PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet

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OFFERING MEMORANDUM

UT PHYSICIANS
      PLAZA
  3610 Stagg Dr, Beaumont, TX 77701

   Click the Icon or Visit
   https://vimeo.com/269695326/99f115dda9
   to View Exclusive Video Presentation

  Broker of Record: Timothy Speck
PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
CONFIDENTIALITY & DISCLAMER

THIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS OF VALUE AND SHOULD NOT BE CONSIDERED AN APPRAISAL. This information has been secured
from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are
approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc.
© 2018 Marcus & Millichap. All rights reserved.

                                                         NON-ENDORSEMENT NOTICE

Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any corporation's logo or
name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product,
service, or commercial listing of Marcus & Millichap, and is solely included for the purpose of providing tenant lessee information about this listing to prospective customers.

ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

                                                              N E T- L E A S E D D I S C L A I M E R

The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will not verify any of this
information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee, warranty or representation whatsoever about
the accuracy or completeness of any information provided.

As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any
purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation
to conduct a due diligence examination of this Property for Buyer.

Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future performance of this property. The
value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors.

Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to determine to your satisfaction with
the suitability of the property for your needs.

Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal and financial
documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is not a guarantee of future success.
Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of
actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply
with other material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and
lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including
the likelihood of locating a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential
replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property.

By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind of claim, cost, expense, or liability
arising out of your investigation and/or purchase of this net leased property.
PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
TABLE OF CONTENTS

           01
     INVESTMENT OVERVIEW

           02
  PRICING & FINANCIAL ANALYSIS

           03
DEMOGRAPHICS & MARKET OVERVIEW
PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
01
INVESTMENT
OVERVIEW
PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
UT PHYSICIANS
     PLAZA

  INVESTMENT HIGHLIGHTS

     100 Percent Occupied UT Physicians & Safelite AutoGlass

     75 Percent Occupied By UT Physicians | State of Texas Credit

(NNN) Both Triple-Net Leases with Management Reimbursed

     Renovated in 2017 | No Deferred Maintenance

     Located Off Interstate-10 with Over 140,000 VPD

                                                                    5
PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
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PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
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PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
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PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
140,970 VPD

              9
PLAZA UT PHYSICIANS OFFERING MEMORANDUM - LoopNet
Shadow Anchored Center (Not Included)

                                        10
The Event Centre
                                          Central Senior
                                          High School

                                                           Baptist Hospitals
                                                           Of Southeast Texas                              King Middle School

                                       SUBJECT PROPERTY                                             Pathways
                                                                                              Learning Center

                                                                     Ozen High School

56,237 Residents | 100,203 Employees
 $57,260 Average Household Income
                                                                                                                                11
Beaumont Country Club

                                              Knife River Corporation

                                                                               Fire Museum of Texas
                                                                               Edison Museum

                                                  Art Museum of
                                                  Southeast Texas                                        Beaumont
                                                                                                         Industrial Area

                                                      Baptist Hospitals                  Harbor Island
Beaumont Municipal                                    of Southeast Texas
Athletic Complex                                      1,620 employees

                                                                                                                            ExxonMobil Refinery
                                        SUBJECT PROPERTY                                                   2,400 acres | Employees: 2040 people
       Monsignor Kelly                                                                                                       & 1000 contractors
       Catholic High School

                                                                                                                           Lamar University
                                                                                                                           14,103 enrollment
                                                    Ozen High School                                                       1,410 employees

                                                                                                                                           Spindletop
                                                                                                                                           Park

          Lamar University
                                                                                                  •   Texas Home Health America LP
          Enrollment: 14,100
          Ozen High School                                                                        •   Exxon Mobile Refinery
          Enrollment: 1,100                                                                       •   Memorial Hermann Hospital
          Monsignor Kelly High School       105,694 Residents | 153,637 Employees                 •   Baptist Hospitals of SE Texas
          Enrollment: 450                     $59,981 Average Household Income                    •   Beaumont Refinery
                                                                                                                                               12
265 Miles

