NORFOLK TOWER
2211 NORFOLK STREET • HOUSTON, TEXAS
EXECUTIVE SUMMARY
1 Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker (“HFF”). HFF is pleased to offer for sale Norfolk Tower, an institutionally owned office building featuring 207,562 square feet of boutique office space located in Greenway, one of Houston’s top infill suburban submarkets. Norfolk Tower is 82.6% leased with 3.3 years of weighted average remaining lease term and offers a 3.26 per 1,000 square foot parking ratio in a four- story parking garage. Since 2012, ownership invested more than $3 million in non-leasing capital, allowing investors to immediately capitalize on the remaining vacant space. Property Overview INVESTMENT HIGHLIGHTS
PROPERTY SUMMARY Address: 2211 Norfolk Street, Houston, TX, 77098 Rentable Area: 207,562 SF Year Built: 1982 Number of Floors: 11
Percent Leased: 82.6% Financial Analysis Site: 2.36 acres (102,802 SF) Parking: 3.26 : 1,000 SF
UPSIDE POTENTIAL Norfolk Tower is favored by tenants seeking urban infill office space with excellent mobility, surrounded by an abundance of amenities. The Property’s loyal tenancy consists primarily of the wealthy, well-educated workforce nearby and combines for a weighted-average tenure of 8 years at the Property. SIGNIFICANT CAPITAL INVESTMENT Currently 82.6% leased, investors have the rare opportunity to create The Owner invested over $3 million of non-leasing capital improvements into significant value in the near term with rental rates that are approximately the subject property since 2012, maintaining its institutional quality status. Excutive Summary 7% below market. Moreover, Norfolk Tower houses mostly small to midsize Notably, the Owner invested in new tenant common areas and corridors tenants, with little exposure to any one tenant, which enables a new investor to ($300,000), new HVAC chillers and DDC controls ($650,000), elevator quickly capitalize on the ability to convert these existing rates to market rates. modernization ($775,000), new deli remodeling ($100,000), and curtain wall and building upgrades ($815,000).
TOP SUBURBAN SUBMARKET NON-LEASING CAPITAL INVESTED IN LAST FOUR YEARS Due to its proximity to a well-educated work force, the Greenway submarket Tenant Common Areas $1,300,000 remains in favor with tenants and investors as occupancy averaged 90% over Corridors, Restrooms, Deli, Lobby, Elevators the past five years, outperforming other submarkets such as the CBD and the Building Upgrades $1,100,000 Roof, Sprinklers, Curtain Wall Galleria. Leasing momentum continues to be positive as the submarket absorbed HVAC $700,000
90,309 square feet over the twelve months ended March 2017, one of few Houston Chillers, DDC Controls, Fan Coils Market Overview office submarkets to post positive net absorption over that same time period. The TOTAL $3,100,000 submarket also boasts the second-highest gross average rental rate in Houston of $33.99 with a 5.1% compound annual growth rate over the past 5 years. EXCELLENT MOBILITY
Historical Occupancy & Rental Rates The ingress/egress of Norfolk Tower gives its tenants easy access to all points GREENWAY SUBMARKET - 10 Year History 100.0% $40.00 of Houston. Direct access to Interstate 69 one block to the south of the 98.0% $38.00 building enables quick access to the CBD and George Bush Intercontinental 96.0% $36.00 $ )
9.4% CAGR ( Airport to the north. To the south Interstate 69 connects with Loop 610 and
94.0% $34.00 e t % R a c y 92.0% $32.00 l Westpark Tollroad, providing direct access to the Galleria area, Westchase n a t a n p 90.0% $30.00 R e
and Energy Corridor submarkets in west Houston and Hobby Airport in N
O c u 88.0% $28.00 N N 86.0% $26.00 southeast Houston. On the east side of the building, Greenbriar Drive provides
84.0% $24.00 direct access to the prestigious campus of Rice University and surrounding 82.0% $22.00 neighborhoods West University and River Oaks, as well as the Texas Medical 80.0% $20.00 Center, the world’s largest medical center.
