±10 ACRES ENERGY CORRIDOR HOUSTON, TEXAS | EXECUTIVE SUMMARY Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp., a Texas licensed real estate broker (“HFF”).
CBD GALLERIA
MEMORIAL VILLAGES MEMORIAL CITY MALL
CITYCENTRE
TECHNIP
SHELL DAIRY ASHFORD ROAD
CONOCOPHILLIPS WORLEY PARSONS ADDICKS DAM ROAD ADDICKS DAM ROAD CONOCOPHILLIPS FOSTER WHEELER IH - 10 | KATY FREEWAY
N ELDRIDGE PARK WAY OMNI HOTEL
ADDICKS ±10 ACRES RESERVOIR ENERGY CORRIDOR
P A R K TERRY HERSHEY PARK BLACKHAW ST R O W D R TERRY HERSHEY EXTENSION INVESTMENT SUMMARY
HFF is pleased to offer qualif ied investors an exceptional opportunity to develop ±10 acres located Address: 1101 - 1124 Blackhaw St and 1101 - 1125 Redhaw St just off I-10 on Park Row, between Redhaw Street and Terry Hershey Park (“the Property”) in Size: ±10 acres Houston, Texas. The Property is an exceptional site due to its location in the Energy Corridor, no floodplain, view corridors, and direct access to all of the amenities of Terry Hershey Park and the Current Use: Vacant Land Addicks Reservoir. This offering represents a tremendous opportunity to acquire a highly visible Multi-family, hotel, office, medical, or senior living Proposed Use: site that is ideal for multi-family, off ice, hotel, medical, or senior living development. development
The Opportunity
The site is approximately ±10 acres and is located off of Interstate 10 on Park Row in the Energy Corridor. The Energy Corridor is West Houston’s Central Business District and one of Houston’s largest employment center with 105,090 employees. Its growth trajectory suggests nearly 10 times more jobs than housing units will be added to this area over the next 13 years. Residents are zoned to Katy ISD, the #1 school district in the Houston MSA. The future development on the site will offer fantastic view corridors and access to I-10, which has traffic counts of more than 305,000 vehicles per day.
The Woodlands Grand Pkwy 69 Lake Houston ±195’ ±370’ State Park
ExxonMobil Corporate Headquarters
Eastex Frwy
Proposed
Greenspoint Grand Pkwy Sam Houston Pkwy Lake Houston 69
Northwest Frwy North Frwy Sheldon Reservoir ±3.5 ±6.8 REDHAWREDHAW STREETSTREET
±10 ACRES BLACKHAWBLACKHAW STREETSTREET ENERGY CORRIDOR ACRES ACRES Westbelt Beaumont Hwy North Loop Baytown East Frwy
Energy Corridor The Galleria CBD George Bush Westchase ±800’±800’ ±800’±800’ ±800’±800’ Park Westheimer Rd Uptown District Greenway San East Loop Port of Houston Jacinto Bay Westpark Tollway Texas Pasadena Frwy Medical Port of Houston
West Loop West Center South Loop Southwest Frwy Barbour’s Cut Terminal
69 Galveston
Pkwy Bay Sam Houston Tollway Bayport Terminal Sugar Land Bend Gulf Frwy Armand Bayou ±195’ ±370’ Park
Fort NASA Clear South Frwy Clear Lake Lake League City PARK ROW DRIVE
Smithers Lake ±10 ACRES ENERGY CORRIDOR | 2
Proposed Grand Pkwy | ±10 ACRES Energy Corridor Development Opportunity
Aerial View Facing West
HOUSTON METHODIST WEST CAMPUS TEXAS CHILDREN’S WEST CAMPUS
MUSTANG WOOD GROUP BARKER RESERVOIR PARK TEN ADDICKS RESERVOIR HIGHWAY
ADDICKS DAM ROAD
BP AMERICA MD ANDERSON
TERRY HERSHEY PARK IH - 10 | KATY FREEWAY TERRY HERSHEY PARK ±10 ACRES TERRY HERSHEY EXTENSION ENERGY CORRIDOR
BLACKHAW ST
R D REDHAW ST
W O R OMNI HOTEL K R A P
FOSTER WHEELER N ELDRIDGE PARKWAY
WORLEY PARSONS
CONOCOPHILLIPS EXECUTIVE SUMMARY
Location Overview Houston’s Economy: A Stalwart of Growth and Diversity
