THETHETHE ESPERSONESPERSONESPERSON 808 TRAVIS STREET & 815 WALKER AVENUE • HOUSTON, TEXAS EXECUTIVE SUMMARY THETHETHE ESPERSONESPERSONESPERSON 808 TRAVIS STREET & 815 WALKER AVENUE • HOUSTON, TEXAS HFF, as the exclusive representative of the owner, is pleased to offer for sale a 100% fee simple interest in Esperson (the “Property”), a 19 and 27-story, 599,107 square foot office building located in Houston’s central business district. Constructed in 1927 and 1941 respectively, Esperson is the only iconic structure of Italian Renaissance in Houston’s most densified employment center. The property is currently 62% leased with 4 years remaining average lease term and is situated on 1.447 acres, a full city block. Located at the intersection of Rusk and Walker Street, Esperson has direct access to Houston’s METRO Rail and 7.5 mile underground tunnel system. Over the last 36 months, ownership invested nearly $9 million in non-leasing capital, positioning the asset at the top of its competitive set. Today, considerable value creation is achievable through rolling current in-place rents to market and through the lease up of the remaining 226,561 square feet of vacant space. Redeveloping and expanding Houston’s CBD infrastructure – realized through rebuilt streets – highways, new mass transit and enhanced public utilities coupled with new office, multi-family, and retail projects have transformed Houston’s core into a vibrant, modern 24/7 environment for people to live, work and play. Esperson offers investors prestige, history, quality, abundant amenities, and a prime location in Houston’s largest employment center. INVESTMENT SALES H. DAN MILLER, CCIM, SIOR Senior Managing Director Tel: (713) 852-3576 [email protected] MARTIN T. HOGAN Director Tel: (713) 852-3557 [email protected] HOLT MCNAIR Real Estate Analyst Tel: (713) 852-3414 [email protected] JOHNNY KIGHT Real Estate Analyst Tel: (713) 212-6575 [email protected] CAPITAL MARKETS INQUIRIES SUSAN HILL Senior Managing Director Tel: (713) 852-3564 [email protected] THE ESPERSON EXECUTIVE SUMMARY HOUSTON, TEXAS 1 INVESTMENT OVERVIEW ADDRESS: 808 Travis Street & 815 Walker Avenue RENTABLE AREA: 599,107 SF YEARS BUILT: Niels Esperson (1927), Mellie Esperson (1941) NUMBER OF FLOORS: Niels Esperson (27) and Mellie Esperson (19) PERCENT LEASED: 62.2% SITE SIZE: 1.447 Acres INVESTMENT HIGHLIGHTS SUMMARY • Nearly $9 million in completed and ongoing capital • Esperson has been awarded a walk score of 98 improvements • Diversified tenant base with limited exposure to the • Upside potential in the lease up of the remaining energy sector 226,561 square feet of vacancy • Recognized by BOMA as “The Outstanding Building • Direct access to the METRO Rail along Rusk Ave. of the Year” for 2016 • Four connections to the central business district’s • Built in 1927 and 1941, Esperson stands as one of underground tunnel system the two major historical office buildings located in Houston’s Central Business District. THE ESPERSON EXECUTIVE SUMMARY HOUSTON, TEXAS 2 INVESTMENT HIGHLIGHTS SIGNIFICANT CAPITAL INVESTMENT The Owner recently invested nearly $9 million in non-leasing capital. The asset now features a redesigned and upgraded lobby, tunnel access renovations including brand new escalators, installation of new sprinkler lines, and elevator improvements. In addition, there are new multi-tenant corridors, façade repairs, garage panel and fire escape repairs and white box spaces. NON-LEASING CAPITAL INVESTED IN LAST 3 YEARS Tenant Areas $2,655,000 Corridors, Restrooms, Elevators, White Box Space Building Upgrades $2,165,000 Façade, Sprinklers, Curtain Wall, Fire Escape Main Lobby & Tunnel $4,040,000 Lobby, Tunnel, Escalators TOTAL $8,886,000 SIGNIFICANT UPSIDE POTENTIAL AT AN ATTRACTIVE BASIS OUTSTANDING ACCESS AND VISIBILITY At 62.2% leased, the Building offers significant upside potential with Esperson is one of the most recognizable buildings in Houston. It is 226,561 square feet available to lease. In addition, embedded upside the only office building in the Houston CBD designed after Italian exists as average in place rents are 30% below current market. The Renaissance architecture. Ideally located along the METRO Light full 12th floor, over 30,000 square feet, is immediately available Rail, Esperson provides great ingress and egress for employees. The along with five boutique high rise floors, ranging between 2,267 METRO Light Rail connects Downtown, Midtown, the Museum and 9,057 square feet, which are ideal for smaller tenants looking District, the Texas Medical Center, NRG Park and the South Fannin for unique office space. Additionally, the building can be purchased Park and Ride lot. The Property is also easily accessible from the at a significant discount to replacement. surrounding