Occupancy (%) Avg. Occupancy (Past 5 Yrs) Rental Rates ($) UNMATCHED SURROUNDINGS HIGHLY DESIRABLE GREENWAY LOCATION Norfolk Tower is ideally situated in between River Oaks, one of the wealthiest Norfolk Tower is located in the Greenway Plaza office submarket, one of communities in Texas and one of the most affluent neighborhoods in the Houston’s most sought-after infill submarkets, and one of the few areas of U.S., and West University, where median home sales are well over $1 million. Houston that offers a true 24/7 “live-work-play” environment combined with Other high-income residential neighborhoods such as Afton Oaks, Memorial, unparalleled access and visibility along Interstate 69. This unique district Tanglewood and Bellaire are within 10 minutes of the Property. The Property blends the city’s most exclusive neighborhoods with a large, vital business is well-located to efficiently serve Houston’s upscale neighborhoods and district, acclaimed retail stores, luxury hotels and condominium towers. highly educated workers. Because of the concentration of services and amenities, the area is recognized as a primary destination center of the Houston area.
1 Property Overview LOCATION HIGHLIGHTS
A sample of the nation’s most recognized infill office submarkets and corridors is outlined below which demonstrates that the Greenway Submarket has nation leading demographics. The three mile area around Greenway has the highest median household income ($143,000) and educational attainment rate (70% holding a bachelor’s degree or better) compared to other top national office submarkets. Norfolk Tower will continue to be a highly sought after office location in Houston with demand underpinned by a prosperous, well educated, and proximate workforce Financial Analysis DEMOGRAPHICS BY ZIP CODES (3-MILE RADIUS)
3-Mile Radius City, State Submarket / Corridor Avg. Income College Degree
Houston, TX Greenway Plaza $142,642 70%
New York, NY Downtown Financial Center $131,563 61%
Houston, TX Galleria / Uptown $124,603 60% Excutive Summary San Francisco, CA North Financial District $123,675 57%
Atlanta, GA Buckhead $116,338 62%
Santa Monica, CA Santa Monica $113,227 65%
Beverly Hills, CA Beverly Hills $110,513 60%
Chicago, IL South Wacker $107,974 65%
Houston, TX Downtown $102,430 47%
Seattle, WA Downtown $98,637 58% Market Overview Boston, MA Back Bay / SeaPort $95,769 60%
Dallas, TX Uptown/Turtle Creek $90,999 55%
Shepherd Dr MEMORIAL Durham Dr VILLAGES 77024 Washington Ave
$185,967 | 69% Westcott St 77008 $140,058 | 65.71% Memorial Dr Memorial Park Pkwy Main St Memorial Dr Allan Texas Ave Congress Ave
Lamar St
W Dallas St Travis St
TANGLEWOOD Clay St La Branch St San Jacinto St 77019 W Gray St Louisiana St CBD $140,196 | 68.82% St Joseph Pkwy 77002
Taft St
S Shepherd Dr Webster St
RIVER OAKS Dunlavy St Waugh Dr $121,137 | 27% McKinney St
Dowling St
San Felipe St UPTOWN/ Leeland St GALLERIA AVALON PLACE McGowen St 77003 Westheimer Rd Main St $73,075 | 32%
Montrose Blvd 77027 77006 Elgin St 77056 $134,093 | 72.19% Kirby Dr W Alabama St $112,706 $133,492 | 72% 67.07% 77046 77098 Post Oak Blvd AFTON $91,606 | 64% $123,641 | 73.97% PLACE Richmond Ave Richmond Ave
Dowling St 77004 Edloe St NORFOLK TOWER 288 $81,797 | 48.07% La Branch St San Jacinto St Almeda Rd 77056 I Mile 2 BELLAIRE$224,921 | 76% WEST UNIVERSITY PLACE 77005 (7 MINUTES) $223,263 | 80.12% Property Overview EAST FACING AERIAL
CBD
10 IH-10
AIG CAMPUS Hanover Montrose SPUR 527 apartments
MUSE Financial Analysis The Susanne Apartments Luxury Apartments
The Fairmont the bellevue The Westheimer Apartments Apartments WEST ALABAMA STREET
21 Eleven Apartments
RICHMOND AVENUE
Shepherd Drive 69
Gables Greenbriar Drive
Upper Kirby Excutive Summary
Upper Kirby Luxury Apartments