The surrounding area has seen healthy population and commercial growth since 2010, and Houston’s Houston ranks as the 4th most populous city in the United States with 2.3 million citizens and the 5th most overall “center” has gradually shifted westward as a result according to local economists. This westward populous MSA with 6.9 million residents. Houston was number 2 behind DFW in population growth over expansion is projected to continue with corresponding commercial development that will create tens of the last year and has consistently added between 100,000 and 150,000 residents over the last 3 years. thousands more jobs, and the region will remain attractive to renters on a long-term basis. On top of population growth Houston is home to greater than 3 million jobs and job growth continues to increase with April T-12 numbers adding another 84,500 jobs. Access to Houston’s Largest Employment Centers Superior Demographics The site is located with direct access to Interstate 10 and is in close proximity to Highway 6, Sam Houston Tollway/Beltway 8 and Westpark Tollway giving multiple commute options to Houston’s largest The site is flanked by Houston’s most affluent neighborhoods and has outstanding demographics to support employment districts. numerous development configurations, with key measures that far exceed Houston MSA averages. • Energy Corridor, the central business district of West Houston and third largest employment center in DEMOGRAPHICS 1-MILE 3-MILE 5-MILE the Houston metropolitan area with 300+ companies, 105,090 employees, and 31.6 million square feet 2018 Population Estimate 6,653 75,474 275,375 of commercial space. 202 Projection 7,253 81,440 277,351 • Residents can reach the Galleria/Uptown District (83,000+ jobs), Sugar Land (54,000+ jobs) Texas Growth 2018-2023 9.02% 7.91% 7.76% Medical Center (106,000+ jobs) and Downtown Houston (150,000+ jobs) in under 30 minutes. 2018 Average Household Income $136,752 $133,051 $111,892 % HH income $250,000+ 8.42% 8.22% 5.92% Houston Multifamily Market Poised for Growth Median Owner Occ. Housing Value $270,413 $358,771 $262,852
Recognized Nationally as Top Performing Market Westlake Plaza: BP America Headquarters Houston was recently ranked the #3 undersupplied metro in the nation by National Multi Housing Council with an estimated 15,300 units needed annually from now until 2030 to meet population growth and changing housing dynamics. By 2030, Houston will have an estimated 3.8 million renters based upon the MSA’s prolific population growth. Additionally, 8,571 units are expected to deliver in the Houston metro area in 2018, which is down from 21,707 units is 2016 and 13,843 units in 2017.
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±10 ACRES ENERGY CORRIDOR | 4 | ±10 ACRES Energy Corridor Development Opportunity
Aerial View Facing Northwest
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AR ER RESERV IR A IC S RESERV IR A IC S AM R A AR R I AY R ±10 ACRES M A ERS ENERGY CORRIDOR SI E T X RT AMERICA I ATY REE AY E E Y S Y ER TERR I I S SIEME S I AS MEM RIA RIVE M I TE TERRY ERS EY AR STER EE ER
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AY AR I E R E LOCATION OVERVIEW
#3 LARGEST EMPLOYMENT CENTER IN HOUSTON MSA WITH MORE JOBS THAN HOUSES The site is located in the heart of the Energy Corridor, the central business district of West Houston and third largest employment center in the Houston metropolitan area with 300+ companies, 105,090 employees and 30.8 million square feet of office space (68% of which is Class A). Its growth trajectory suggests nearly 10 times more jobs than housing units will be added to this area over the next 13 years.
