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1919 North Loop West

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1919 North Loop West 1919Houston, Texas North Loop West JLL | | 1919 North Loop West – Houston, TX JLL | | 1919 North Loop West – Houston, TX 1919 North Loop West | Houston, TX The Offering JLL Capital Markets, as exclusive advisor to the owner of 1919 North Loop West (“The Property”), is pleased to present the opportunity to acquire the fee simple interest in the 129,250 square foot Class B office building prominently located in Houston’s North Loop submarket, just north of the Galleria. The Property benefits from being highly visible and accessible to two of Houston’s most highly trafficked freeways, US Highway 290 and Interstate 610. The Property is institutionally owned and maintained, with recent capital improvements totaling in excess of $1.7 million with few ongoing capital needs. The Property is one of the top three office assets in the submarket and at 82.8% leased today, the Offering provides investors near-term value add opportunity at a significant discount to replacement cost. Healthcare Driven Demand The North Loop submarket has historically been a hybrid of office and medical, with office tenants occupying the majority of space. However that trend has shifted with the emergence of higher-cost housing and the transformation of surrounding neighborhoods. Current total square footage of buildings with over 25% medical is over 525,000 square feet, including the Property. Within this aforementioned medical office space, occupancy is 92%. All buildings are quoting $22 to 24 gross, with the exception of the best-in-class 1900 North Loop West, which is quoting $35 gross. 1900 North Loop West has been totally renovated with a new façade, new lobby, and new building systems. Therefore, 1919 North Loop West offers the opportunity to lease space to “medical light” tenants, that service the dense residential neighborhoods in all directions. In addition, the market has proven that cosmetic upgrades warrant rents that are 50% greater than the submarket average. INVESTMENT HIGHLIGHTS PROPERTY SUMMARY • Affluent residential population and high growth corridor undergoing Address 1919 North Loop West, Houston, Texas significant infrastructure improvements to position the location for Product Type Office increased leasing velocity Square Footage 129,250 rsf • Low-cost alternative to the nearby and affluent Galleria submarket Site Size 3.602 acres • Alternative parking ratio of almost 3.38/1,000 Year Built 1980; renovated in 2007 • Diverse tenant base comprised of legal and professional services, Occupancy 82.8% healthcare services, and state agencies Texas Protective Service, State Comptroller, American Family Law Center, Railroad Major Tenants Commission of Texas, Comptroller of Public Accounts Parking/Ratio 474 spaces; 3.38 per 1,000 sf JLL | Access & Visibility Capital Expenditures 2007 to 2018 1919 North Loop West is an easily accessible, highly visible asset. Positioned in an increasingly desirable location that is the benefactor of major infrastructure 2018 2008 improvements, the Property is poised to capitalize on the confluence of multiple Paint 115,300 Canopy 49,300 factors that offer a rare value enhancement opportunity. Parking Lot Retriping 2,600 Ceilings 12,300 2017 Electric & Phones 4,800 Paint 7,100 Elevators 26,600 Irreplaceable Location Fire Sprinklers 29,300 The Property is located just a few miles from, and has direct freeway access to the CBD, 2016 Floor 165,200 Parking Lot Repairs 122,700 Galleria, Greenway Plaza, and Memorial City. Additionally, 1919 North Loop West is just Landscaping 15,800 Common Corridor 31,900 Paint 11,800 north of some of the most affluent neighborhoods in the Houston MSA including River Paint 209,200 Roof 20,500 Oaks, Tanglewood and the Memorial Villages. The surrounding neighborhoods to the 2015 Security 68,200 north, east and southeast including Oak Forest/Garden Oaks, Lazybrook/Timbergrove, Electric 41,600 Structure 5,700 149,600 and the Heights are experiencing exceptional growth in both household income and 2014 housing values. Residents within a three mile radius have an average household Plumbing 18,300 2007 income of $113,000. Parking Lot Repairs 38,200 2013 Canopy 161,100 Ceilings 38,100 Ceilings 34,800 Value-Add Opportunity 2012 Electric & Phones 9,300 With a current occupancy of 82.8%, a weighted average lease term of 3.6 years, 1919 Paint 7,400 Elevators 102,300 Fire Sprinklers 16,700 North Loop West offers an attractive combination of secure in-place cash flow, along 2011 Flooring 77,900 Parking Lot Repairs 216,300 with significant NOI growth potential via contractual rent increases, increased parking Landscaping 49,600 Fence 5,900 revenue, transitioning the rent roll to market rates upon expiration, and through the Lighting 60,500 Flooring 53,700 Paint 198,100 absorption of the existing vacancy. HVAC 10,800 Plumbing 76,200 Paint 10,500 Roof 