CONFIDENTIAL OFFERING MEMORANDUM

MARQUEE UPTOWN 2306 McCue / , TX / 77056

FOR SALE: $32,000,000 Table of Contents

Executive Summary 3 Market Overview Location Highlights 4 Demographics 5 Condo Overview 6 Office Overview 8 Major Employers 9 Development 10 Uptown BRT 11 Financial Analysis 12 Offering Process 19

$667/ PSF EXECUTIVE SUMMARY AVERAGE CONDO SELLING PRICE Cushman & Wakefield Multifamily Advisory team is pleased to announce the 585 UNITS offering of Land development AVAILABLE HIGH-RISE INVENTORY opportunity. $131,000 AVERAGE HOUSEHOLD INCOME $125,000,000 ESTIMATED CAPITALIZATION COSTS 76 UNITS PER ACRE DENSITY 2.7 $205 $32M ACRES PROPOSED UNITS LAND COSTS

The 2.7 acre property is located in the central Houston Galleria market - blocks from its tallest iconic building. The location is central to Houston’s key employment centers. Currently occupied with 142 units of B class apartments, which will deliver 4% cash flow from existing apartments until construction commences.

Cushman & Wakefield 3 Location Highlights MARKET OVERVIEW

HOSPITALITY AND BUSINESS KEY 29 Marquee Uptown HIGH RISE CONDO 2 Astoria 3 HIGH RISE CONDO The Belfiore UNDER CONSTRUCTION 11 4 The Wilshire 19 5 Villa D'Este HOTEL 6 Montebello 7 LUXURY APARTMENT Cosmopolitan Lofts 5 8 OFFICE 21 9 Arabella TOP 5 LARGEST EMPLOYERS 10 The River Oaks 11 The Sophie at Bayou Bend DEVELOPMENT 6 3 34 12 JW Marriot Houston 13 Hilton Houston Post Oak 14 Royal Sonesta Hotel 7 33 35 15 Westin Galleria Hotel 26 39 16 Sheraton Suites Houston 17 Aloft Hotel 43 2 18 Houston Marriott West Loop 24 19 Omni Hotel 36 30 18 20 The St. Regis Houston 28 21 Hotel Granduca Houston 45 MARQUEE UPTOWN 20 22 AMLI Uptown 23 M5250 13 9 24 Gables Post Oak 25 WaterWall Place 32 4 26 Gables Tanglewood 14 27 Post at Afton Oaks 22 40 28 Hanover Post Oak 16 29 Astor Tanglewood 42 10 23 12 30 Tower 37 31 44 32 I,II,III 33 BHP Billiton Petroleum 17 15 DEVELOPMENT - LAND/OFFICE 34 31 35 Wells Fargo Bank Tower 42 River Oaks District $275M 36 Solutions 43 The Boulevard Project 25 $227M 37 Enbridge Inc 44 The Galleria $250M 38 BHP Billiton 45 Apachi headquarters 39 Landry's Inc. 27 40 BBVA Compass 41 Apache Corporation

Cushman & Wakefield 4 Demographics MARKET OVERVIEW

AREA DEMOGRAPHICS & MARKET OVERVIEW 30M TOURISTS VISIT THE GALLERIA/UPTOWN AREA PER YEAR

3.2M INTERNATIONAL TOURISTS VISIT THE AREA PER YEAR

LUXURY HOTEL OVERVIEW 40 HOTELS HOTEL NAME RANKING LOW RATE HIGH RATE WITH MORE THAN 8,020 ROOMS Hotel Granduca Houston $212 $625 COMPRISE THE AREA The St. Regis Houston $201 $679 Aloft Hotel $270 $290 DEMOGRAPHICS Hilton Houston Post Oak $100 $300

RADIUS 1 MILE 3 MILE 5 MILE Houston Marriot $110 $260 JW Marriot Houston $150 $300 POPULATION 23,652 180,705 491,923 $313M Omni Hotel $100 $150 IS GENERATED PER AVG. HOUSEHOLD INCOME $130,890 $122,612 $115,544 Royal Sonesta Hotel $110 $300 YEAR FROM HOTEL ROOMS IN THE AREA HOUSEHOLDS 14,121 85,678 244,118 Sheraton Suites $100 $230 Westin Galleria Hotel $150 $300 RENTER OCCUPIED UNITS 8,889 53,886 131,784 AVERAGE $150 $343

Cushman & Wakefield 5 Condo Overview MARKET OVERVIEW

Within a three-mile radius, there are seven luxury Class A high-rise condos, with average $667/square feet.