            13
02
PRICING & FINANCIAL
  ANALYSIS
UT PHYSICIANS
      PLAZA                 PRICING DETAIL & OPERATING DATA

                                                                                                         DEMOGRAPHICS
                                                                                                1-Mile     3-Miles      5-Miles
                                                            2017 Estimate Population             4,835      56,237      105,694
                                                            2017 Estimate Households             1,769      22,049       40,908
                                                            Daytime Population                  15,245     100,203      153,637
                                                            Average Household Income           $44,015     $57,260      $59,981

                                                                                                 MAJOR EMPLOYERS
                                                            EMPLOYER                                        # OF EMPLOYEES

Click Here to View Exclusive Video Presentation            Texas Home Health America LP                                   5,540

 https://vimeo.com/269695326/99f115dda9                    Exxon Mobile Refinery                                          3,040
                                                           Memorial Hermann Baptist Hospital                              1,759
THE OFFERING
                                                           Baptist Hospital of SE Texas                                   1,700
                                                           Beaumont Refinery                                              1,545
            3610 Stagg Drive, Beaumont, TX                 Dawson Marine Inc                                              1,000

                                                                                                         MAJOR TENANTS
SITE DESCRIPTION
                                                                                                           LEASE        LEASE
                                                                         TENANT                  GLA
                                                                                                         EXPIRATION      TYPE
Built | Renovated                            1968 | 2017
                                                            University of Texas Physicians      12,000     06/30/2027        NNN
Gross Leasable Area (GLA)                     15,744 SF
                                                            Safelite AutoGlass                   3,744     05/31/2021        NNN
Current Occupancy                                 100%
Lot Size                                 +/- .92 Acres
Ownership                                    Fee Simple

                                                                                                                        15
UT PHYSICIANS
                                                       RENT ROLL AND TENANT LEASE SUMMARY
         PLAZA

Tenant Name (Lease Type)              Square    Pro-Rata      Lease          Lease         Annual       Monthly         Annual        Base Rent           Base Rent      Tenant
Tenant Description                     Feet      Share      Commence       Expiration     Rent/ SF     Base Rent       Base Rent     Changes On          Changes To   Option Terms
University of Texas Physicians        12,000    76.22%      07/01/2017     06/30/2027      $20.00       $20,000         $240,000         None              None       Four, Five-Year
UT Physicians                     CAM: Reimburses pro-rata share, 6% cap on increases (excluding utilities & snow removal)         (Opt. 1) 07/01/2027    $288,000     Years 11-15
+/- 1,500 Clinicians | Over 80
                                  Taxes: Reimburses pro-rata share                                                                 (Opt. 2) 07/01/2032    $312,000     Years 16-20
medical specialties and
subspecialties, provides multi-   Insurance: Reimburses pro-rata share                                                             (Opt. 3) 07/01/2037    $336,000     Years 21-25
specialty care. UT Physicians
                                  Management: Management expense cannot exceed 4% of gross rental income                           (Opt. 4) 07/01/2042    $360,000     Years 26-30
help patients needing urgent,
highly complex care.              Other: None
Safelite AutoGlass                    3,744     23.78%      06/01/2011     05/31/2021      $12.00        $3,744          $44,928         None              None       One, Five-Year
Safelite Fulfillment, Inc.        CAM: Reimburses pro-rata share, 2% cap on increases (excluding utilities & snow removal)         (Opt. 1) 06/01/2021    $48,672      Years 11-15
+/- 720 Locations | Over 70
                                  Taxes: Reimburses pro-rata share
years of service, Safelite
knows auto glass and have         Insurance: Reimburses pro-rata share
grown to be the largest auto      Management: Management expense cannot exceed 5% of total common area expenses
glass specialist in the United
States.                           Other: None
Total Occupied                    15,744       100.00%                                                  $23,744         $284,928
Total Vacant                      0            0.00%                                                    $0               $0
Totals                            15,744       100.00%                                                  $23,744         $284,928

