to offer the largest direct contiguous block of Class A space in the Energy Corridor to a single user. Additionally, Ownership will have the rare opportunity to offer building signage with visibility to more than 447,000 vehicles per day via I-10. Plus, the ability to offer signage rights will be a major advantage when competing for a major tenant.
MINIMAL NEAR-TERM CAPITAL REQUIRED
Two Westlake has been impeccably maintained with minimal near-term capital expenditures required. Over $11.0 million has been spent since 2006 on capital projects including a complete modernization of all building elevators, replacement of the chillers and cooling tower, replacement of the fire pumps, and a lighting retrofit. In addition, previous ownership spent $6 million to convert the former Westlake club space to cold shell, allowing new investors to capitalize on infrastructure already put in place. The space which is atop the garage features floor to ceiling glass, 14’5” - 15’-6” floor to deck heights on floors 6 and 7 respectively allowing for ceiling heights of at least 12’, and oversized restrooms with hard wall partitions. 6 HOUSTON OVERVIEW
HOUSTON IS NOT GOING ANYWHERE Houston has one of the most resilient economies in the country and it has shown time and time again. Two Westlake offers investors the ability to participate in the rebound of the Houston economy with a prominent asset at a record-low basis.
“Houston is going to be the metro region (across the US) to bounce back the fastest” – (Peter Zeihan, May 13, 2020)
TOP U-HAUL DESTINATION CITY POPULATION GROWTH
» Houston registered as the No. 1 U.S. Destination City » 4th most populous city in the nation, 5th most for U-Hauls in America in 2019 populous MSA in the nation » 11th straight consecutive year in the top spot » 2.3 million residents in the city, 7 million residents in the Houston MSA AIRPORT SYSTEM » Houston’s population is expected to grow 32% over the next decade and surpass Chicago as 3rd largest » 4th largest multi-airport system in the U.S. – 58.3 city by 2025 million passengers annually » Supports more than 230,000 regional jobs » One of 7 airports globally with direct flights to all 6 inhabited continents » Contributes more than $27 billion to the local economy TWO WESTLAKE PARK 7
EMPLOYMENT GROWTH THE WORLD’S LARGEST MEDICAL CENTER
» 3.2 million jobs in the Houston MSA, nearly a quarter of » $25 billion in local GDP Texas’ entire employment base » 8th largest business district in the U.S. » 2nd largest number of jobs created in 2018 out of any » MSA in the nation 10 million patient encounters per year » » 63,400 new jobs created in 2019, ranking 5th 106,000+ employees at the Texas Medical Center nationally » 2.0% growth YOY compared to the national average of CORPORATE HEADQUARTERS 1.4% » 22 Fortune 500 companies call Houston home
ECONOMY OF SCALE » 3rd largest number of Fortune 1000 companies in the nation » 26th largest economy in the world if Houston were an » 4th largest number of Fortune 500 companies in the independent nation nation » 7th largest U.S. metro economy in the nation » $480 billion GDP (2018) GLOBAL HUB FOR ARTS & CULTURE
» 2nd most number of theater seats of any U.S. city after PORT OF HOUSTON: THE NATION’S LEADING EXPORT New York City (14,000+) PORT » 500 institutions devoted to performing and visual arts, science, and history » Largest Gulf Coast Container Port » Houston’s 50,000+ acres of parks gives it more green » 1st in foreign waterborne tonnage space than any other top 10 U.S. metro » 1st in import and export 8 HOUSTON OVERVIEW
RESILIENT THROUGH RECESSIONS
Despite four economic recessions in the last 30 years, Houston has continually held strong as illus- trated in its’ steady employment growth throughout past downturns.
HOUSTON EMPLOYMENT VS. PRICE OF OIL (WTI) » Despite volatility of oil prices, Houston continues to add jobs, now at 3.2 million regionally
$140 Price of Oil (WTI) Total Non-Farm Employment 3.3
3.1 $120 Early 1990’s Dot-Com Financial Crisis Oil Downturn Recession Bubble 2.9 $100 2.7
$80 2.5 WTI/$BBL $60 2.3 Jobs/000,000s 2.1 $40 1.9
$20 1.7
$0 1.5
Houston has also established itself as a top city for consistent population growth proven by its’ more than double national population growth average and addition of almost 90,000 people from July 2018 to July 2019.