VILLA D' ESTE 4 NO. OF UNITS 100 YEAR BUILT 1999 AVG $ SQ/FT $684 MONTEBELLO 5 NO. OF UNITS 98 THE BELFIORE YEAR BUILT 2003 AVG $ SQ/FT $578 2 NO. OF UNITS 75 YEAR BUILT 2016 1 AVG $ SQ/FT $825 6 ASTORIA NO. OF UNITS 75 YEAR BUILT 2016 COSMOPOLITAN AVG $ SQ/FT $825 NO. OF UNITS 80 YEAR BUILT 2008 AVG $ SQ/FT $585

THE WILSHIRE 3 NO. OF UNITS 96 YEAR BUILT 2017 AVG $ SQ/FT $625 2727 KIRBY NO. OF UNITS 90 7 YEAR BUILT 2008 AVG $ SQ/FT $670

The Marque Class A High Rise Condos

Cushman & Wakefield 6 Condo Overview MARKET OVERVIEW

Three condos are under construction and expected to have nearly average $743/sqft.

THE SOPHIE 10 NO. OF UNITS 38 YEAR BUILT 2019 4 AVG $ SQ/FT $645

5 2 1 6

ARABELLA 8 NO. OF UNITS 99 YEAR BUILT 2018 AVG $ SQ/FT $801

3 3 RIVER OAKS NO. OF UNITS 79 9 YEAR BUILT 2018 7 AVG $ SQ/FT $784

The Marque Class A High Rise New Construction

Cushman & Wakefield 7 Office Overview MARKET OVERVIEW

Office Market Overview: Galleria / Uptown submarket contains more than 28 million SF of commercial office space and is the 14th largest business district in the . The area has 2,000+ businesses incluing 83,000 employees. Major employers are Enbridge (1,900 employees), BHP Billiton (1,700 employees), Landry's (1,200 employees), Bechtel Corporation, BBVA Compass (1,000 employees), Marathon Oil Corporation, and Schlumberger. Uptown accounts for 15% of Houston’s total “Class A” office space, second only to . Signature buildings include , Williams Tower, BHP Billiton, Post Oak Central, Four Oaks Place, 64-story Williams Tower.

AREA OFFICE BUILDINGS GREATER THAN 400K SF BUILDING NAME YEAR BUILT SF CLASS TYPE

Marathon Oil Tower 1983 1,197,300 Class A Williams Tower 1983 1,476,973 Class A Post Oak Central I,II,III 1978 1,279,326 Class A BHP Billiton Petroleum 2016 593,850 Class A Four Oaks Place 1983 588,531 Class A Wells Fargo Bank Tower 1983 491,000 Class A Schlumberger Solutions Center 1979 446,000 Class A

Average/Total 1986 6,072,980

Cushman & Wakefield 8 Major Employers MARKET OVERVIEW

FORTUNE 500 COMPANIES HEADQUARTERED IN Revenue Global Company Rank ( in billions) Employees

Phillips 66 34 72 14,800 Sysco 57 50 51,900 ConocoPhillips 115 24 12,200 Enterprise Products Partners 122 23 6,800 Plains GP Holdings 141 20 5,100 Halliburton 173 16 50,000 Waste Management 201 14 41,200 Kinder Morgan 215 13 11,121 Group 1 Automotive 261 11 13,500 Occidental Petroleum 278 10 11,000 "Baker Hughes (GE) 285 10 33,000 Huntsman 289 10 10,000 Anadarko Petroleum 344 8 4,500 Quanta Services 355 8 28,100 EOG Resources 356 8 2,650 CenterPoint Energy 362 8 7,727 National Oilwell Varco 375 7 40,000 Calpine 400 7 2,372 Targa Resources 402 7 2,000 Apache Corporation 488 5 3,727