                                                                                                                                                                            16
                                                                                                                                                                            16
TENANT OVERVIEW

ABOUT UT PHYSICIANS
With more than 1,500 clinicians certified in more than 80 medical specialties and subspecialties, UT
Physicians provides multi-specialty care for the entire family. UT Physicians helps patients needing
urgent, highly specialized or complex care and also provides high-quality, wellness-oriented primary
care for routine illnesses and maintenance of good health.

Affiliated with the John P. and Kathrine G. McGovern Medical School at The University of Texas Health   UT Physicians among the
Science Center at Houston (UTHealth), UT Physicians health care providers are internationally
recognized for leading-edge medical research and treatment. Many are among the Woodward-White           Woodward-White “Best
“Best Doctors in America.” UT Physicians and McGovern Medical School are national leaders in
research, education and clinical excellence.                                                            Doctors in America.”
                                                                                                        Check Website here: https://www.utphysicians.com/about/
  LEASE SUMMARY
   Lease Type                                                                      Triple-Net (NNN)
   Tenant
   Rent Increases
                                                                     University of Texas Physicians
                                                                    (Opt. 1) 07/01/2027 - $288,000
                                                                                                                       80+
   Guarantor                                                                              Corporate                    SPECIALTIES
   Rating                                                                            AAA (Moody’s)
   Rent Commencement                                                                    July 1, 2017
   Lease Expiration                                                                   June 30, 2027
   Lease Term Remaining                                                             Over Nine Years
                                                                                                                  HEADQUARTERED IN
   Original Lease Term                                                                    Ten Years
   Renewal Options                                                                   Four, Five-Year         University of Texas
  RENT SCHEDULE
                YEAR                      ANNUAL RENT             MONTHLY RENT            RENT/SF
       07/01/2017 – 06/30/2027              $240,000                  $20,000              $20.00                     FOUNDED
  OPTION SCHEDULE
                                                                                                                      1972
                YEAR                      ANNUAL RENT             MONTHLY RENT            RENT/SF
       07/01/2027 – 06/30/2032              $288,000                  $24,000              $24.00
       07/01/2032 – 06/30/2037              $312,000                  $26,000              $26.00                        MORE THAN
       07/01/2037 – 06/30/2042              $336,000                  $28,000              $28.00
       07/01/2042 – 06/30/2047              $360,000                  $30,000              $30.00                   1,500 CLINICIANS

                                                                                                                                                                  17
TENANT OVERVIEW

ABOUT SAFELITE
With more than 70 years of service, Safelite knows auto glass. Safelite was founded at
a single location in Wichita, Kansas in 1947 and has grown to become the largest auto
glass specialist company in the United States with more than 720 locations
nationwide.                                                                                   On Average, Safelite Provides
From front and rear windshields to side glass, we’re proud to serve 6 million customers
every year. Whatever your auto glass needs may be, there’s a good chance we can fix
                                                                                              Over 1.5 Million Windshields
it through repair or replacement.                                                             a Year to More Than 6 Million
  LEASE SUMMARY                                                                               Satisfied Customers
                                                                                              Visit Safelite.com - https://www.safelite.com/

   Lease Type                                                            Triple-Net (NNN)
   Tenant                                                                          Safelite
   Rent Increases                                           (Opt. 1) 06/01/2021 - $48,672
   Guarantor                                                                    Corporate
                                                                                                            720+
   Ticker                                                                          Private                  LOCATIONS
   Rent Commencement                                                         June 1, 2011
   Lease Expiration                                                         May 31, 2021
                                                                                                          HEADQUARTERED IN
   Lease Term Remaining                                                Nearly Three Years
   Original Lease Term                                                          Ten Years                        Columbus, OH
   Renewal Options                                                         One, Five-Year

