12603 - my.hfflp.com

1 2 6 0 3S O U T H W E S T F R E E W AYH O U S T O N , T E X A S | E X E C U T I V E S U M M A R Y

P R O P E R T Y S U M M A R Y

Property Address 12603SouthwestFreeway

Houston,TX77477

Building Size 143,211

Number of Stories SixFloors

Year Built/Renovated 1981/2014

Site Area 5.04Acres(220,000SF)

Parking 526spaces(3.6/1,000RSF)

% Leased 86.4%

In-Place NOI $1,456,000

HFF is pleased to offer for sale a fee simple interest in 12603 Southwest Freeway (the “Property”), a well maintained six story office building located on a 5.0 acre site at

the southwest corner of Interstate Highway 69 and South Kirkwood Road. The building’s prominent location along Interstate 69 provides outstanding visibility to

more than 224,000 cars daily and immediate access to Houston’s extensive transportation network via Sam Houston Parkway just to the north and Highway 90

and Highway 6 to the south. The Property is proximate to numerous existing and future amenities including the Fountains Shopping Center, several nearby

restaurants, hotels, master-planned neighborhoods and an under constriction, multi-phased, mixed-use development on the 192-acre former Texas

Indstruments campus located across Kirkwood enabling the Property to be the most walkable asset in the submarket.

12603 Southwest Freeway is currently 86.4% leased to a diversified rent roll of Education and Healthcare (25% of NRA), Manufacturing

and Construction (20%), Insurance (12%), Technology (10%) and Finance (9%) companies. Mark-to-market opportunities exist with in-

place rents approximately 11% below market and 64% of the rent roll expiring over the next five years. 12603 Southwest Freeway

presents investors a favorable balance of stable cash flow from a diversified tenant base coupled with income growth

upside from marking below-market rents to market and through the lease-up of vacant space.

L A N D M A R K A S S E T AT T H E G AT E WAY TO F O R T B E N D C O U N T Y

12603SouthwestFreewayispositionedinaprimelocationatthesouthwestcornerofInterstate69andKirkwood

Road.TheProperty’slocationprovidesexcellentregionalaccessviaSamHoustonParkwaytothenorthandHighway

90andHighway6tothesouthaswellasoutstandingvisibilityfromInterstate69;athoroughfarethatexperiences

over224,000carsdaily.ThePropertyiseasilyaccessiblefromtheKirkwoodRoadexitfromInterstate69withingress

andegressavailablealongKirkwoodRoadandInterstate69FrontageRoad.

TheProperty’svisibilitytoInterstate69coupledwithitsstrategiclocationappealstotenantsinStaffordaswellasthe

affluentresidentialneighborhoodsinFortBendsuchasFirstColony,Greatwood,Telfair,NewTerritory,Riverstone,

andAvalon.

A M E N I T Y R I C H E N V I R O N M E N T

The building is directly across Kirkwood Road from a multi-phased, mixed-use development currently under

construction.TheformerTexas Instruments’192-acresiteonthesoutheastcornerof Interstate69andKirkwood

Roadwillbebuilt-outoverfourphases.Uponcompletion,theprojectwillinclude2,400high-endmultifamilyunits,

18+nationallyrecognizedretailersandrestaurantpads,a350,000squarefootdistributioncenter,andalifestyle

centerfeaturinghotelsandentertainmentvenues.

InadditiontotheredevelopmentoftheformerTexasInstrumentssite,12603SouthwestFreewayispositionedinan

amenityrichenvironment.Withinaone-mileradiusthereareapproximately26restaurantsandbars,16hotels,an

AMCtheater,andseveralnationalretailerssuchasSam’sClub,Walmart,OldNavy,Bed,BathandBeyond,Hobby

Lobby,SteinMart,andOfficeMax.Theabundanceofexistingnearbyamenitiesandlocationacrossthestreetfrom

oneoftheregion’smostexciting,futuremixed-usedevelopmentswillprovide12603SouthwestFreewaytheability

toattractandretaintenantsaswellascontinuetoincreaserentalratesinthesubmarket’smostwalkableasset.

