Westheimer Marketplace 12523 WESTHEIMER ROAD, HOUSTON, TEXAS Property Dashboard

PROPERTY SUMMARY

Address: 12523 Westheimer Road Houston, TX 77077 Location: SEC of Westheimer Road & S Dairy Ashford Road Year Built 1993/2016 Net Rentable Area 141,498 Square Feet Land Area ±14.08 Acres In-Place Occupancy 97.9% Traffic Count Westheimer Road: 68,000 VPD S Dairy Ashford Road: 35,562 VPD TENANT SUMMARY

Total: 103,562 VPD S&P Square % of Remaining Tenant Rating Feet Property Commencement Tenure Term Ground Lease BB&T A PAD N/A Aug-09 7.8 Years 2.3 Years Shopping Center FINANCIAL SUMMARY Starbucks A 1,850 1.3% Jul-16 0.8 Years 9.3 Years Green Ceviche 1,673 1.2% Jan-17 0.3 Years 4.8 Years Year 1 NOI $1,610,101 Lucky Sushi Bar 1,696 1.2% Dec-16 0.3 Years 4.7 Years Wtd. Average In Place Rent* $10.93 Chuck E Cheese B 22,666 16.0% Oct-12 4.5 Years 5.5 Years Goodwill 24,888 17.6% May-10 6.9 Years 3.1 Years Percent Below Market 18.8% Randall’s Food & Drugs L.P. (Albertsons) B+ 68,150 48.2% Dec-93 23.4 Years 6.7 Years Wtd. Average Tenure 14.1 Years Sublessee: SW Properties, LLC Sub-Sublessee: 24 Hour Fitness Wtd. Average Remaining Lease Term 5.6 Years Signarama 1,600 1.1% Jan-16 1.3 Years 3.7 Years Rollover Summary South Texas Dental 3,025 2.1% Sep-13 3.6 Years 6.3 Years Within 3 Years of Operation 5.8% BreWingz 4,150 2.9% Aug-08 8.8 Years 1.3 Years J&P Massage 2,000 1.4% Apr-11 6.0 Years 0.6 Years Within 5 Years of Operation 26.9% Natural Nails & Care 2,000 1.4% Mar-11 6.1 Years 1.8 Years *Wtd Average In-Place Rent Excludes BB&T Ground Lease Speed Queen B 4,800 3.4% Feb-17 0.2 Years 9.8 Years Total Leased 138,498 97.9% 14.1 Years 5.6 Years Total Property Size 141,498

NOI GRAPH TENANT BREAKDOWN LEASE EXPIRATION

$1,900,000 80,000 100%

$1,850,000 70,000 3% 80% $1,800,000 4,000 SF 60,000

$1,750,000 Local 50,000 60% 1.7% 10 Year CAGR 27% $1,700,000 40,000

38,010 SF % SF Expirin g Regional 40% $1,650,000 30,000 70% Square Feet (SF) 96,488 SF 20,000 $1,600,000 National 20% 10,000 $1,550,000 - 0% $1,500,000 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23Apr-24Apr-25Apr-26Apr-27 Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10 Square Feet Expiring Cumulative SF Expiring

2 WESTHEIMER MARKETPLACE INVESTMENT HIGHLIGHTS

• Albertsons Credit (Moody’s “B1” Rating) on Top of Two Subsequent Subleases for Anchor • Near Term Value Creation Opportunities | Weighted Average In-Place Rents 19% Below Space | Highly Secure Income with Rare Triple-Layered Credit Market | 3,000 Square Foot Space Available for Lease

• Outstanding Tenant Sales | Top Performing Locations for 24 Hour Fitness (#1 in Texas), • 70% National, 27% Regional, and 3% Local Operators (By Square Feet) | Synergistic Goodwill (Top Half), and Chuck E Cheese (#3 in Houston) Tenant Mix with Major Tenants including 24-Hour Fitness, Goodwill, Chuck E Cheese, and Laundryworks • Average Incomes in Excess of $85,800 within a 3-Mile Radius and Population over 445,000 within a 5-Mile Radius | Positioned in the Heart Houston’s Westward Expansion • Long Term Upside Opportunity in Re-leasing 68,150 SF Anchor Space | Albertson’s Base with Population Growth of 27% Since 2000 Within Three Miles Rent represents 33% of In-Place Rent at a Rate Substantially Below Market

• Opportunity to Lower Basis by One-Off Sale of BB&T Bank NNN Ground Lease (“A” S&P • Halfway Point of Westheimer Retail Corridor Serving West Houston Rooftops | Big Rating) | Hard Corner Location with Bank Deposits over $110,600 (Nearly Double the Box Retailers Under 2.5 Miles along Westheimer include Sam’s Club, HEB, Fiesta, Target, National Average) Sprouts, Trader Joe’s, Dillards, Sears

3 DEMOGRAPHICS WITHIN A THREE MILE R ADIUS: 185,442+ $85,830+ 5 YEAR AVERAGE HOUSEHOLD POPULATION GROWTH POPULATION INCOME 7.6%

FITNESS

WESTHEIMER ROAD (68,000 VPD)

(NAP) GROUND LEASE

S. DAIRY ASHFORD (35,562 VPD) DEMOGRAPHICS WITHIN A THREE MILE R ADIUS:

185,442+ $85,830+ 5 YEAR Submarket Overview AVERAGE HOUSEHOLD POPULATION GROWTH Square Feet WEST HOUSTON RETAIL TRADE AREA % Vacancy 190,000 15.0% POPULATION INCOME 7.6% TRADE AREA OVERVIEW Sam's Club Projection 13.0% Westheimer Marketplace is located in the heart of the West Houston area, serving the 140,000 dense neighborhoods of the Energy Corridor, Alief, and Westchase. This trade area bound 11.0% FITNESS by Memorial to the north, George Bush Park to the west, the Westpark Tollway to the 9.0% south, and Sam Houston Tollway to the east consists of 218 retail buildings totaling 9.56 90,000

million square feet that are 93% occupied with only 20,000 square feet of deliveries and 7.0% 128,245 square feet of net absorption over the last 12 months. 40,000 5.0%

