Business Center
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BUSINESS CENTER 156,036 SF SINGLE-STORY OFFICE PORTFOLIO IN RALEIGH-DURHAM WITH NEAR TERM UPSIDE POTENTIAL RALEIGH-DURHAM, NORTH CAROLINA GREEN ROAD SPRING FOREST BUSINESS CENTER OVERFLOW PARKING EXECUTIVE SUMMARY THE INVESTMENT OPPORTUNITY Spring Forest Business Center offers investors a value-add opportunity within one of the top submarkets of the Raleigh-Durham MSA featuring historically stable credit tenants and immediate upside potential Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a North Carolina licensed SPRING FOREST ROAD real estate broker (“HFF”) has been retained as the exclusive sales representative for Spring Forest Business Center, a 156,036 square foot, 94.7% occupied institutional-quality, single- story office portfolio exceptionally located along the US-1/Capital Boulevard corridor in North INVESTMENT SUMMARY Raleigh. As a rare below replacement cost opportunity, the three (3) building park boasts a strong 90%+ historical occupancy since 2008, with multiple tenants having been in the park BUILDING ADDRESS 3100-3200 Spring Forest Rd. for more than 15 years. A significant driver of the property’s strong historical performance is its Raleigh, NC 27616 market-leading parking ratio of 5.85 / 1,000 SF up to 7.11 / 1,000 SF via an easement providing access to overflow parking, thus allowing tenants to maximize efficiency within their space. RENTABLE SQUARE FOOTAGE 156,036 Further, the asset features in-place rents that are 17.2% below market and two remaining OCCUPANCY 94.7% vacancies totaling 8,307 square feet, providing investors with an immediate opportunity to create value through leasing. BUILDINGS Three (3) WEIGHTED AVERAGE 4.73 Years Spring Forest Business Center is strategically positioned along the US-1/Capital Boulevard REMAINING LEASE TERM corridor with access to a network of major transportation thoroughfares and seamless PARKING RATIO 5.85 / 1,000 SF up to 7.11 / 1,000 SF connectivity to major residential and commercial hubs such as North Hills, Downtown Raleigh, (inclusive of overflow parking available Wake Forest and the Research Triangle Park. Additionally, the property is located amidst one via easement) of North Raleigh’s most amenity rich locations, with more than 15 restaurants within walking distance and over 16.2 MSF of retail within 5 miles of the property. Located in the 91% leased NO. OF TENANTS 10 US-1/Capital Boulevard submarket, Spring Forest Business Center has the opportunity to LARGEST TENANTS Allstate Insurance Company capitalize on strong tenant demand which has increased rental rates by 40% over the last 5 (24,806 SF, 12/31/2021 LXD) years (7.0% CAGR). Critical Health Systems, Inc. (41,591 SF, 6/17/2018 LXD) Adreima (30,721 SF, 9/30/2026 LXD) YEAR 1 NOI $1,478,077 SPRING FOREST BUSINESS CENTER | 2 HISTORICALLY STABLE INVESTMENT WITH CREDIT TENANCY AND UPSIDE POTENTIAL Three (3) building, 156,036 square foot, single-story office park currently 94.7% leased Near-term upside opportunity via the lease-up of 8,307 square feet of vacancy and potential to capitalize on 17.2% below market rents Highly desirable parking ratio that ranges from 5.85/1,000 SF up to 7.11/1,000 SF through ability to utilize an adjacent overflow parking lot by way of an easement Incredibly stable, 90% historical occupancy since 2008 Allstate (S&P:A-) and Critical Health Systems (a subsidiary of Mednax, S&P:BBB-) combine for over 32 years of tenancy within the property 44% of the leased square footage is occupied by tenants who have over ten (10) years of tenure within the building The property presents a below replacement cost acquisition opportunity in an infill North Raleigh location SPRING FOREST BUSINESS CENTER | 3 HIGH-QUALITY PARK WITH RECENT CAPITAL INVESTMENT Ability to accommodate a wide variety of uses including office, R&D, showroom, call center or warehouse space Boasts floor-to-ceiling glass, comfortable patio areas, high finished ceiling heights and newer upfits that showcase significant recent capital invested into tenant spaces Exceptional visibility and generous parking ratios of 5.85/1,000 SF (up to 7.11 / 1,000 SF with full overflow lot capacity) The property has experienced recent capital improvements such as asphalt seal coat & restripe of the parking lots and a new roof (3100 building), with two of the three roofs under warranty until 2023 and 2034 respectively SPRING FOREST BUSINESS CENTER | 4 TIGHT MARKET WITH RISING RENTAL RATES Flex/single-story office in Raleigh-Durham has experienced a 16.8% growth in NNN rental rates and a 9.8% growth in office rental rates over the past 2 years At 91.8% occupancy, the Raleigh-Durham flex/single-story office market is experiencing historically high rental rates that average approximately $13.00 psf NNN Spring Forest Business Center is located in the second largest flex submarket in Raleigh-Durham, with over 3.2 MSF of flex/ single-story office inventory Currently, the US-1/Capital Boulevard submarket has zero buildings under construction and hasn’t delivered a flex/single- story office building since Q3 2013 As of Q4 2016, the historical average annual occupancy of Spring Forest Business Center is 90% SPRING FOREST BUSINESS CENTER | 5 EXCELLENT LOCATION Quick accessHillsborough to a network of Raleigh’s major transportation thoroughfares, including US Route 1 (0.4 miles), Interstate 540 (6.9 miles), Interstate 440 (4.9 miles), and US Route 401 (2.2 miles), which seamlessly connects the property to Raleigh’s major residential and commercial hubs including North Hills, Downtown Raleigh, and the Research Triangle Park High visibility off of the heavily trafficked Spring Forest Road, located at the epicenter of Raleigh’s US-1/Capital Blvd submarket Walking distance to over12 pt 15 restaurants with Triangle Town CenterDURHAM and Northridge Country Club less than three (3) miles away 1 Easy commute to all residential areas within the Triangle giving employers the unique ability to draw employees from the entire 70 MSA which has one of the hottest job markets in the U.S., having added over 45,500 jobs in the past two years and currently boasting a healthy 4.0% unemployment rate DOWNTOWN RALEIGH Transit-oriented site with immediate access to two bus stops Minutes to the CHAPELregion’s cutting-edge HILL medical and academic 1 research institutions such as Duke University and Duke University Research 540 40 Triangle Park Health System, University of North Carolina and UNC Hospitals, and 540 North Carolina State University – affording companies with access to a vast pool of intellectual talent RALEIGH-DURHAM 401 INTERNATIONAL AIRPORT 70 40 UMSTEAD WAKE FOREST 1 4.0% 45,500+ $1B+ P ARK 440 UNEMPLOYMENT JOBS ADDED RECENT RELOCATION/ SPRING FOREST RATE (LAST 24 MONTHS) EXPANSION ACTIVITY 40 Morrisville 401 540 401 440 CARY 40 Knightdale O O O RALEIGH N .1 N .1 N .3 440 BEST CITY FOR JOBS AMONG MID-SIZED LABOR MARKET IN GLASSDOOR, MAY 2015 AMERICAN CITIES OF THE UNITED STATES THE FUTURE FORBES, FEBRUARY 2015 THE FINANCIAL TIMES, APRIL 2015 40 64 Apex 40 SPRING FOREST BUSINESS CENTER | 6 Garner 70 401 Holly Springs 40 TRIANGLE TOWN CENTER TO WAKE FOREST 540 NORTHRIDGE COUNTRY CLUB WAKEFIELD COUNTRY CLUB BELK, MACY, DILLARDS, SAKS FIFTH AVENUE, STARBUCKS INDOOR SHOPPING MALL, 22+ RESTAURANTS BEST BUY HHGREGG TARGET, CARTER’S, ROSS, PLANTATION POINT OLD NAVY, PIER 1, TOYS R US SHOPPING CENTER CHIPOTLE MEXICAN GRILL, DICK’S SPORTING GOODS COURTYARD MARRIOTT PANERA BREAD COMPANY 1 CAPITAL BLVD. OAK FOREST ESTATES TO 440 WELLS FARGO BANK TO DOWNTOWN RALEIGH SPRING FOREST BUSINESS CENTER SPRING FOREST ROAD HOME DEPOT SPRING CAFE, STROMBOLI’S GREEN ROAD OVERFLOW PARKING TO NORTH HILLS (5.0 MI) investment advisors analysts financing leasing information Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a North Carolina licensed real estate broker (“HFF”). CHRIS NORVELL, SIOR SCOT HUMPHREY MIKE MASSARDO ROGER EDWARDS HILLMAN DUNCAN ©2017 HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF Senior Managing Director Director Real Estate Analyst Director Cushman & Wakefield operates out of 24 offices nationwide and is a leading provider of commercial real 919.573.4647 estate and capital markets services to the U.S. commercial real estate industry. 704.526.2818 919.573.4641 704.526.2816 919.791.2105 HFF together with its affiliate HFFS offer clients a fully integrated national capital [email protected] [email protected] [email protected] markets platform including debt placement, investment sales, equity placement, [email protected] [email protected] advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter at twitter.com/hff. HFF has been engaged by the owner of the properties to market them for sale. In- VALERIE DERRICK DENNIS HURLEY PATRICK NALLY formation concerning the property [properties] described herein has been obtained Associate Director Real Estate Analyst Cushman & Wakefield from sources other than HFF, and neither Owner nor HFF, nor their respective equity 919.791.2103 holders, officers, employees and agents makes any representations or warranties, 704.526.2815 704.526.2837 express or implied, as to the accuracy or completeness of such information. Any [email protected] [email protected] and all reference to age, square footage, income, expenses and any other property [email protected] 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 pur- chaser,SPRING and HFF,FOREST its partners, BUSINESS officers, employees CENTER and agents | 7 disclaim any liability that may be based upon or related to the information contained herein.