TOP 10 MAJOR EMPLOYERS IN THE ENERGY CORRIDOR NON-ENERGY COMPANIES WITH 500+ EMPLOYEES IN ENERGY CORRIDOR Distance from Rank Company Classification Total Employees the Site 25% OF JOBS IN ENERGY CORRIDOR ARE NOT ENERGY RELATED 1 Wood Group 4.1 miles Energy 10,960 2 BP America 1.6 miles Energy 9,537 3 Technip USA 3.0 miles Energy 4,300 4 ConocoPhillips 0.5 miles Energy 3,000 5 Shell Oil Company 5.9 miles Energy 3,000 6 Methodist West Houston 5.0 miles Non-Energy 2,100 7 Mariner Post-Acute Network 2.6 miles Non-Energy 2,000 8 The Friedkin Group 2.5 miles Non-Energy 2,000 9 Sysco Corporation 2.5 miles Non-Energy 1,800 10 Citgo Petroleum 2.2 miles Energy 1,367
ENERGY CORRIDOR PROJECTIONS Absolute Category 2018 Existing 2030 Projected Change THE ENERGY CORRIDOR WILL CREATE Office Space 30,825,846 SF 42,427,783 SF +11.6 million SF NEARLY 10X MORE JOBS THAN HOUSING Total Commercial Space 31,653,981 SF 47,952,712 SF +16.3 million SF Population 22,034 people 30,720 people +8,686 people UNITS OVER THE NEXT 13 YEARS. Housing (MH + SF) 10,953 units 16,988 units +6,035 units Employment 105,090 jobs 162,989 jobs +57,899 jobs
±10 ACRES ENERGY CORRIDOR | 6 LOCATION OVERVIEW
TERRY HERSHEY PARK Sitting adjacent to the site, Terry Hershey Park is a county park that was created in 1989 and runs parallel to a roughly 6-mile (9.7 km) stretch of the Buffalo Bayou in western Houston, Texas. The park hosts a network of trails that run along the bayou from State Highway 6 to the Sam Houston Tollway and is a popular destination for local residents, runners, and bicyclists. The park maintains a network of both paved asphalt paths and dirt trails along the bayou. The paved walkways are located in the cleared stretch of the park, free of trees, and are about 10 feet in width. The dirt trails, however, cut through the densely grown forest growing along the bayou, and are not easily accessible. The park promotes its signature bike trails, the “Anthills”.
±10 ACRES ENERGY CORRIDOR | 7 LOCATION OVERVIEW
Langham Park North Concept Plan A DESTINATION PARK FOR WEST HOUSTON Terry Hershey Park is a popular and important park in The Energy Corridor. The trails and landscape connect the entire Buffalo Bayou system with the Addicks and Barker Reservoirs, and include a range of active and passive park and recreation spaces. The master plan recommends building upon these great assets and evolving the park into 1 a world-class regional destination for The Energy Corridor and West Houston. A new SUBJECT central park for people and wildlife, the transformation will preserve and enhance the PROPERTY riparian environment, protect environmentally sensitive areas, and introduce community amenities including fields, trails, a pond, public art, gardens, playgrounds, and picnic 2 areas.
Major elements of the new park (henceforth Langham Park) would include the following: PARK ROW
• Refinement of the Langham Creek channel and riparian landscape to enhance the 4 environmental values of the creek corridor for local flora and fauna • A spillway park below Addicks Dam with boardwalks, scenic overlooks, and an archaeological preservation area to showcase the natural and cultural history of The 3 Energy Corridor • Additional pedestrian bridges over Langham Creek as well as boardwalk bike trails to enhance connectivity for pedestrians and bicyclists to entry points along the neighborhood
• A neighborhood park for residents and families with community gardens, playgrounds, 10 and picnic areas, complete with barbecue grills east of the creek • A comprehensive landscape strategy that integrates environmental systems to better manage stormwater and urban runoff within the park and adjacent properties A new park, responsive of the needs and desires of the community, can be a valuable catalyst to developing new and high quality residential and commercial uses in The Energy Corridor. With its ideal location in close proximity to job centers, residential neighborhoods, transit routes, and the larger reservoir parks, Langham Park is the perfect place to implement a great community park. With a focus on designing and implementing a contemporary, sustainable, and diverse park experience for visitors, Langham Park will be a focal point of in the larger Houston park system.
±10 ACRES ENERGY CORRIDOR | 8 LOCATION OVERVIEW
EXAMPLE REDEVELOPMENTS
River’s Edge Park; Council Bluffs, IA Walden Woods; Concord, MA
Langham Park North Concept Plan
1
This hilly open space is designed for passive recreation such as pick-up 1 games, and formal events like concerts, festivals, and social gatherings.