HOUSTON POPULATION GROWTH - 7.1 MILLION RESIDENTS
Population 0-4 Population 5-19 Population 20-34 Population 35-49 8,000,000 Population 50-64 Population 65-74 Population 75-85+
7,000,000
Early 1990’s Dot-Com 6,000,000 Financial Crisis Oil Downturn Recession Bubble
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
- 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Est. TWO WESTLAKE PARK 9 10 SITE PLAN
Additional Land Owned by BP
HELIOS WAY
PARKING G ARAGE RESIDENTIAL HELIOS PLAZA GRISB
Y RO PARKING (Land Owned by BP) AD
KEATING E 10 D
PARKING Former PARKING PARKING TAT G ARAGE Westlake Club GARAGE G ARAGE AD OPMENT INTERS GE RO A CIE LANE DEVEL WESTLAKE CHIL GRA FRONT THREE TWO FOUR WESTLAKE WESTLAKE WESTLAKE PARK PARK PARK
WESTLAKE PARK BOULEVARD
M EM O ARD LI VR I ADVANCIAL FEDERAL CREDIT UNION
E ONE WESTLAKE PARK
B P C E N T E R PARKING F O R H I G G ARAGE H PARKING P E R F O R M A N C E G ARAGE C O M P U T I N G
AMOCO DRIVE TWO WESTLAKE PARK 11 LIBERTY Lake COUNTY Houston MONTGOMERY State Park 12 COUNTY LOCATION MAP
HARRIS COUNTY
George Bush Intercontinental Airport
Lake Houston
Sheldon Reservoir
TWO WESTLAKE PARK 580 WestLake Park Boulevard H O U S T O N, T E X A S
Downtown George Bush Park Galleria San Jacinto Bay Texas Medical Center
FORT BEND William COUNTY P. Hobby Galveston Airport Bay
Bend Armand Bayou Park Clay Rd Clay Rd Bear Clear Creek Lake Park
N Fry Rd Groeschke Rd N Mason Rd Mason N
Smithers Barker Cypress Rd Lake Saums Rd
Eldridge Pkwy Eldridge GALVESTON TWO WESTLAKE PARK 580 WestLa ke Park Boule vard H O U S T O N, T E X A S COUNTY I-10 (Katy Freeway) BRAZORIA I-10 (Katy Freeway) COUNTY Grisby Rd Kingsland Blvd
Addicks Memorial
Reservoir
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D
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o
S Mason Rd Mason S
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Bria w
Westgreen Blvd Westgreen r
rest Dr k Fo r
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George S Fry Rd Bush Park
Harris County Dairy Ashford Dairy
Eldridge Pkwy Eldridge Westheimer Rd
Grand Pkwy Grand Richmond Ave Ft Bend County
S Fry Rd
Westheimer Rd
Westpark Tollway TWO WESTLAKE PARK 13 AERIALS
PARK 10
TWO WESTLAKE PARK
MEMORIAL DR
WESTLAKE PARK BLVD
THE GALLERIA CITYCENTRE
WESTCHASE
PARK 10
TWO WESTLAKE PARK TWO WESTLAKE PARK
MEMORIAL DR Contact information Investment Advisory
Martin T. Hogan H. Dan Miller, CCIM, SIOR Tom Weber Senior Director Senior Managing Director Analyst JLL Capital Markets JLL Capital Markets JLL Capital Markets [email protected] [email protected] [email protected] (713) 852‑3557 (713) 852‑3576 (713) 852‑3495
For Financing Inquiries
Susan Hill Senior Managing Director JLL Capital Markets [email protected] (713) 852-3564
9 Greenway Plaza, Suite 700 | Houston, TX 77049 | (713) 852‑3500 www.us.jll.com/capitalmarkets
Copyright © Jones Lang LaSalle IP, Inc. 2019 Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the property [properties] to market it [them] for [sale] [lease]. Information concerning the property [properties] described herein has been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, 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. JLL and owner 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. The Property may be withdrawn without notice. If the recipient of this information has signed a confidentiality agreement regarding this matter, this information is subject to the terms of that agreement. ©2019. Jones Lang LaSalle IP, Inc. All rights reserved.