  RENT SCHEDULE
               YEAR                 ANNUAL RENT         MONTHLY RENT           RENT/SF
      06/01/2011 – 05/31/2021         $44,928                $3,744             $12.00
                                                                                                              FOUNDED
                                                                                                              1947
  OPTION SCHEDULE
               YEAR                 ANNUAL RENT         MONTHLY RENT           RENT/SF
      06/01/2021 – 05/31/2025         $48,672                $4,056             $13.00

                                                                                                  12,500+ EMPLOYEES

                                                                                                                                               18
UT PHYSICIANS
   PLAZA                     PRICING DETAIL & OPERATING DATA

                                                                                            CURRENT OPERATING DATA
                                                            Scheduled Base Rental Income                          $284,928
                                                            Expense Reimbursement Income
                                                               CAM                                        $5,161
                                                               Insurance                                  $13,062
                                                               Real Estate Taxes                          $11,803
                                                               Management Fees                            $12,598
                                                            Total Reimbursement Income                             $42,624
                                                            Effective Gross Revenue                               $327,552
                                                            Less: Operating Expenses                              ($42,624)
                                                            Net Operating Income                                  $284,928

 List Price                                   $4,320,000                    Operating Expenses            Current Per/SF

                                                             Common Area
                                                                            Utilities                    $1,116      $0.07

                                                             Maintenance
 CAP Rate                                         6.60%
 Price/SF                                           $274                    Landscaping                  $1,837      $0.12
                                                                            General R&M                  $2,208      $0.14
 Net Operating Income                           $284,928
                                                                            Total CAM Expenses              $5,161     $0.33
 Gross Leasable Area (GLA)                    15,744 SF
                                                                            Insurance Premiums            $13,062      $0.83
 Built | Renovated                           1968 | 2017                    Real Estate Taxes             $11,803      $0.75
 Lot Size                                   +/- .92 Acres                   Management Fee (4% of EGR)    $12,598      $0.80
 Ownership                                   Fee Simple                    Total Expenses                 $42,624      $2.71