2 Multiple opportunities to touch, get close to, and experience the water 2 create a rich intermingling of users and nature.
PARK ROW
4 Some areas of the park are environmentally sensitive and will be 3 respected while allowing opportunities for interpretive learning.
3 Pedestrian and bicycle trails will traverse the park and connect to the 4 larger Corridor-wide networks of trails.
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Levee Raising, Wilkes-Barre, PA Levee Raising, Wilkes-Barre, PA
±10 ACRES ENERGY CORRIDOR | 9 LOCATION OVERVIEW
DRIVE-TIME TO MAJOR EMPLOYMENT CENTERS
±10 ACRES ENERGY CORRIDOR CIT CENTRE 5 MINUTES 10
C 20 MINUTES
T E ALLERIA 15 MINUTES
DRIVE DISTANCES & TIMES DISTANCE DRIVE LOCATION (MILES) (MINUTES) CITYCENTRE 3.8 6 The Galleria 13.4 15 CBD 17.9 20 69
±10 ACRES ENERGY CORRIDOR | 10 LOCATION OVERVIEW
INGRESS/EGRESS MAP
The site has very quick access to I-10 .
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SUPPORTING DEMOGRAPHICS AND ZONED TO #1 SCHOOL DISTRICT IN HOUSTON MSA The site is well-positioned for future rent growth and long-term value appreciation. Its drivers beyond its quality, visibility and employment include a highly-sought after quality of life punctuated by the surrounding affluent single-family housing, top-rated schools and walkable amenities.
DEMOGRAPHICS HOUSING SCHOOLS WALKABLE AMENITIES 15.4% 30% #1 7,800 Acres Household Growth within Increase in Single-Family Zoned to the #1 Rated School George Bush Park One-Mile Radius Sales Prices in Energy Corridor District (Katy ISD)in Houston MSA over the Last 10 Years for 4 Consecutive Years + 500 Acres $136,752 Terry Hershey Park Average Household Income Within One-Mile $395,735 A Radius of the site (50% Higher Average Single-Family Sales Katy ISD Ranking by the than Houston MSA) Price in Energy Corridor Texas Education Agency 21MM SF Class A Office Space 2% Only 305 out of 13,302 Homes Near the Site are Available for Sale
±10 ACRES ENERGY CORRIDOR | 12 LOCATION OVERVIEW
The Site is five miles from the Sam Houston Tollway and eight miles from the Grand Parkway, • Corporate headquarters for Atwood Oceanics, an offshore drilling company Houston’s two outer loops, which provide access to every other major highway in the • Corporate headquarters for Alta Mesa Holdings, an oil and gas onshore acquisition, metropolitan area. exploration and production firm Widely-used, east-west local thoroughfares in the vicinity include Memorial Drive (one-half • Houston office of KBC Advanced Technologies, a technology-based mile), Briar Forest (two miles) and Westheimer Road (three miles). All three offer alternative consulting company commutes to employment and are lined with convenient retailers, restaurants and service- oriented businesses. Directly west on Interstate 10 is the 550-acre, Park 10 Regional Business Center, the largest master-planned, mixed-use development in the Energy Corridor. It is home to the majority of Major Highway Proximity the Energy Corridor’s primary employers including the Wood Group, ConocoPhillips, Shell and the Texas Medical Center West Campus. Uninterrupted Commute Highway Distance Direction to Large Employment Centers The Texas Medical Center West Campus is less than six miles from the site, and the 170-acre Park 10/Energy Corridor (north) complex is home to the $220 million Texas Children’s Hospital West Campus and the $300 million Highway 6 2 miles North-South Houston Methodist West Hospital. Methodist Hospital is currently undergoing a $200 million Sugar Land (south) expansion program that is expected to be completed Katy (west), Energy Corridor, Interstate 10 1,000 feet East-West by mid-2018. Memorial City and Downtown (east) Katy (west), Westchase District Westpark Tollway 7 miles East-West and Galleria (east) Westchase District (south), Willowbrook Beltway 8 4 miles North-South (north)