Cushman & Wakefield 9 Area Development MARKET OVERVIEW

THE BOULEVARD RIVER OAKS DISTRICT PROJECT THE GALLERIA

4444 WESTHEIMER 4920 SAN FELIPE ST, 5085 WESTHEIMER RD HOUSTON, TEXAS 77027 HOUSTON, TX 77056 HOUSTON, TX 77056

Project cost: approximately $275 million Project cost: approximately $227 million Project cost: approximately $250 million

River Oaks District, situated inside the Houston is rebuilding Post Oak Boulevard The Galleria (2.4 million SF, 400 stores) is the Loop, is home to 650,000 square feet of into an exquisitely designed grand boulevard while largest mall in Texas and seventh-largest in the customizable space. preserving existing automobile access, substantially United States. improving transit service and creating a beautifully This space includes: 252,000 square feet of luxury landscaped pedestrian environment. Construction of It is currently anchored by Neiman Marcus, retail, fine-dining restaurants, street-side cafes and the Boulevard project is underway. It will be Nordstrom, Saks Fifth Avenue, and Macy's. entertainment; 92,000 square feet of state-of-the-art, constructed in three phases and is estimated to be creative office space; and 279 contemporary completed in December 2018. The plan will: residential units. (1) Preserve all 6 existing traffic lanes and protected left turns. (2) Relocate buses to dedicated express lanes (3) Maintain current traffic signal operations (4) Enhance the pedestrian experience (5) Add 800 live oak trees, while preserving existing trees

Cushman & Wakefield 10 Uptown BRT Project MARKET OVERVIEW

Transit Center

Bus Stations METRO portion

TxDOT portion Uptown Portion

The Uptown Development Authority (Uptown) is building a Bus Rapid Transit (BRT) project ($193 million) on Post Oak Boulevard to deliver transit service from Westpark to the Northwest Transit Center (NWTC). It is expected to be completed by 2019.

Uptown will also create a dedicated bus way in the median of Post Oak Boulevard from Westpark to the intersection of Post Oak and IH-610.

Uptown, in turn, will build a new transit center at Westpark Drive which will serve as the southern terminus of the line.

Cushman & Wakefield 11 Footnotes FINANCIAL ANALYSIS

Key Assumptions

Pro forma market rents in year one are based on current effective rents, and down units will be brought back online. 1 Gross Potential Pro forma assumes implementation of a value add program to part of the units over a three year period starting in year 2. Year two assumptions below:

2 Concessions Pro forma assumes -.3% in Year 1. 3 Loss to Lease Pro forma assumes 5.0% based on industry standards. 4 Vacancy Pro forma assumes 0.4% based on trailing 12 months amount. 5 Employee / Model Pro forma assumes 0.0% based on industry standards. 6 Bad Debt / Write-off Pro forma assumes current amount. 7 Utility Reimbursement Pro forma assumes current amount increased by 2.0%. 8 Misc. Other Income Pro forma assumes trailing 12 months amount increased by 2.0%. 9 Total Variable Expenses Pro forma assumes 80% of the sales price x tax rate (2.7213). 10 Taxes Pro forma assumes $493 per unit. 11 Insurance Pro forma assumes 3.0% of total income based on industry standards. 12 Management Fee Pro forma assumes $200 per unit based on industry standards. 13 Capital Reserves Analysis based on buyer obtaining new financing for the property. 15 Acquisition Financing Expenses should be lower based on current market standard