R O B U S T L E A S I N G A C T I V I T Y

TheownerpurchasedtheassetinJune2012whenitwasapproximately54%occupied.Sinceacquisition,ownership

experiencedtremendousleasingsuccessandsteadilyincreasedtheoccupancyrateto86.4%today.Over the past

three years, a total 103,000 square feet of leases were executed including 53,000 square feet of new activity and

50,000 square feet of renewal transactions. Strong leasing momentum continued in 2015 with 30,000 square feet

of lease transactions completed, including new leases executed with Wells Fargo, Vulcan Construction Material, and

Triton Aquatics.

Year New Activity Renewal Total2013 6,000 SF 17,000 SF 23,000 SF2014 28,000 SF 22,000 SF 50,000 SF2015 22,000 SF 13,000 SF 35,000 SF

TOTAL 56000 SF 52,000 SF 108,000 SF

C O N S T R U C T E D A N D M A I N TA I N E D TO T H E H I G H E S T S TA N D A R D S

Thesixstoryofficebuildinghasasteel-framedstructurewithpouredconcretefloorsandaflatmodifiedbitumen

roofsystemreplacedin2011.Additionally,thePropertyhasglazedexteriorcurtain-wallandhorizontalaccentbands

aroundtheperimeterof thebuilding.Thereare526 (3.6/1,000PSFparkingratio)parkingspacesavailable inan

adjacent2-levelgarageandasurfaceparkinglot.Thegarageisconnectedtothebuildingviaacoveredwalkway.

Over the past three years, during the current owner’s tenure, ownership invested over $1.5 million into the

Property. Theroofwasreplacedin2011,thecoolingtowerwasinstalledin2009,chillerswereinstalledin2005and

afull$375,000elevatormodernizationwascompletedatyear-end2015.Thebasebuildingupgradeshavesolidified

12603SouthwestFreewayasahighlymodernizedofficebuildingandwillsignificantlyreducetheneedforfuture

capitaloutlays.Please see the online data-room for a detailed report on historical capex.

I N V E S T M E N T H I G H L I G H T S

1 2 6 0 3S O U T H W E S T F R E E W AY

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U N M ATC H E D B U I L D I N G F E AT U R E S A N D A M E N I T I E S

12603Southwest Freewaybenefits tremendously fromseveral amenities

located in and around the Property. The building’s unique features and

amenitiesinclude:

•Ampleparking inacovered, two-storyparkinggaragewith526spaces

(3.6/1,000parkingratio)

• Cardkeyaccesssystem

• Exciting 192-acre potential mixed-use development located directly

acrossthestreet

• Visibletoover224,000carsdailyonInterstate69

• Immediateaccess to Interstate69andSamHoustonParkwayprovides

easyaccessibilitytoHouston’spremierresidentialneighborhoods

• CityPropertyTaxExemption–thecityofStaffordeliminateditsProperty

Taxin1995forresidentsandbusinesses

• $1.5MinCapexcompletedoverthepast3yearsincludingupdatedlobby,

coveredwalkwaybetweenthebuildingandthegarage,andafullelevator

modernization.

• Historically well maintained - roof replaced in 2011, new central plant

installedin2009,andchillersreplacedin2005

D I V E R S I F I E D R E N T R O L L

FortBendbenefitsfromadiversifiedmixofcompanieslocatedwithinits

boundariesspanningthefullspectrumofhealthcare/education(13%of

Countyemployment),government(14%),trade&utilities(20%),advanced

manufacturing(10%), informationtechnology(6%),andprofessionaland

businessservicefirms(11%).Additionally,therehavebeenseveralnationally

recognizedcompaniesthathaveexpandedwithinorrelocatedtoFortBend

Countyincluding:NALCOChampion(400jobs),UnitedHealthcare(800jobs),

FirstData(600jobs)andTexasInstruments(375jobs).Pleaseseepages5and

36foradditionalexamplesanddetailregardingmajorcorporaterelocations

andexpansionswithinFortBendCounty.

SimilartoFortBendCounty,12603SouthwestFreewaybenefitsfromadiverse

andbalancedtenantmix.Theprimarysectorsin-placeatthePropertyare

Education/Healthcare(26%ofnetrentablearea),Manufacturing/Construction

(20%),Insurance(12%),andTechnology(10%).FortBend’shistoryofattracting

premiercompaniescoupledwiththeProperty’sproventrackrecordof

attractingfirmsfromawide-arrayofbusinesssectorsbodeswellforthe

futureoftheasset.