Proposed infrastructure improvements according to The Energy Corridor District Unified Transportation Plan (2016-2020 Short-Term Project) that will benefit new ownership include: • Energy Corridor transit options including a commuter shutter and trolley circulator • A protected intersection for pedestrians and bicyclists at Interstate 10 and Highway 6 • Streetscape enhancements at Interstate 10 and Highway 6 A new MD Anderson Cancer Center campus is under construction near the site. • Traffic signals and pedestrian infrastructure at Grisby Road and Highway 6 intersection Other new developments are planned or underway near the site: • Trail connection, sidewalks and pedestrian bridge from Barker Dam to Grisby Road • MD Anderson Cancer Center’s new 175,000 square foot clinical building on its The site is located in the heart of the Energy Corridor, the central business district of West 36-acre campus with plans for future towers in subsequent phases. The new center will Houston and third largest employment center in the Houston metropolitan area. It is home to open in 2019 and create 100 new jobs. headquarters and regional offices of the world’s largest energy firms including Wood Group, • Republic Square is a 35-acre redevelopment of a former ExxonMobil Chemical campus. Third BP America, ConocoPhillips, Shell and Citgo. Non-energy companies with a large presence Palm Capital plans to have multiple uses on site including office, hotel and retail. include the Methodist Hospital System, Sysco, Cardinal Health, and Gulf States Toyota. • Transwestern and Core Real Estate both own land next to MD Anderson and have plans for The site is in close proximity to Energy Crossing I and II, two recently-constructed, LEED 1.5 million square feet and 1.3 million square feet, respectively, Class A office buildings. certified Platinum Class A office buildings totaling 567,570 square feet on 10.8 acres. The two buildings are 94% occupied. Major tenants include: • The site is four miles north of the Shell Technology Center Houston, which spans 200 acres and is the largest technology center in the world for Shell. There are 2,000 specialized • US headquarters for MODEC, a global supplier and operator of offshore professionals working in 44 buildings and 1.2 million square feet of laboratory and office floating platforms space.
±10 ACRES ENERGY CORRIDOR | 13 LOCATION OVERVIEW
Employment | Within 20-Minute Commute The site has direct access to Downtown Houston via Interstate 10. Residents can reach the The site is four miles and 10 minutes from Memorial City, a 265-acre employment district with city’s largest employment center in approximately 20 minutes. Downtown Houston is one of the 12,500+ employees, 3.6 million square feet of retail space, 2.9 million square feet of primarily ten largest CBDs in the nation with 5,585+ companies (including nine Fortune 500 companies) Class A office space, and CityCentre, a 37-acre upscale mixed-use development. The largest that employ 150,195+ personnel in 91 office buildings totaling more than 48 million square feet. employers are Memorial Hermann Memorial City, Memorial City Mall, a Chase Bank service Residents are 13 miles and 15 minutes from the Galleria/Uptown District, the city’s preeminent center and CEMEX US headquarters. shopping district, tourist destination, and substantial employment center with more than Seven miles and 17 minutes southeast of the site is the Westchase District, one of Houston’s 200,000 daily visitors and 2,000 multi-national companies employing 83,000 personnel in 30 largest master-planned communities. The Westchase District spans 2,700 acres contains 18.3 million square feet of commercial office space and six million square feet of high-end retail million square feet in 119 office buildings, 2.1 million square feet in 42 retail centers and 3,322 space in 1,000+ stores. hotel rooms in 24 hotels. The district is also home to 1,500+ businesses with 93,652 employees. The site is 19 miles and 30 minutes from the Texas Medical Center, the largest medical center in the world, spanning 1,345 acres and encompassing 50 million gross square feet in 290 permanent buildings with 106,000 direct employees, and 50,000 full-time students. Each year, the Texas Medical Center generates $25 billion in GDP.
The Westchase District’s 93,652 jobs are seven miles from the site.