                                                                                                                             19
03
DEMOGRAPHIC & MARKET
   OVERVIEW
5 Miles

3 Miles

1 Mile

          UT PHYSICIANS PLAZA

                                21
UT PHYSICIANS
       PLAZA                       DEMOGRAPHIC & MARKET OVERVIEW

 POPULATION                         1 Miles   3 Miles   5 Miles   HOUSEHOLDS BY EXPENDITURE                     1 Miles   3 Miles   5 Miles
▪ 2022 Projection                                                  Total Average Household Retail Expenditure   $48,752   $53,229   $55,593
   Total Population                   4,749    55,868   105,304   ▪ Consumer Expenditure Top 10 Categories
▪ 2017 Estimate                                                      Housing                                    $12,904   $14,018   $14,583
   Total Population                   4,835    56,237   105,694      Transportation                             $10,042   $10,607   $11,115
▪ 2010 Census                                                        Shelter                                     $6,879    $7,379    $7,698
   Total Population                   4,795    55,918   104,928      Food                                        $5,324    $5,819    $6,115
▪ 2000 Census                                                        Utilities                                   $3,480    $3,658    $3,769
   Total Population                   4,951    59,082   104,125      Health Care                                 $3,334    $3,746    $3,854
▪ Current Daytime Population                                         Personal Insurance and Pensions             $3,331    $4,116    $4,514
   2017 Estimate                     15,245   100,203   153,637      Entertainment                               $1,663    $1,972    $2,069
 HOUSEHOLDS                         1 Miles   3 Miles   5 Miles      Household Furnishings and Equipment         $1,256    $1,508    $1,581
▪ 2022 Projection                                                    Apparel                                     $1,179    $1,307    $1,378
   Total Households                   1,777    22,256    41,398    POPULATION PROFILE                           1 Miles   3 Miles   5 Miles
▪ 2017 Estimate                                                   ▪ Population By Age
   Total Households                   1,769    22,049    40,908      2017 Estimate Total Population               4,835    56,237   105,694
   Average (Mean) Household Size       2.52      2.49      2.50      Under 20                                   28.81%    27.42%    28.20%
▪ 2010 Census                                                        20 to 34 Years                             20.62%    20.72%    22.22%
   Total Households                   1,788    22,177    40,960      35 to 39 Years                              6.59%     6.04%     6.06%
▪ 2000 Census                                                        40 to 49 Years                             11.02%    11.09%    11.05%
   Total Households                   1,762    23,307    40,856      50 to 64 Years                             17.15%    19.30%    18.83%
▪ Occupied Units                                                     Age 65+                                    15.80%    15.44%    13.62%
   2022 Projection                    1,777    22,256    41,398      Median Age                                   35.41     36.49     34.67
   2017 Estimate                      2,007    25,289    46,492   ▪ Population 25+ by Education Level
 HOUSEHOLDS BY INCOME               1 Miles   3 Miles   5 Miles      2017 Estimate Population Age 25+             3,133    36,971    67,274
▪ 2017 Estimate                                                      Elementary (0-8)                           10.38%     7.55%     6.13%
  $150,000 or More                   2.01%     5.47%     6.53%       Some High School (9-11)                    11.32%    10.11%     9.18%
  $100,000 - $149,000                5.04%     7.97%     8.67%       High School Graduate (12)                  34.13%    31.54%    31.34%
  $75,000 - $99,999                  8.40%     8.12%     8.29%       Some College (13-15)                       26.57%    24.32%    24.71%
  $50,000 - $74,999                 16.06%    14.29%    15.34%       Associate Degree Only                       4.30%     4.84%     5.53%
  $35,000 - $49,999                 11.74%    13.70%    13.93%       Bachelors Degree Only                       5.69%    13.37%    14.81%
  Under $35,000                     56.76%    50.46%    47.23%       Graduate Degree                             3.22%     6.65%     6.87%
Average Household Income            $44,015   $57,260   $59,981    Created on May 2018
Median Household Income             $31,220   $34,641   $37,429
Per Capita Income                   $16,453   $22,678   $23,577

  Source: © 2017 Experian
                                                                                                                                      22
UT PHYSICIANS
        PLAZA                             DEMOGRAPHIC & MARKET OVERVIEW

                    Population                                                               Race and Ethnicity
                    In 2017, the population in your selected geography is 105,694. The       The current year racial makeup of your selected area is as follows:
                    population has changed by 1.51% since 2000. It is estimated that the     37.11% White, 46.90% Black, 0.05% Native American and 3.79%
                    population in your area will be 105,304 five years from now. The         Asian/Pacific Islander. Compare these to US averages which are:
                    current population is 47.97% male and 52.03% female. The median          70.42% White, 12.85% Black, 0.19% Native American and 5.53%
                    age of the population in your area is 34.67, compare this to the US      Asian/Pacific Islander. People of Hispanic origin are counted
                    average which is 37.83. The population density in your area is           independently of race.
                    1,346.67 people per square mile.
                                                                                             People of Hispanic origin make up 17.09% of the current year
                                                                                             population in your selected area. Compare this to the US average of
                                                                                             17.88%.

                    Households                                                               Housing
                    There are currently 40,908 households in your selected geography.        The median housing value in your area was $100,842 in 2017,
                    The number of households has changed by 0.13% since 2000. It is          compare this to the US average of $193,953. In 2000, there were
                    estimated that the number of households in your area will be 41,398      24,475 owner occupied housing units in your area and there were
                    five years from now, which represents a change of 1.20% from the         16,380 renter occupied housing units in your area. The median rent at
                    current year. The average household size in your area is 2.50 persons.   the time was $386.

