Charlotte | North Carolina
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south CHARLOTTE | NORTH CAROLINA SOUTH TRYON SQUARE | 1 EXECUTIVE SUMMARY THE INVESTMENT OPPORTUNITY 89% leased amenity-rich Class A opportunity featuring credit, upside and significant leasing momentum Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp. a North Carolina licensed real estate broker (“HFF”) has been retained as the exclusive sales representative for South Tryon Square, a premier, multi-tenant office building located in Charlotte, North Carolina. South Tryon Square is a “best in class” office building that benefits from Charlotte’s dynamic, thriving, and expanding economy. These factors, complemented by ideal market fundamentals, are the catalysts that make Charlotte’s CBD an extremely attractive office investment market for the near and long-term. Located at the epicenter of Uptown Charlotte, the asset is poised to experience strong future rent growth as investment continues to flow into the region and the office market tightens. South Tryon Square is a fifteen-story, Class A CBD office building developed in 1961, and extensively renovated in 1999. The renovation consisted of a complete re-skinning of the building and a full- remodel of the interior common areas/tenant spaces with premium finishes and several new building systems. Additional improvements occurred in 1999, including an eleven-level parking garage, hotel (air rights under separate ownership), and a 5th floor roof terrace. The offering’s parking garage consists of 698 parking spaces and a market leading parking ratio of 2.94 per 1,000 square feet — a very rare amenity within the Charlotte CBD. The Property features 237,186 rentable square feet and is easily accessible with its proximity to all major thoroughfares and local transit systems. Currently 89% occupied, the asset sits in the heart of Charlotte’s Central Business District, within walking distance of Charlotte’s most visible points of interest including Bank of America’s headquarters, Wells Fargo’s East Coast Headquarters, Time Warner Cable Arena, and Bank of America Stadium. South Tryon Square offers prospective investors a truly unique opportunity to acquire one of the most highly amenitized and accessible buildings, with a strong investment grade credit tenancy, in burgeoning downtown Charlotte. Current market conditions further complement the incredible opportunity to lease up existing vacancy at attractive, rapidly rising rates. Downtown rental rates have grown more than 16.9% in the past twenty-four months, and the current Downtown vacancy rate is at a six year low of 8.7%, creating a highly favorable leasing scenario. SOUTH TRYON SQUARE | 2 GENERATIONAL TROPHY OFFERING South Tryon Square offers prospective investors an extremely rare investment opportunity ideally located in the heart of the Charlotte CBD. This unique offering presents a new owner immense upside through near-term rollover, market rent growth and lease-up. Infill real estate investments of this caliber with underlying upside are few and far between. The Charlotte office market’s fundamentals are flourishing and poised for further growth, creating the perfect landscape to invest and capitalize on the area’s booming economy. INVESTMENT SUMMARY ADDRESS OCCUPANCY 201 South Tryon, Charlotte NC (Office) 89% 237 South Tryon, Charlotte NC (Parking Garage) STORIES YEAR BUILT 15 Stories 1961, extensive renovation in 1999 PARKING NET RENTABLE AREA 698 parking spaces, including 12 disabled-accessible 237,186 RSF parking spaces (a 2.94 spaces per 1,000 square feet parking ratio). Additional parking provided via direct access on the 2nd floor to BB&T garage (1,520 spaces). LOCATION Note: South Tryon Square parking ratio equal to Heart of Charlotte CBD at the SW corner of 2.35/1000 SF with the inclusion of the hotel parking South Tryon and East 4th Streets allocation. ACRES FLOOR PLATES 1.34 total acres Flexible floor plate sizes: 201 S. Tryon: 0.59 acres 20,304-24,215 SF (Lower Floors 1-4) 237 S. Tryon: 0.75 acres 9,821-13,006 SF (Upper Floors 5-15) AMENITIES The Building features two on-site premier restaurants, Dean & Deluca and Vapiano, and a host of other amenities, including a Courtyard by Marriott hotel (on-site), expansive outdoor fifth floor roof terrace, on- site property management, on-site maintenance staff, 24-hour security, and a conference facility. SOUTH TRYON SQUARE | 3 BEST POSITIONED OFFICE BUILDING WITHIN CHARLOTTE’S CBD South Tryon Square’s central location in downtown Charlotte is within walking distance from all major public transportation centers, including the bus, trolley, and the light rail, providing convenient access to nearly all of downtown Charlotte’s amenities and attractions. EXCELLENT ACCESSIBILITY TO MAJOR THOROUGHFARES South Tryon