Employment | Within 30-Minute Commute The community is 13 miles and 24 minutes from Sugar Land, one of Houston’s premier outlying suburbs and employment districts with over 25 million square feet of commercial space and 54,000+ jobs. Companies with a major corporate presence include Fluor Corporation, Minute Maid, Noble Drilling Services, Schlumberger, Texas Instruments and United Healthcare. The site is 19 miles from the Texas Medical Center, the largest medical center in the world.
±10 ACRES ENERGY CORRIDOR | 14 LOCATION OVERVIEW
Quality of Life | Residential Quality of Life | Schools According to local real estate experts, the median sales price of homes in the Energy Corridor ±10 Acres Energy Corridor is located in Katy Independent School District, the number one rated in 2016 was $335,500, a 21% over the last five years and 30% over the last ten years. Despite school district in the Houston MSA for four consecutive years by Niche and the 13th ranked the volatility in the energy industry over the last few years, home values have continued to rise school district in the state of Texas. with the average listing today coming in at $395,735. Katy ISD currently spans 181 square miles with a student enrollment of 70,330. The district The site is just north of a number of the Energy Corridor’s most desirable neighborhoods and employs more than 9,039 teachers and administrators at its 60 schools and has been awarded subdivisions and competition is very high for limited listings. Home prices are in excess of the highest possible rating by the Texas Education Agency. The specific schools to which the $300,000, meaning that for many individuals and families that live in the Energy Corridor area, site are zoned are noted below. renting is the only option. Zoned Schools
Nearby Residential Neighborhoods School Distance Students/Staff Neighborhood Homes For Sale/Total Homes Average Sales Price Wolfe Elementary 1.9 miles 432/49 Barkers Landing 12/361 or 3.3% $538,475 Mayde Creek 6.6 miles 1,135/142 Fleetwood 15/509 or 2.9% $494,300 Taylor High School 7.3 miles 2,921/206 Briar Hills 17/668 or 2.5% $376,947 Taylor High School is currently ranked the #26 high school in Houston out of 171 high schools Parkway Villages 25/576 or 4.3% $491,272 and #86 in Texas out of 1,159 high schools. It currently holds an A+ ranking by the Texas Education Agency. In addition to the zoned schools, the site is within five miles of The Village School, a coeducational and non-denominational college preparatory boarding school that offers the highly sought-after International Baccalaureate (IB) Diploma program. There are 617 students (30% international) enrolled at the private school and most reside in furnished apartments offsite. The site is proximate to Fortis College, which offers healthcare and skilled trade training programs to 1,000 students annually, three Houston Community College Campuses (Spring Branch, Katy and Alief) and the University of Houston Cinco Ranch campus.
An $800K home for sale less than two miles from the site in the Barkers Landing neighborhood. The site is within five miles of The Village School, a highly acclaimed private boarding school.
±10 ACRES ENERGY CORRIDOR | 15 MULTI-HOUSING MARKET OVERVIEW
MARKET OVERVIEW O Average Occupancy 10Yr Avg 92.0% Building upon the momentum of late 2017, Houston reasserted its position as one of the national leaders in economic 90.0% growth and multi-housing performance. In March, the U.S. Census Bureau reported that the Houston metropolitan area 88.0% population grew 1.4% last year (+94,417 people), ranking 2nd in the nation, while the latest figures from the U.S. Bureau QoQ Change of Labor Statistics showed 2% job growth (+62,500) over the last 12 months, ranking 4th amongst its peers. 86.0% 84.0% YoY Change These demand drivers propelled the multi-housing market forward, which recorded 15,406 units of net absorption year- 82.0% over-year in March according to Apartment Data Services. The Houston metropolitan area exhibited 5.2% rent growth 80.0% over the same period, and occupancy increased to 89.7% as well, up 1.5% from the first quarter of 2017. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18
In addition to a strengthening local economy, the other key factor in the city’s upswing in performance is its decreasing supply pipeline. Axiometrics reported that the Houston metropolitan area will have the steepest decline in new deliveries Average Rent PSF 10Yr Avg year-over-year in 2018. There are approximately 8,571 units scheduled to deliver in 2018 in the Apartment Data Services R R $1.20 database, a 62% drop from deliveries in 2017. It will be the first year since 2012 that the city would have less than 10,000 $1.10 units added to the new supply. To date, there are only 2,529 units scheduled for 2019. $1.00 QoQ Change $0.90 The lack of new construction capitalized and scheduled thus far is helping to mitigate concerns about the impact of $0.80 Harvey move-outs on the market, as the remainder of people in temporary housing migrate back to homes this year. YoY Change $0.70 Investors have noted Houston’s rebounding performance, and transaction volume increased 185% year-over-year at the $0.60 end of the first quarter of 2018, according to Real Capital Analytics, with $1.7 billion closed within the first three months $0.50 of the year. Only three other cities (Manhattan, Dallas and Los Angeles) posted more trade volume than Houston in the 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18 first quarter.