H I G H E S T Q UA L I T Y A S S E T I N S TA F F O R D

There are four office buildings in Stafford that were all built between 1979

and 1982. The buildings range in size from 75,000 to 200,000 SF and

are on average 93.3% occupied. 12603SouthwestFreewayisthehighest

qualityandbestlocatedassetasevidencedbythesignificantrecentcapital

upgrades,visibilityfromInterstate69,andeaseofaccessibilitytoHouston’s

freewaysystem.

D I S C O U N T TO R E P L A C E M E N T C O S T

12603SouthwestFreewayofferstherareopportunitytoacquirehighquality

officeproductatasignificantdiscounttoreplacementcost,whichisestimated

tobe$250-$275persquarefoot.Eventheexitpricingforthisassetiswell

belowreplacementcost.Additionally,withtherecentcompletionoftheowner-

occupiedTexasInstrumentsfacilityinTelfair,thereisnonewconstruction

currentlyunderwayorscheduledwiththeexceptionofthreebuildtosuit

proposalsontheformerImperialSugarsite.Limitedsupplygrowthinthe

near-termcoupledwithdemandfromastrongcorporatebaseinFortBend

shouldallowrentalratestoescalateatahealthyrate.

Finance9%

Insurance12%

Legal8%

Technology10%

TENANT DIVERSITY PIE CHART

Manufacturing/Construction

20%

Education/Healthcare26%

Energy9%

BusinessServices6%

I N V E S T M E N T H I G H L I G H T S


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Texas Instruments375 Jobs (Relocation)Texas Instruments375 Jobs (Relocation)

First Colony$480k - $2.5M Home Value

First Colony$480k - $2.5M Home Value

Riverstone$630k - $2.5M Home Value

Riverstone$630k - $2.5M Home Value

Greatwood$325k - $1.1M Home Value

Greatwood$325k - $1.1M Home Value

New Territory$285k - $740k Home Value

New Territory$285k - $740k Home Value

Telfair$370k - $1.6M Home Value

Telfair$370k - $1.6M Home Value

Aliana$300k - $800k Home Value

Aliana$300k - $800k Home Value

Avalon$375k - $1M Home Value

Avalon$375k - $1M Home Value

United Healthcare - 800 New Jobs (Relocation)Money Management - 400 Jobs (Relocation)First Data - 600 Jobs (Relocation)

United Healthcare - 800 New Jobs (Relocation)Money Management - 400 Jobs (Relocation)First Data - 600 Jobs (Relocation)

OptumRXNoble EnergyOptumRXNoble Energy

Petronash (Expansion)Servomex (Expansion)Petronash (Expansion)Servomex (Expansion)

NALCO Champion400 Jobs (Relocation)NALCO Champion400 Jobs (Relocation)

Schlumberger 517 Jobs (HQ Relocation)$200 Million investment

Schlumberger 517 Jobs (HQ Relocation)$200 Million investment

Cosentino - 100 Jobs (Relocation)CVR Energy - 120 Jobs (Expansion)Cosentino - 100 Jobs (Relocation)CVR Energy - 120 Jobs (Expansion)

12603 Southwest Freeway

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FORT BEND MAJOR POPULATION BASE AND RECENT CORPORATE ACTIVITY

H F F 1 2 6 0 3S O U T H W E S T F R E E W AY


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WEST SAM HOUSTON PARKWAY SOUTHWEST SAM HOUSTON PARKWAY SOUTH

SOUTH KIRKWOOD ROAD

SOUTH KIRKWOOD ROAD

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THE GALLERIATHE GALLERIA GREENWAY PLAZAGREENWAY PLAZA CBDCBDTHE TEXAS MEDICAL CENTERTHE TEXAS MEDICAL CENTER

CROW HOLDINGS352,000 SF

CROW HOLDINGS352,000 SF

NATIONAL MULTI-FAMILY1,650 MULTI-FAMILY UNITSNATIONAL MULTI-FAMILY

1,650 MULTI-FAMILY UNITSNATIONAL MIXED-USE166 ACRES

RETAIL/RESTAURANTS/ENTERTAINMENT/HOTELS/OTHER

NATIONAL MIXED-USE166 ACRES

RETAIL/RESTAURANTS/ENTERTAINMENT/HOTELS/OTHER

FUTURE 192-ACRE MIXED USE “LIVE, WORK, PLAY” DEVELOPMENT(PHASE I 2016)


THE PROPERTY IS CONVENIENTLY POSITIONED DIRECTLY ACROSS THE STREET FROM A PROPOSED MULTI-PHASED, MIXED-USE DEVELOPMENT.

