DEERWOOD GLEN PASADENA, TEXAS EXECUTIVE SUMMARY HFF, on behalf of Clay Development (the “Sponsor”), is pleased to exclusively present an outstanding opportunity to acquire the fee simple interest in Deerwood Glen II (“Deerwood Glen”), a 74,695 square foot, newly constructed office building in Southeast Houston near the Port of Houston. The Property, which is 100% leased to an impressive roster of tenants, boasts impressive in- place NOI and a weighted average lease term of 7.8 years providing exceptional income stability over an investor’s hold period. Located in Southeast Houston, Deerwood Glen offers a convenient location for tenants with operations along the Houston Ship Channel servicing the $50 billion gulf coast petrochemical boom.
PROPERTY SUMMARY Address: 4440 SH 225 Deer Park, TX 77536 Location: Located adjacent to the southeast corner of the Sam Houston Tollway (Beltway 8) and State Highway 225 with frontage on the eastbound frontage road of SH 225. Net Rentable Area: 74,695 Square Feet
Land Area: 7.4409 acres (324,126 SF)
% Leased: 100%
Developer: Clay Development & Construction, Inc.
Year Built: 2015
# Floors: 2
Typical Floor Size: 37,348 INVESTMENT HIGHLIGHTS DEERWOOD GLEN
EXCELLENT TERM & CREDIT SHALE GAS & THE EXPANDING PETROCHEMICAL MARKET • Deerwood Glen is 100% leased to a stable roster of high-quality tenants boasting an average Houston is home to the largest petrochemical complex in the nation and the second-largest in the remaining lease term of 7.8 years providing stability of income for investors. world. The Houston petrochemical complex represents 25% of U.S. refining capacity and 40% of
• The Property’s tenant roster consists of leading industrial, engineering and construction firms, U.S. petrochemical capacity, and is located along the 25-mile Houston Ship Channel at the Port of Houston. the majority of which are engaged in the expansion of petrochemical and refining complexes, LNG export terminals, and natural gas processing plants. There are over 25 petrochemical projects comprising more than $30 billion in investment that
COVETED IN-PLACE INCOME WITH CONTRACTUAL GROWTH are currently under construction in the Greater Houston area. In the Texas Gulf Coast region, more than 120 petrochemical plants worth more than $50 billion are under construction and • Deerwood Glen benefits from long-term, contractual escalating leases providing coveted in- are scheduled to open within the coming years, as companies invest in new ethylene crackers, place yield with attractive NOI growth which averages 2.5% annually over the projected hold propylene production units, refineries and other expansion projects. The primary driver of this period. activity is that petrochemical enterprises benefit directly from lower oil and natural gas prices, BRAND NEW CONSTRUCTION IN A PRIME LOCATION as this reduces their cost to purchase their primary feed stocks for producing/refining plastics, • Deerwood Glen is the second phase of a successful three-building Class A office development resins, and other petrochemical products, and transporting oil and natural gas across geographies. within Clay Development’s 150 acre, deed-restricted Deerwood Glen Business Park. This flurry of petrochemical construction – as firms continue to take advantage of a low cost feed • The Property’s efficient design, which features large floor plates with no interior columns, stock environment – is expected to create tens of thousands of construction jobs in the short-term resonates with tenants and has been a primary driver of the recent leasing momentum (Phase and the need for thousands of blue collar jobs in the longer-term. II leased up in less than 9 months).
UNMATCHED REGIONAL ACCESSIBILITY & VISIBILITY • The Property is ideally situated in close proximity to the Port of Houston and the Houston Ship Channel with excellent access to Beltway 8 and Hwy 225 for unmatched regional accessibility.
• Deerwood Glen tenants benefit from exceptional visibility due to the property’s location at the front of Deerwood Glen Business Park, which enjoys expansive frontage along Hwy 225.
1 HFF INVESTMENT HIGHLIGHTS
PORT OF HOUSTON – A MAJOR GATEWAY DEMAND DRIVER The Port of Houston is ranked the largest port in the U.S. by foreign tonnage (20th consecutive Additionally, over $4.5 billion in state and local tax revenues are generated by the businesses year) and import tonnage (24th consecutive year), as well as the nation’s leading break-bulk port that operate at the Port (GHP). Houston is connected to international markets around the (GHP). It is the second-busiest port in the Western Hemisphere after the nearby Port of Louisiana globe by carrier services that operate on all major trade lanes, and the port also intersects the in terms of total cargo volume, and #14 in the world. As a container port, the Port of Houston is Gulf Intracoastal Waterway, a key U.S. barge artery, which spans most of the Gulf of Mexico. the nation’s sixth busiest and handles 67% of all container traffic along the Gulf. The port helps Approximately $325 million has been recently invested by the Port of Houston to widen and Texas retain its ranking as the top exporter state in the U.S. (13th consecutive year). There are dredge the port’s canals and modernize the port’s facilities, infrastructure, security and overall currently 10 major rail companies, covering a rail network of over 800 miles and 150 trucking environment to a “Post-Panamax” standard, in line with the recently completed ~$5.25 billion lines, which connect the Port of Houston to the largest markets in the continental U.S., Canada Panama Canal expansion project in Central America, which is slated to open in 2016. The $325 and Mexico. There are three Class I railroads operating in Houston: Burlington Northern Santa million investment by the port to prepare for the Panama Canal expansion is part of a broader Fe Railway (BNSF), Kansas City Southern Railway (KCS) and Union Pacific Railroad (UP). (GHP) $35 billion capital improvement and maintenance campaign that began in 2012 and is scheduled Ship channel-related businesses contribute over 1.1 million jobs throughout Texas, and generate a to complete this year. statewide economic impact of nearly $265 billion, according to a 2012 study by Martin Associates.