MARKET SNAPSHOT A Net Absorption (units) 10Yr Avg # of Operating Communities 2,738 T12 Rental Rate Growth 5.2% 20,000 18,000 # of Operating Units 642,037 Occupancy* 89.7% 16,000 14,000 Avg YOC/Community 1988 Stabilized Occupancy 90.7% QoQ Change 12,000 10,000 Avg Units/Community 234 T12 Occupancy Growth 1.5% 8,000 Avg Size (sf) 882 T12 Deliveries (units) 13,604 6,000 YoY Change 4,000 Average Rent Per Unit ($/month) $1,022 T12 Net Absorption (units) 15,406 2,000 0 Average Rent Per SF ($/month) $1.16 Under Construction (units) 10,114 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD Source: Apartment Data Services *Occupancy calculations include communities that are in lease-up and communities with down units taken offline.
N S New Supply (units) 10Yr Avg SUBMARKET OVERVIEW 25,000 20,000
The site is well positioned in the Energy Corridor/City Centre/Briar Forest Submarket, one of the city’s best performing QoQ Change 15,000 submarkets and leaders of absorption for numerous years running. The submarket has seen strong year over year rental 10,000 rate increases with a 6.6% increase over the last 12 months compared to the greater Houston market increasing only YoY Change 5.3%. Rental rates for Class A products in the submarket are $1.57 PSF further proving this submarket’s Class A product to 5,000 be in line with other Class A rental rates across Houston. Occupancy has also seen increases of 1.6% in the last 3 months. 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 On top of strong rent growth and occupancy growth, there is zero multifamily construction in the vicinity of this site and a YTD lack of real opportunities to build multifamily in the future.
16 | ±10 ACRES ENERGY CORRIDOR ±10 ACRES ENERGY CORRIDOR | 16 HOUSTON OVERVIEW
With a population of 2.3 million, Houston is the fourth-largest city in the United States. Preferred Corporate Home The Houston MSA, covering nearly 10,000 square miles and comprised of 6.77 million There are 24 Fortune 500 and 46 Fortune 1000 companies headquartered in Houston, ranking it third in the people, ranks third in job creation among MSAs between 2000 and 2016. In 2015, the nation. Many of these companies are tied to oil and gas but the list also includes several other industries, MSA passed the three million job mark for the first time in history and registered a GDP including banking, real estate, human resources, construction, food distribution, waste management, of $503.3 billion. As a global gateway city known for being the energy capital of the utilities, telecom, retail, tech and more. More than 1,500 significant corporate relocations or expansions world, Houston also boasts the nation’s largest medical center, a leading U.S. port and an have occurred since 2009 (Relocation/ expansions creating more than 50 jobs, leasing 20,000 square feet internationally renowned hub for arts. and/or investing more than $1.0 million).