NORFOLK STREET IH 69 | southwest freeway Morningside Street
district at greenbriar Apartments
WEST FACING AERIAL Market Overview
Westpark Tollway The Galleria
IH-10 610
Greenway Plaza River Oaks
River Oaks Baptist School
West University
Kirby Grove west ave
Kirby Collection
Windsor at Kirby drive west University
Gables RICHMOND AVENUE Upper Kirby Upper Kirby
IH 69 | southwest freeway Luxury Apartments
GreenBriar drive District at Greenbriar
69
3 Shepherd Drive Property Overview SITE PLAN Financial Analysis e e
Norfolk Drive Morningside Driv Parking Greenbriar Driv Garage 2211 Norfolk Excutive Summary
SOUTH FACING AERIAL Market Overview
texas medical center Hermann Park Museum Tower The Carter apartments Apartments rice university
Encore CC&G apartments The Muse Southampton Apartments neighborhood
The Fairmont West University Apartments neighborhood
IH 69 | southwest freeway district at greenbriar Apartments
69
Shepherd Drive
RICHMOND AVENUE
GreenBriar Drive
Upper Kirby Luxury Apartments Kirby Drive
4 Grand Pkwy 69 LIBERTY Lake COUNTY The Woodlands Houston MONTGOMERY State Park ExxonMobil COUNTY Corporate Headquarters
Eastex Frwy Property Overview LOCATION MAPS
HARRIS
COUNTY Proposed
George Bush Intercontinental Greenspoint Airport Grand Pkwy Sam Houston Pkwy Lake Houston 69 Financial Analysis
Hardy Toll Road
Northwest Frwy North Frwy Sheldon Reservoir
Beaumont Hwy North Loop Baytown East Frwy
Katy Frwy Energy Corridor NORFOLK TOWER Westchase Excutive Summary 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
W 11th St
Blalock Rd Blalock Campbell Rd 69
FORT BEND William Post Oak Rd Oak Post Silber Rd Silber Houston COUNTY Katy Freeway P. Hobby Galveston Pkwy Airport Heights Memorial Bay City Mall Sam Houston Tollway Whiteoak Blvd Heights Bayport Bayou Bend Terminal
Gulf Frwy Market Overview Voss Rd Voss Armand Bayou Park Memorial Dr Memorial Park
Fort
Gessner Rd Gessner Golf Course Washington Ave Shepherd Dr Shepherd
Bayou South Frwy Clear Westcott St Lake Memorial Dr
Houston Memorial Park Allen Pkwy Buffalo Country Sabine Club Memorial Dr Bayou Park Buffalo Woodway Dr Tanglewood River Oaks Country Montrose Smithers Club Kirby Dr Lake San Felipe St
River Oaks GALVESTON Montrose Blvd Montrose
Shepherd Dr Shepherd COUNTY BRAZORIA Proposed Grand Pkwy Westheimer Rd COUNTY Alabama St Westheimer Rd The Galleria NORFOLK TOWER Sage Rd Sage Richmond Ave
Galleria St Edloe
Richmond Ave St Weslayan
Gessner Rd Gessner Chimney Rock Rd Rock Chimney Fountain View Dr View Fountain Westpark Dr
Bissonnet St Voss Rd Voss Fannin St
Fondren Rd Fondren Westpark Tollway Hermann RICE Park UNIVERSITY Harwin Dr St Newcastle UNIV. OF TEXAS Gulfton St HEALTH SCIENCES
CENTER West Loop West
Sharpstown Houston Park Sharpstown Texas Zoo
Greenbriar St Greenbriar Medical Country Club Dr Kirby Mall Center Bellaire Blvd Bellaire Blvd
Main St
Fannin St
Blvd
HOUSTON Rd Link Stella Southwest Freeway Bayland BAPTIST Park UNIVERSITY Braeswood
Beechnut St Alameda Rd Meyerland Bayou Plaza S Main St Holly Hall St 5 Brays Houston Westwood Astrodome Country Club Bissonnet St Reliant
Buffalo Speedway Buffalo Reliant Park Stadium Stein Chimney Rock Rd Rock Chimney Park South Loop Braeburn Braeswood Blvd Six Flags Country Club Astroworld CONTACT INFORMATION
H. DAN MILLER, CCIM, SIOR Senior Managing Director T. 713.852.3576 [email protected]
MARTIN T. HOGAN Director T. 713.852.3557 [email protected]
WESLEY HIGHTOWER Real Estate Analyst T. 713.852.3495 [email protected]
JOHNNY KIGHT Real Estate Analyst T. 713.212.6575 [email protected]
FOR FINANCING INQUIRIES SUSAN HILL Senior Managing Director T. 713.852.3564 [email protected]
HFF HOUSTON 9 Greenway Plaza, Suite 700 Houston, Texas 77046 T. (713) 852-3500 F. (713) 527-8725 hfflp.com
Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.