                    Income                                                                   Employment
                    In 2017, the median household income for your selected geography is      In 2017, there are 153,637 employees in your selected area, this is
                    $37,429, compare this to the US average which is currently $56,286.      also known as the daytime population. The 2000 Census revealed
                    The median household income for your area has changed by 16.26%          that 58.76% of employees are employed in white-collar occupations
                    since 2000. It is estimated that the median household income in your     in this geography, and 41.29% are employed in blue-collar
                    area will be $43,618 five years from now, which represents a change      occupations. In 2017, unemployment in this area is 9.75%. In 2000,
                    of 16.54% from the current year.                                         the average time traveled to work was 20.00 minutes.

                    The current year per capita income in your area is $23,577, compare
                    this to the US average, which is $30,982. The current year average
                    household income in your area is $59,981, compare this to the US
                    average which is $81,217.

Source: © 2017 Experian                                                                                                                                     23
UT PHYSICIANS
         PLAZA                                   DEMOGRAPHIC & MARKET OVERVIEW

BEAUMONT
OVERVIEW
        The Beaumont metro is located in East Texas off the Gulf of Mexico and
        is one of the nation’s largest petrochemical refining areas. It shares
        borders with the Houston metro to the west and the Lake Charles market
                                                                                                                     METRO HIGHLIGHTS
        in Louisiana to the east. The metro consists of the counties of Newton,
                                                                                                                     PORT ACTIVITY
        Hardin, Jefferson and Orange and contains 413,000 people. The cities of                                      The Port of Beaumont contributes to significant economic activity in the region.
        Beaumont, Port Arthur and Orange are known as the Golden Triangle.                                           It is one of the nation’s largest seaports based on tonnage.

        Beaumont is the most populous city with 119,500 residents, followed
                                                                                                                     INDUSTRIAL AND MANUFACTURING SECTORS
        Port Arthur with 55,500.                                                                                     Large industrial facilities in the area include the Exxon Mobil refinery and
                                                                                                                     chemical plants for Goodyear and DuPont.

                                                                                                                     CORPORATE HEADQUARTERS
                                                                                                                     Corporate headquarters represent a variety of industries and include
                                                                                                                     companies such as Jason’s Deli.

                                                                                                                     ECONOMY
                                                                                                    ▪      Energy-sector activities play a significant part in the metro’s economy. Companies represented in
                                                                                                           the area include Gulf Oil, Humble Oil, Magnolia Petroleum Co. and Exxon Mobil. The area is home to
                                                                                                           a large portion of the nation’s refining capacity.
                                                                                                    ▪      Aside from corporate headquarters and the energy industry, large employers represent diverse
                                                                                                           employment sectors and generate large staff counts. These include Conn’s, Lamar University,
                                                                                                           Christus St. Elizabeth Hospital and Memorial Baptist Hospital.
                                                                                                    ▪      The Sabine-Neches Waterway ranks among the top in the U.S. in terms of commercial military
                                                                                                           outload and is one of the nation’s largest waterway by cargo volume.

                                                                                                                                            DEMOGRAPHICS

                                                                                                             2017                          2017                          2017                          2017 MEDIAN
                                                                                                          POPULATION:                   HOUSEHOLDS:                   MEDIAN AGE:                   HOUSEHOLD INCOME:

                                                                                                         414K                               153K                       37.1                         $43,400
                                                                                                             Growth                           Growth                  U.S. Median:                     U.S. Median:
                                                                                                           2017-2022*:                      2017-2022*:
                                                                                                            0.7%                             2.2%                        37.8                          $56,300

* Forecast
Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

                                                                                                                                                                                                                      24
UT PHYSICIANS
    PLAZA                             DEMOGRAPHIC & MARKET OVERVIEW

        HOUSTON METRO AREA
  Post-Hurricane Recovery Boosts Retail
  Spending, Draws Investors