Cushman & Wakefield 17 Unit Mix & Rent Schedule FINANCIAL ANALYSIS

NO. OF GENERAL AVERAGE MARKET MARKET RENT TOTAL ANNUAL UNITS TYPE SF RENT SQ. FT. SQ. FT. MARKET RENT 6 1 BR / 1 BA 725 $1,275 $1.76 4,350 $91,800 2 1 BR / 1 BA 795 $1,350 $1.70 1,590 $32,400 1 1 BR / 1 BA 905 $1,450 $1.60 MA9R05K ET RENT $17,400 9 1 BR / 1 BA 650 $1,200 $1.85 5,850 $129,600 UNIT MIX 3 1 BR / 1 BA 720 $1,250 $1.74 2,160 $45,000 1 1 BR / 1 BA 690 $1,225 $1.78 690 $14,700 1 1 BR / 1 BA 680 $1,200 $1.76 680 $14,400 1 1 BR / 1 BA 820 $1,325 $1.62 820 $15,900 1 1 BR / 1 BA 750 $1,295 $1.73 750 $15,540 1 1 BR / 1 BA 825 $1,350 $1.64 825 $16,200 16 1 BR / 1 BA 886 $1,350 $1.52 14,176 $259,200 2 0 BR / 1 BA 450 $975 $2.17 900 $23,400 1 BR/ 1BA 44 $1,279.43 $1.67 $675,540 766 33,696 45% 1 2 BR / 2 BA 995 $1,650 $1.66 995 $19,800 2 2 BR / 2 BA 875 $1,650 $1.89 1,750 $39,600 3 2 BR / 2 BA 965 $1,650 $1.71 2,895 $59,400 2 BR/1 BA 1 2 BR / 2 BA 900 $1,550 $1.72 900 $18,600 55% 1 2 BR / 2 BA 895 $1,575 $1.76 895 $18,900 1 2 BR / 2 BA 950 $1,700 $1.79 950 $20,400 1 2 BR / 2 BA 1,075 $1,725 $1.60 1,075 $20,700 1 2 BR / 2 BA 1,050 $1,700 $1.62 1,050 $20,400 1 2 BR / 2 BA 970 $1,650 $1.70 970 $19,800 17 2 BR / 2 BA 1,040 $1,600 $1.54 17,680 $326,400 24 2 BR / 2 BA 1,160 $1,650 $1.42 27,840 $475,200 53 1,075 $1,633.96 $1.52 57,000 $1,039,200 1 3 BR / 2BA 1,600 $2,500 $1.56 1,600 $30,000 1 1,600 $2,500 $1.56 1,600 $30,000

98 942 $1.484 $1.58 92,296 $1,744,740 OCCUPANCY AS OF 2-2-17 BREAKDOWN

Occupied 85 Units 87% 1 BR / 1 BA 45%

Vacant 13 Units 13% 2 BR / 1 BA 54%

Total 98 Units 100% 3 BR / 2 BA 0%

99%

98 942 $1,484 $1.58 92,296 $1,744,740

Cushman & Wakefield 18 Offering Process

Purchasers wishing to make an offer on the Property are requested to submit: Letter of Intent Resume and/or business letter indicating assets owned and assets purchased in the past two years. Transaction References Banking References Sources of equity for acquisition

Upon receipt of an acceptable Letter of Intent, the successful offeror will be supplied with a Purchase and Sale Agreement.

PROPERTY TOURS: Call 713-331-1781 or send an email to [email protected] to schedule a property tour. Do not contact the property directly.

COMMUNICATION: All communications, inquiries, and requests should be addressed to: ED NWOKEDI LUCAS TSANG Executive Director Associate Broker 713.331.1731 713.331.1815 [email protected] [email protected]

Cushman & Wakefield of Texas, Inc. | 1330 Post Oak Boulevard, Suite 2700 | Houston, Texas 77056

Seller reserves the right to remove Properties from the market at any time. Seller expressly reserves the right, in its sole and absolute discretion, to accept a preemptive offer, to reject any and all proposals or expressions of interest in the property or to terminate discussions with any party at any time.

Cushman & Wakefield 19 ED NWOKEDI LUCAS TSANG Executive Director Associate Broker 713.331.1731 713.331.1815 [email protected] [email protected]