3.0% (10,000) 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1.0%

(60,000) -1.0%

Deliveries SF Net Absorption Vac Rate

MICRO-MARKET OVERVIEW Radius Within the submarket, Westheimer Marketplace is idealy situated in the center of the DEMOGRAPHICS 1 Mile Radius 3 Mile Radius 5 Mile Radius established Westheimer retail corridor, home to virtually every national big box retailer 2016 Population 24,582 185,442 445,394 with operations in Houston and a large variety of institutional ownership. This corridor 2021 Projected Population 26,504 199,476 477,288 stretching from Highway 6 to the Sam Houston Tollway consists of 5.0 million square Growth Since 2010 10.3% 10.0% 9.1% feet of inventory in 112 properties which are 90.6% leased with 89,375 square feet of net Projected Growth (Next 5 Years) 7.8% 7.6% 7.2% absorption seen over the last 12 months. Average Household Income $81,864 $85,830 $80,599 Median Housing Value $55,993 $56,688 $49,898 Estimated Median Age (Years Old) 35.3 34.9 34.3 WESTHEIMER ROAD (68,000 VPD)

2.5 MILES 2.5 MILES WESTHEIMER ROAD

(NAP) GROUND LEASE WESTHEIMER MARKETPLACE

S. DAIRY ASHFORD (35,562 VPD)

5 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

Northwest Frwy North Frwy

Beaumont Hwy North Loop Baytown East Frwy

Katy Frwy WESTHEIMEREnergy MARKETPLACE Corridor The Galleria CBD George Bush Westchase Park Uptown District

Westheimer Rd East Loop Westpark Tollway Texas Pasadena Frwy Medical Port of Houston

West Loop West Center South Loop Southwest Frwy Barbour’s Cut Terminal

FORT BEND 69 William COUNTY P. Hobby Pkwy Airport

Sam Houston Tollway Bayport Terminal Bend Gulf Frwy Armand Bayou Park

Fort

South Frwy

GALVESTON COUNTY BRAZORIA Proposed Grand Pkwy COUNTY

6 WESTHEIMER MARKETPLACE Site Plan Property Description

W ESTHEIMER ROAD (68,000 VPD) Project SF: 141,498 Square Feet (Excluding BB&T Ground Lease)

Address: 12579 Westheimer Road Houston, TX 77082

GROUND LEASE Year Built: 1993 - 2016 SMOOTHIE KING

I TACO Site Area: ±14.08 acres BELL SUSH

CEVICHE Parking: The property provides concrete surface parking for 741 cars or a ratio of JEWELRY STORE 5.11 spaces per 1,000 square feet ) BURGER KING Construction: Basic Construction - Steel and masonry

Framing – Structural steel with masonry and concrete encasement

Exterior Walls – Brick

Typical Interior Finish: The improvements have typical retail finishes that vary based on each tenant concept. All spaces are 2nd generation space with interior finish. ASHFORD ROAD (35,562 VPD

Y Air Conditioning: HVAC

DAIR Roof: Built-up assemblies with tar and gravel cover

A Ceiling System: 2 x 4 acoustical tile or exposed ceilings BAR & AL GRILL DENT

SIGNARAM Concrete paving, concrete sidewalks, concrete curbing, pole mounted ail.-3,000 SF Landscaping:

MASSAGE Av lights and low maintenance sprinkle red landscaping NAILS

SPEED Foundation: Reinforced concrete slabs QUEEN Tenant: Randall’s Food & Drugs L.P. (Albertsons) Sublessee: SW Properties, LLC Sub-Sublessee: 24 Hour Fitness Lighting: Fluorescent

(NAP) Fire Protection & Electrical: Each tenant is separately metered

Zoning: The subject is located in the City of Houston and Harris County. There are no zoning ordinances for the City of Houston or Harris County. Land use is primarily controlled by means of private deed restrictions

WESTHEIMER MARKET PLACE Reciprocal Easement Agreement: None

7 ADDITIONAL INFORMATION

DEBT FINANCING

COLBY MUECK Managing Director | [email protected] | 713-852-3575

This Offering Memorandum has been prepared by HFF for use by a limited number of recipients. All information contained herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained herein. Further, the Offering Memorandum does not constitute a representation that no change in the business or affairs of the property or the Owner has occurred since the date of the preparation of the Offering Memorandum. All analysis and verification of the information contained in the Offering Memorandum is solely the responsibility of the recipient. HFF and Owner and their respective officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon or relate to the use of the information contained in this Offering Memorandum.

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 recipient 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.

The recipient (“Recipient”) agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum, which is a matter of public record, or is provided from sources available to the public (b) the Recipient, the Recipient’s employees, agents and consultants (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the need to know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of HFF and the Owner, and (c) the Recipient and the need to know parties will not use or permit to be used this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner or HFF or for any purpose other than use in considering whether to purchase the property. The Recipient and the need to know parties agree to keep this Offering Memorandum and all confidential information contained herein permanently confidential and further agree to use this Offering Memorandum for the purpose set forth above. If the Recipient has no interest in the property, or if in the future the Recipient or owner discontinue such negotiations, the Recipient will return this Offering Memorandum to HFF.