2 INVESTMENT HIGHLIGHTS DEERWOOD GLEN
PROPOSED AND UNDER CONSTRUCTION PETROCHEMICAL PROJECTS
Investment Amount Company ($ Billions) UNDER CONSTRUCTION 1 Air Liquide 0.23 2 C3 Petrochemical 1.2 17 20 3 Celanese (JV with Mitsui) 0.8 8 7 4 Cheniere 6 10 5 ChevronPhillips 6 14 5 9 6 ChevronPhillips 1 7 Dow 4 6 4 8 Enterprise Products Partners 1.3 16 8 13 9 Enterprise Products Partners 2 3 1 10 ExxonMobil 6 11 Formosa 2 12 Freeport LNG 14 13 Ineos / Sasol JV 0.5 5 4 14 LyondellBasell 1.3 15 Magellan 0.4 16 Noltex 0.18 17 OCI Partners LP, subsidiary of Natgasoline LLC 0.25 2 18 Oxy Chem/Mexichem 1 11 19 Phillips 66 3 20 Sasol 8 PROPOSED 6 2 1 1 BASF 1 12 2 BASF and Yara 0.6 7 3 Cheniere 9.5 19 4 Fund Connell USA Energy and Chemical Investment Corp. 4.5 5 NRG Energy and JX Nippon - JV 1 6 Qatar Petroleum, ExxonMobil, ConocoPhillips 10 7 Total and BASF 2 8 Sempra LNG 10 Total Projects $97.76 Billion
18 3 17 Under Construction
Proposed
3 HFF INVESTMENT HIGHLIGHTS
PROPERTY PHOTOGRAPHY INVESTMENT HIGHLIGHTS DEERWOOD GLEN
TEXAS MEDICAL CENTER THE GALLERIA CBD
AIR PRODUCTS AND CHEMICALS KINDER MORGAN
FRONTIER SUNBELT SUPPLY SILVER EAGLE DISTRIBUTORS ELLIOTT ELECTRIC
SAM HOUSTON PARKWAY
FLOWSERVE
PASADENA FREEWAY | SH 225
HAGEMEYER USA
MUSTANG WOOD GROUP SHELL BURROW GLOBAL
DOW CHEMICAL HFF PROPERTY OVERVIEW
LOCATION MAPS
Grand Pkwy 69 LIBERTY Lake COUNTY The Woodlands Houston MONTGOMERY State Park ExxonMobil COUNTY Corporate Headquarters
Eastex Frwy
HARRIS
COUNTY Proposed
George Bush Intercontinental Greenspoint Airport Grand Pkwy Sam Houston Pkwy Lake Houston 69
Hardy Toll Road
Northwest Frwy North Frwy Sheldon Reservoir
Beaumont Hwy North Loop Baytown East Frwy
Katy Frwy Energy Corridor Deerwood Glen Westchase Downtown George Bush Park Westheimer Rd San The Galleria East Loop Jacinto Bay Westpark Tollway Texas Pasadena Frwy Medical
West Loop West Center Loop Southwest Frwy South Barbour’s Cut Terminal
69 FORT BEND William COUNTY P. Hobby Galveston Pkwy Airport Bay Sam Houston Tollway Bayport Bend Terminal Gulf Frwy Armand Bayou Park
Fort
South Frwy Clear Lake
6 Smithers Lake GALVESTON COUNTY BRAZORIA Proposed Grand Pkwy COUNTY WEST FACING AERIAL DEERWOOD GLEN
OILTANKING / STOLTHAVEN
HOUSTON SHIP CHANNEL
SHELL DEER PARK REFINERY
PASADENA FREEWAY | SH 225 DEERWOOD GLEN DRIVE
DOW CHEMICAL
MUSTANG WOOD GROUP SHELL BURROW GLOBAL DEERWOOD GLEN BUSINESS PARK HFF
ENERGY COMMERCE CENTER
BATTLEGROUND GOLF COURSE AT DEER PARK
W. 13TH STREET JOHN CRANE
SIEMENS
LIFTING GEAR HIRE ABRASIVE
NOLAN P. ALLTECH
PFT SAYBOLD CODE RED HOU. PILOTS
E GLEN DRIV OOD RW EE FUTURE BTS - IN NEGOTIATION D MUSTANG WOOD GROUP SHELL BURROW GLOBAL DOW CHEMICAL
PASADENA FREEWAY | SH 225 DEERWOOD GLEN BUSINESS PARK DEERWOOD GLEN
S t a t e H i g h w a y 2 2 5
± 15.6 ACRES
Dow Chemical Ofce #3 KEY 78,000 SF Deerwood Ofce #1 AVAILABLE LEASE SPACE 88,000 SF
AVAILABLE LAND/ Prop. Deerwood PROPOSED BUILDING Ofce #4 78,000 SF
LEASED/SOLD BUILDING Deerwood Ofce #2 74,695 SF AVAILABLE LAND
Hou. SUBJECT PROPERTY PFT Code Red 15K SF 20K SF Pilots 13.5K 38K S F 4K Saybold
Elastic u Baymont Alltech 15K SF 20K SF Nolan P. 7K 15K SF Abrasive 15K SF
boggy bayo Lifting Gear Hire 50K SF
40K SF
± 6.1 ACRES detention pond
Siemens 160,000 SF
± 23.8 ACRES
John Available Crane 15,000 33,750 SF SF
West 13th Street
Mitigation Mitigation INVESTMENT SALES
TRENT AGNEW Director Tel (713) 852-3431 [email protected]
JOHN ROGERS Real Estate Analyst Tel (713) 852-3436 [email protected]
FOR DEBT INQUIRIES
MICHAEL JOHNSON Associate Director Tel (713) 852-3474 [email protected]
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. 3/16
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