H F F 1 2 6 0 3S O U T H W E S T F R E E W AY


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S I T E P L A N

PARKING GARAGE

12603SOUTHWEST

FREE WAY

T E C H N I P L E X D R I V E

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P R O P E R T Y S U M M A R Y

Property Address 12603SouthwestFreeway

Houston,TX77477

Building Size 143,211

Number of Stories SixFloors

Year Built/Renovated 1981/2014

Site Area 5.04Acres(220,000SF)

Parking 526spaces(3.6/1,000RSF)

% Leased 86.4%

L O C A T I O N M A P S



P R O P E R T Y D E S C R I P T I O N

H F F

LakeHouston

San Jacinto

Bay

SheldonReservoir

GalvestonBay

BayportTerminal

Barbour’s CutTerminal

SmithersLake

ClearLake

George BushPark

LakeHouston

State Park

ArmandBayouPark

WilliamP. HobbyAirport

George BushIntercontinentalAirport

HARRISCOUNTY

LIBERTYCOUNTY

FORT BENDCOUNTY

MONTGOMERYCOUNTY

BRAZORIACOUNTY

GALVESTONCOUNTY

Downtown

EnergyCorridor

The Galleria

NASA

Westchase

Greenspoint

The Woodlands

TexasMedical Center

69

69

69

Westpark Tollway

Katy Frwy

Southwest F

rwy

Northwest Frwy

North Frwy

Hardy Toll Road

East

ex F

rwy

NorthLoop

LoopSouth

Wes

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East

Loo

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Sam Houston Tollway

Sam Houston Pkwy

ExxonMobilCorporate Headquarters

Pasadena Frwy

Baytown East Frwy

Sout

h Fr

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Fort

Pkwy

Gulf Frwy

Proposed

GrandPkwy

Proposed Grand Pkwy

Westheimer Rd

Beaumont Hwy

Ben

d

Grand Pkwy Under Construction (ETA 2016)


90

90

90 90

90

TEXAS99

TEXAS99

TEXAS6

TEXAS6

TEXAS6

TEXAS6

TEXAS6

TEXAS99

TEXAS99

TOLL ROAD

SAM H O U STO N

69

69

69

GRAND PKW

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GRAND PKW

Y

HA

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HA

RLEM RD

HA

RLEM RD

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RLEM RD

HARLEM

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W AIRPORT BLVDW AIRPORT BLVD

OB

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OB

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CLOD

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CLOD

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W BELLFORT STW BELLFORT ST

BISSONNET STBISSONNET ST

FARM TO M

ARKET 1464

FARM TO M

ARKET 1464

GRAND PKW

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GRAND PKW

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FARM

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MA

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RM T

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GRAN

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GRAN

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HOMEWARD WAY

NEW TERRITORY BLVDNEW TERRITORY BLVD

UNIVERSITY BLVD

UNIVERSITY BLVD

ELKINS

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ELKINS

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COMMONWEALTH BLVDCOMMONWEALTH BLVD

PALMROYALE BLVDPALMROYALE BLVD

SWEETWATER BLVDSWEETWATER BLVD

LEXINGTON BLV

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LEXINGTON BLV

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WILLIAM

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WILLIAM

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1ST COLO

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1ST COLO

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BRO

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MA

IN ST

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BURNEY RD

BURNEY RD

ADD

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WELL RD

ADD

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VOSS RDVOSS RDVOSS RDVOSS RD

OLD

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OLD RICHMOND RDOLD RICHMOND RD

W BELLFORT STW BELLFORT ST

BURN

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FLORENCE RDFLORENCE RD

BELKN

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ELKNAP RD

SYN

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NOT

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OLD RICHMOND RDOLD RICHMOND RD