  Local residents rebuilding after floods, sales rise. Economic growth is returning to Houston as the metro
  emerges from the damage created by Hurricane Harvey and struggles stemming from the decline in energy
  prices in previous years. In 2018, job additions will rise, with local organizations creating more positions than
  the previous three years combined. Strengthening employment and recovery efforts related to the hurricane
  will provide an additional boost to retail consumption this year, and retail sales are expected to rise faster
  than the national pace. Local households replacing goods lost during the flooding will help lift spending,
  while residents temporarily relocating to assist with rebuilding efforts raise sales at restaurants, grocery
  stores and other needs-based retailers. As a result, retailers continue to expand in the metro this year, and
  grocers such as Kroger and H-E-B will open multiple locations on the west and north sides of Houston.
  Fitness centers, dollar stores, plus numerous restaurant and entertainment options will open this year,
  helping keep vacancy 60 basis points below the 10-year average.

  Development in West Houston attracts investors. The increasingly diverse propelled the Houston retail
  segment in recent years, keeping buyers interested in the local market. The metro is poised for an increase
  in trading volume this year, however, as staffing in the oil and gas industry has stabilized and new
  opportunities are presented in western submarkets. This side of the metro will receive an influx of new
  properties as development continues along the Grand Parkway. Grocery-anchored retail centers are in high
  demand, often trading in the mid-6 percent area. Meanwhile, strip-center assets with service-oriented
  tenants pique buyer interest, often changing hands in the low-7 percent span. Properties in West Houston
  submarkets such as Katy, Sugar Land out toward the Grand Parkway, and up to The Woodlands will draw
  strong buyer demand this year.

                                                                                                                      * Forecast
                                                                                                                      Sources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.

                                                                                                                                                                                  25
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    PLAZA                  DEMOGRAPHIC & MARKET OVERVIEW

        HOUSTON METRO AREA
  2018 Market Forecast

         NRI Rank        Higher vacancy than a large share of markets plus slow rent gains pull
30, down 4 places        Houston down four spots this year.

     Employment          Employers will create 75,000 positions in 2018 following the addition of
          up 2.5%        45,000 jobs in 2017.

     Construction        Delivery volume slows after the completion of nearly 5.6 million square feet
 2.9 million sq. ft.     in 2017. Sugar Land and Conroe each welcome more than 400,000 square
                         feet of new supply in 2018.

          Vacancy        Vacancy rises for a second year, reaching 6.0 percent in 2018 as 2 million
        up 20 bps        square feet of retail space is absorbed.

              Rent       The average asking rent advances to $17.12 per square foot, increasing for
          up 1.5%        a second consecutive year.

       Investment        Retail assets in heavily flooded areas of Houston could be value-add
                         targets this year. Owners in these locales may choose to dispose of
                         properties in lieu of renovating, while others may divest as some tenants are
                         unable to reopen stores.                                                        * Forecast
                                                                                                         Sources: Marcus & Millichap Research Services; CoStar Group, Inc.;
                                                                                                         Real Capital Analytics

                                                                                                                                                                     26
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      PLAZA
        www.dumesfalk.com

     EXCLUSIVELY LISTED BY:
  RYAN K. ROEDERSHEIMER
  Associate Director - National Retail Group
               Cincinnati Office
              Tel: (513) 878-7796
             Fax: (513) 878-7710
  ryan.roedersheimer@marcusmillichap.com
        Licenses: OH SAL.2015004880

          JOEL M. DUMES
      Senior Vice President Investments
    Senior Director - National Retail Group
               Cincinnati Office
              Tel: (513) 878-7720
             Fax: (513) 878-7710
      joel.dumes@marcusmillichap.com
  Licenses: OH SAL.2003013045, KY 63818

         STANTON R. FALK
      First Vice President Investments
    Senior Director - National Retail Group
               Cincinnati Office
              Tel: (513) 878-7721
             Fax: (513) 878-7710
     stanton.falk@marcusmillichap.com
       Licenses: OH SAL.2012001364

 Broker of Record: Timothy Speck
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