major highways. Esperson is conveniently located at Travis and Rusk Streets, which serve as main arteries into the CBD. THE ESPERSON EXECUTIVE SUMMARY HOUSTON, TEXAS 3 IRREPLACEABLE LOCATION IN HEART OF THE CBD TUNNEL ACCESS WITH UNMATCHED AMENITY BASE Esperson is located on a full city block at the geographic center of the Direct tunnel access is essential for downtown buildings and provides CBD. This central location is convenient to the Federal and County an expansive amenity base for tenants. Esperson sits at the epicenter court houses, all of the major CBD hotels, Minute Maid Park, the of the Downtown tunnel system and is one of only two buildings Toyota Center and the Theater and Entertainment districts. More with four access points to the tunnel. Tenants and hotel guests in than 30 restaurants and other retail amenities lie within a 2-block two recent, high-profile developments in the CBD, BG Group Place radius of the building providing Esperson with a market-leading and the JW Marriott hotel, must walk through Esperson’s tunnels walk score of 98. to access the rest of the system. Recently, Ownership invested over $3.1 million to the tunnel level amenities and food courts as well as new escalators connecting the tunnel to the building lobby. The DIVERSIFIED AND LOYAL TENANT ROSTER tunnels consist of a 7.5-mile underground pedestrian tunnel system The CBD submarket benefits from a diversified blend of companies connecting most major CBD buildings offering consumers over located within its boundaries featuring market leaders in the banking 400,000 SF of retail space. Major demand drivers on site and adjacent and finance, energy, professional business service, and information to Esperson include Amegy Bank, Allstate Insurance, Schlotzsky’s, technologies sections. Mirroring the overall CBD tenant mix, Smoothie King, Mediterranean Grill, Peli Deli, Midtown Dentistry, Esperson has minimal exposure to any one industry. The CBD’s Texas State Optical, Memorial Chiropractic, and Vision Source. In diverse blend of prominent companies coupled with Esperson’s proven addition to the retailers, the Building offers valet parking, a tenant track record of attracting firms from a wide-array of sectors bodes bike room, an Uber pick up/drop-off location and 24 hour security. well for the lease-up of the project. Additionally, there is limited tenant rollover thorough 2021. AWARD WINNING AND EFFICIENT DESIGN Esperson has recently been recognized for several honors. In 2016, The Building Owners and Managers Association (BOMA) acknowledged Esperson as The Outstanding Building of The Year (TOBY) in the Historical category. It was recognized as one of seven buildings nominated in North America. The Building has also been awarded the Energy Star label in 2002, 2007 – 2012, and 2015 – 2016 from the U.S. Department of Energy and Environmental Protection Agency. These awards are a significant honor particularly for a building of this vintage. MARKET SQUARE TOWER HOBBY CENTER OF THE PERFORMING ARTS HILCORP TOWER MAIN TEXAS CHEVRON I & II MAIN MINUTE MAID PARK ONE PARK PLACE THE ESPERSON HOUSTON CENTER HESS TOWER GEORGE R BROWN CONVENTION CENTER DISCOVERY GREEN SKYHOUSE TOYOTA CENTER CAROLINE APARTMENTS FOUR SEASONS GREEN STREET 69 ST JOSEPH’S HOSPITAL IH METRO HQ IH 45 HILTON AMERICAS HOTEL ALLEN PARKWAY SIXTH WARD FIRST WARD MEMORIAL 2017 Houston CBD Block Map WEST DALLAS Downtown Tunnel System Open Space Historic District Skyline District/Houston Center Area Theater District Shopping District INTERSTATE 45 Metropolitan Hobby Center Garage Heritage Plaza City for the Downtown Garage Hall Performing Arts Aquarium Allen Annex Center Garage BAGBY Three Allen Heritage Public Center Doubletree Plaza City Bayou Center Hotel Library Hall Place 1600 Smith Antioch Garage Baptist Church Two 1600 Allen One Smith Chevron Center Allen Julia Ideson Bob Casey Wortham 500 Crowne One Center 1100 Smith Building U.S. Jefferson Plaza Garage Theater Courthouse White Oak Bayou SMITH THEATER DISTRICT 1401 Smith KINNEY Mickey 600 Kellogg Garage Hyatt 1100 Wells C One Lanier Alley Lyric Houston M 700 Leland Chevron Regency Regency Louisiana Fargo Shell Jones Theatre Ballet INTERSTATE 10 Jefferson Brown & Root Garage Public Louisiana Plaza Centre Federal Tower Two 1400 Louisiana Hotel Plaza Plaza Works Center Building Garage LOUISIANA 1500 Market Exxon Wedge 777 Clay Centerpoint Kinder 811 Pennzoil Jones KBR Louisiana International Garage P Total Energy Morgan P Louisiana Place Hall 717 Texas Hogg Square Garage Garage Garage Tower Plaza Tower TEXAS Palace Tower CAPITOL WALKER MILAM 1300 HPD Travis 919 The Capitol J.P. Morgan Houston Old 800 Americana Place P Market Cotton YMCA P Main Head- Milam Esperson Tower Chase Chronicle Square Exchange Garage