136,100 Discount to Replacement Cost 2010 Security 6,200 1919 North Loop West presents the opportunity to acquire 129,250 square feet of office Parking Lot Repairs 11,200 Structure 67,200 space in a premier infill location at a significant discount to replacement cost. HVAC 11,500 Paint 49,500 TOTAL $1,711,200 Plumbing 33,900 Low-Cost Alternative Structures/Walls/Doors 13,900 The Property offers attractive accessibility to Houston’s most prestigious addresses 2009 in the CBD and the Galleria, with a shorter daily commute for employees who reside Canopy 5,100 in Houston’s fastest growing residential markets in north and northwest Houston, as Electric & Phones 14,600 Elevators 300 well as the affluent nearby communities. In addition, these locational advantages are Fire Sprinklers 25,600 offered with significant occupancy cost savings. When compared to similar office space Landscaping 30,100 in the Galleria submarket, 1919 North Loop West offers an occupancy cost discount of Paint 11,300 approximately 50%. Plumbing 190,800 Signage 8,800 | 1919 North Loop West – Houston, TX 1919 North Loop West | Houston, TX River Oaks District The Galleria MEMORIAL HERMANN HOSPITAL JLL | Investment highlights Improving Houston Economy Houston has experienced robust population, employment, and overall economic growth. The city added approximately 62,500 jobs in the 12 months ending March 2018 and 94,417 new residents from July 2016 to July 2017 (2nd in the nation). Additionally, since December 2016, the Houston Business Cycle Index grew an annualized 3.3%, suggesting an exit from the oil setbacks and growth in the future. Additional metrics supporting the growth in Houston include: • #1 population growth among U.S metros since 2010 • #1 GDP per capita in the world • #1 job growth among U.S. metros since 2006 • #3 among U.S. cities with 46 Fortune 1000 headquarters • 16,409 multi-family units absorbed in the last 12 months • $235,000 median home value as of May 2017, brought on by record setting single-family residential sales. Infrastructure Improvements As one of Houston’s most highly trafficked arteries, construction on US Highway 290 between Interstate 610 and the Harris County line commenced in the summer of 2011. The project, which includes a complete overhaul to the US Highway 290/Interstate 610/Interstate 10 interchanges and 38 miles of US 290, provides a much needed improvement to the flow of traffic in the Property’s immediate area. Construction closest to 1919 North Loop West which includes U-turns, direct connectors/flyovers allowing the free flow from US 290 to I-610, US 290 to I-10 and I-10 to I-610, is complete. The remaining work, located to the northwest on US 290, is scheduled for completion in 2018. In addition, the proposed Texas High-Speed Rail project is planned to connect the Dallas/Fort Worth metroplex and Houston via 240 miles of bullet-train rail. The project would allow travelers to make the North Texas-Houston trip in less than 90 minutes and Texas Central, the project’s developer, is currently in the planning and fundraising stages. The Houston terminal is slated to be constructed one mile southwest of 1919 North Loop West, at the northwest corner of Interstate 610 and | 1919 North Loop West – Houston, TX Interstate 10. 1919 North Loop West | Houston, TX Investment highlights Enhanced Accessibility: Highway 290/Interstate 610 Interchange 2010 2017 Since summer 2011, construction on US Highway 290 between Interstate 610 and the Once complete, the full program will include the following: Harris County line has been ongoing in some capacity. The project, which includes a complete overhaul to the US Highway 290/Interstate 610/Interstate 10 interchanges and • Five US 290 main lanes in both directions from I-610 to SH 6/FM 1960 38 miles of US 290, is a much needed infrastructure improvement for the city but ongoing • Four US 290 mainlines in both directions from SH 6/FM 1960 to SH 99 construction has negatively impacted building owners and businesses located near the • Three US 290 main lines in both directions from SH 99 to FM 2920 near the Harris/ work. Since the project’s inception, the scope of work has changed several times and work Waller County line has been delayed due to weather and other complications. With many sections of the plan • US 290 will also have one reversible high occupancy vehicle lane between I-610 and now nearing full completion, the project is scheduled to be officially complete in 2018. SH 99, with inside/outside shoulders Tenants and visitors of 1919 North Loop West will be the beneficiaries of this multi-stage • Direct connectors/flyovers allowing free flow of traffic from US 290 to I-610, US 290 program that will improve traffic flow and safety in each direction through the interchange to I-10 and I-10 to I-610, in all directions (95% complete) area on I-610, I-10 and US 290, as well as decrease congestion through the US 290 corridor.
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