Energy Capital of The World 2006-2016 POPULATION & EMPLOYMENT % GROWTH MAJOR U.S. METROS Houston is home to over 4,800 energy-related companies with nearly every major energy company maintaining 35% a presence in the city. Despite the negative headlines surrounding the industry since the collapse of the price of
Austin 30% oil in 2014, the petrochemical and refining complexes located along the Houston Ship Channel are growing at a rapid pace. There are over $50 billion of new refining projects either recently completed or under construction 25% in the Greater Houston area. The petrochemical and refining complex along the 25-mile Houston Ship Channel at the Port of Houston is the largest in the Western Hemisphere and the second-largest in the world. Dallas-Fort Worth 20% Denver Houston
EMPLOYMENT 15% San Francisco Seattle
Boston Washington DC 10% Atlanta San Diego New York City Miami 5% Phoenix Los Angeles NNationalational AAverageverage Chicago
0% 0% 5% 10% 15% 20% 25% 30% 35%
POPULATION
Sources: Oxford Economics, Real Capital Analytics, HFF Research, *dots represent all U.S. metros as classified by Oxford Economics, those highlighted in orange represent the 20 most liquid CRE markets across property types according to RCA and include where HFF has an oce/significant presence
±10 ACRES ENERGY CORRIDOR | 17 HOUSTON OVERVIEW
Texas Medical Center The Port of Houston The Texas Medical Center (“TMC”) in Houston is the largest life sciences destination in the world, with The Port of Houston is the busiest container port on the Gulf Coast with over 80% of activity tied to oil and over 56 member institutions (including 21 hospitals). The TMC is equivalent to the size of the seventh- gas. Plastics, petrochemicals and heavy machinery manufactured in Texas are the lead export activity while largest Central Business District (CBD) in the U.S., and has tripled in size over the past 20 years. With over consumer products and raw materials are the lead import activity. The recently expanded Panama Canal now 106,000 employees (more than ExxonMobil, Google, or Apple), 50,000 life science students, and thousands allows the transit of ships with 12,600 containers per vessel and large liquefied natural gas (LNG) tankers, of volunteers and patient visits, over 160,000 people visit the TMC each day. Spanning 45.8 million square opening up significant opportunities for the Port of Houston. feet, the Texas Medical Center currently has over $3 billion of projects under construction and is expected to • The Port of Houston has ranked first in the U.S. in import tonnage for the past 25 years, is the largest eclipse 59 million square feet by 2020. Gulf Coast container port, and has ranked 2nd in total tonnage for 23 straight years. • The Houston-Galveston Customs District handled $162.8 billion in trade in 2016, including $69.8 billion in imports and $93.0 billion in exports. That makes Houston the largest export market in the U.S. • There are ten major rail companies that connect the Port of Houston to the largest markets in the continental U.S., Canada, and Mexico.
Global Hub for Arts and Culture Forbes Travel Guide ranked Houston among its top 12 destinations in the world for 2017. The city is widely recognized as an important city for the contemporary visual arts and the Theater District in downtown Houston has the second-most number of theater seats of any U.S. city after New York City (14,000+). The 17-block district features nine world renowned performing arts organizations, and many smaller ones, in four venues – Jones Hall, Wortham Theater Center, Alley Theatre, and Hobby Center for the Performing Arts. The The Houston Airport Center Houston Museum District boasts over 20 museums, galleries and cultural centers such as the Museum of Fine Houston is one of only six U.S. cities with two international airports. In 2016, 54.5 million passengers (11.6 of Arts, Houston (MFAH), the Menil Collection, and the Houston Museum of Natural Science. which were international travelers) passed through the Houston’s airport system. George Bush Intercontinental Global Presence and William P. Hobby offer direct flights to a combined 200 destinations across five continents. Ellington Airport (EFD) was recent granted a launch site license from the Federal Aviation Administration Houston ranks third in the U.S. in terms of its total number of consular offices with 90+ countries that (FAA) to establish a launch site for Reusable Launch Vehicles, making it the 10th commercial spaceport in maintain official government representation. There are also 15 foreign governments which also maintain the U.S. The site benefits from its long history of collaboration with the National Aeronautics and Space trade and commercial offices, and the Houston metro area has 35 active foreign chambers of commerce. The Administration (NASA)’s Lyndon B. Johnson Space Center, where human spaceflight training, research, and Greater Houston Partnership lists 5,000+ Houston companies doing business abroad and 1,000 Houston firms flight control are conducted. reporting foreign ownership.
±10 ACRES ENERGY CORRIDOR | 18 DAVIS ADAMS CHRIS CURRY Managing Director Managing Director (713) 852-3558 (713) 852-3466 [email protected] [email protected]
STERLING CURRY Real Estate Analyst (713) 852-3466 [email protected]
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HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described 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, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.