Square has efficient connectivity to all major area thoroughfares, including Church Street, Tryon Street and College Street. The property also features convenient access to I-277, I-77, I-485 and the I-85 corridor. The asset is 17 minutes from the Charlotte Douglas International Airport, 15 minutes from SouthPark (Charlotte’s Premier Shopping destination), and walking distance to any major downtown destination. Furthermore, South Tryon Square sits just two blocks from the nearest Light Rail Station (3rd street), which currently stretches 11 miles from South Charlotte to Uptown Charlotte. A 9.3 mile Blue Line extension is currently under construction, and when complete will run from South Charlotte to the UNC Charlotte campus. With over 5.1 million riders per year, the existing rail lines have proven the benefit that alternate transit offers. SOUTH TRYON SQUARE | 4 CBD MARKET RENTS ROLLOVER SCHEDULE PER SQUARE FOOT (CUMULATIVE % OF TOTAL SF) $33.00 $32.50 YEAR 4 | 46.20% $32.00 $31.50 $31.00 $30.50 $30.00 YEAR 3 | 33.40% $29.50 $29.00 CLASS A RENTAL RATES $29.43 $28.50 $28.00 $27.50 YEAR 2 | 25.50% $27.00 $26.50 $26.00 $25.50 $25.00 YEAR 1 | 15.20% $24.50 VALUE-ADD OPPORTUNITY VALUE-ADD $24.00 $23.50 SOUTH TRYON SQUARE $23.00 IN-PLACE RENT $23.13 EXTREMELY RARE “MARK-TO-MARKET” OPPORTUNITY Currently, South Tryon Square features in-place rents of $23.13/ SF which is an astounding 27.2% below the market average rental rate of $29.43/SF. Furthermore, 46% of current leases will roll within the next four years. Coupled together, South Tryon Square offers prospective investors immense upside through this rare “mark- to-market” opportunity and an immediate opportunity to lease up 26,550 square feet of vacant space. SOUTH TRYON SQUARE | 5 FLOURISHING CBD MARKET FUNDAMENTALS Uptown Charlotte asking rents have grown by an astounding 16.9% in the past twenty-four months, to now average $28.13/SF. Uptown Class A BUILDING/GARAGE ADDRESS BUILDING SIZE NUMBER OF RATIO asking rents continue to lead the greater market with 17.2% rent growth SPACES over the same time frame, to now average $29.43/SF. Organic growth SOUTH TRYON SQUARE 237 South Tryon Street 237,186 698 2.94/1,000 and minimal new supply have been primary drivers for rent growth BB&T CENTER 200 South College Street 568,384 1,520 2.67/1,000 and absorption in the Charlotte CBD. Uptown Charlotte vacancy has COMBINED TOTAL 2,218 compressed from 13.2% in 2010 to 8.7% in Q1 2016, while Uptown Class WAKE FOREST UNIVERSITY CENTER GARAGE 200 North College Street 458,158 801 1.75/1,000 A vacancy improved dramatically from 16.9% in 2010 to 9.1% in Q1 2016. CARILLON 227 West Trade Street 476,308 813 1.71/1,000 AT&T PLAZA 300 South Brevard Street 355,300 576 1.62/1,000 525 N. TRYON BUILDING 525 North Tryon Street 405,134 609 1.50/1,000 TRANSAMERICA 401 North Tryon Street 434,048 641 1.48/1,000 FIFTH THIRD CENTER GARAGE 201 North Tryon Street 697,817 1,028 1.47/1,000 HEARST TOWER 214 North Tryon Street 970,002 1,384 1.43/1,000 BANK OF AMERICA CORPORATE CENTER 100 North College Street 1,143,752 1,351 1.18/1,000 MARKET LEADING PARKING GARAGE CHARLOTTE PLAZA 201 South College Street 693,279 814 1.17/1,000 WITH SIGNIFICANT UPSIDE ONE WELLS FARGO CENTER GARAGE 301 South College Street 1,018,120 1,079 1.06/1,000 THREE WELLS FARGO CENTER GARAGE 401 South Tryon Street 930,733 796 0.86/1,000 400 SOUTH TRYON 400 South Tryon Street 583,911 495 0.85/1,000 South Tryon Square has one of the best positioned parking garages 121 WEST TRADE 121 West Trade Street 330,483 264 0.80/1,000 in the city. The garage offers a market leading parking ratio of 2.94 per TWO WELLS FARGO CENTER DECK 301 South Tryon Street 758,508 539 0.71/1,000 1,000 SF, nearly 2.5x the CBD average of 1.23 parking spaces per 1,000 101 INDEPENDENCE CENTER 101 North Tryon Street 565,694 320 0.57/1,000 SF. The garage’s parking ratio is 10% higher than BB&T Center (2nd BANK OF AMERICA PLAZA 101 South Tryon Street 891,136 459 0.52/1,000 highest ratio) and 68% higher than Wake Forest University Center TOTAL 11,517,953 14,187 1.23/1,000 garage (3rd highest ratio). SOUTH TRYON SQUARE | 6 6TH STREET OVERSTREET MALL AMENITIES SOUTH TRYON SQUARE Vapiano Dean & Deluca 01 A/B OVERSTREET MALL 01A HEARST TOWER CONNECTIVITY Fuel Pizza Modern Salon Pita Pit Blue Restaurant & Bar Showmars Soho Bistro Bank of America Gallery Hearst Tower Newstands Jewel Treats 5TH STREET 01B HEARST PLAZA Port City Java Malabar Spanish Cuisine SOZO Gallery RiRa’s Sandwich Bar Luce Restaurant and Bar Something Classic Café 02 BANK OF AMERICA CORPORATE CENTER/ 02 FOUNDERS HALL Caribou Coffee City Barbers Jamba Juice Aria Ivy and Leo’s City Smoke BBQ Joseph A Bank Clothiers Taste Julie’s Too Bank of America Company Blossom Shop Store Blis Sunrise Cleaners & TRADE STREET Hendrix Business Alterations