ELDRID

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ELDRID

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W

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GH

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ELDRID

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REED RDREED RD

W BELLFORT AVEW BELLFORT AVE

S DAIRY ASHFORD RD

S DAIRY ASHFORD RD

COOK

RD

COOK

RD

KEEG

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WILCREST DR

WILCREST DR

W BELLFORT ST

W BELLFORT STS DAIRY ASHFO

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MULA RDMULA RDGREENBRIAR DRGREENBRIAR DR

CASH RDCASH RD

S MAIN ST

S MAIN ST

DULLES B

LVDD

ULLES BLVD

LEXINGTON BLVDLEXINGTON BLVD

SETT

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AUSTIN PKWYAUSTIN PKWY CO

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GLENN LAKES LNGLENN LAKES LN

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FARM

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CARTWRIGHT RDCARTWRIGHT RD

MU

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FARM TO MARKET RD 3345FARM TO MARKET RD 3345

PACKER LNPACKER LN

5TH ST

5TH ST

MU

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MU

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N MAIN STN MAIN ST

PIKE RD

PIKE RD

SOUTHWEST FWY

SOUTHWEST FWY

SOUTHWEST FWY

SOUTHWEST FWY

SOUTHWEST FW

Y

SOUTHWEST FW

Y

SAM HOUSTON TOLLWAY

SAM HOUSTON TOLLWAY

SOUT

HWES

T FWY

SOUT

HWES

T FWY

CullinanPark

CullinanPark

RiverbendCountry Club

RiverbendCountry Club

Ron SlockettPark

Ron SlockettPark

Sugar MillPublic ParkSugar Mill

Public Park

Fish LakeFish Lake

PumpkinLakes

PumpkinLakes

White LakeWhite Lake

GannowayLake

GannowayLake

Frost LakeFrost Lake

EldridgeLake

EldridgeLake

Alkire LakeAlkire Lake

HorseshoeLake

HorseshoeLake

Sugar LandSugar Land

SugarLand Rgnl

SugarLand Rgnl


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C O M P E T I T I V E P R O P E R T I E S

Address 12603 Southwest Freeway 10707 Corporate Drive 10701 Corporate Drive 4800 Sugar Grove Blvd

Class B+ B B B

Year Built (Renovated) 1981 (‘13-’15) 1979 1981 1982

Square Footage 143,211 75,490 110,394 123,570

Occupancy 86.4% 98.2% 96.5% 100.0%

# of Floors 6 Floors 2 Floors 3 Floors 6 Floors

Asking Rents $23.00/SF $19.50/SF $19.50/SF $22.00/SF

IH 69 | SOUTHWEST FREEWAY

IH 69 | SOUTHWEST FREEWAY

HIGHW

AY 90

HIGHW

AY 90


10707 Corporate Drive

10701 Corporate Drive

4800 Sugar Grove Blvd

9 Greenway Plaza, Suite 700

Houston, Texas 77046

Tel (713) 852-3500

Fax (713) 527-8725

hfflp.com

Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker (“HFF”).

©2015 HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national

capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.

HFF has been engaged by the owner of the property [properties] to market it [them] for sale. Information concerning the property [properties] described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness

of such information. Any and all references 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 buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

H. DAN MILLER, CCIM, SIOR

Senior Managing Director

Tel (713) 852-3576

[email protected]

MARTIN T. HOGAN

Director

Tel (713) 852-3557

[email protected]

JOHN INDELLI

Senior Real Estate Analyst

Tel (713) 852-3407

[email protected]

I N V E S T M E N T S A L E S

CAMERON CURETON

Director

Tel (713) 852-3531

[email protected]

F O R F I N A N C I N G I N Q U I R I E S

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THE FOUNTAINSSHOPPING CENTER

THE FOUNTAINSSHOPPING CENTER

PARADISE POINTPARADISE POINT

SUGAR CREEKSUGAR CREEK

FIRST COLONYFIRST COLONY SUGAR LAND MUNIPALAIRPORT

SUGAR LAND MUNIPALAIRPORT

SUGAR LAND BUSINESS PARKSUGAR LAND BUSINESS PARK

SUGAR LAND TOWN SQUARESUGAR LAND TOWN SQUARE

FIRST COLONY MALLFIRST COLONY MALL

SOUTH KIRKWOOD ROAD

SOUTH KIRKWOOD ROAD

HIGHWAY 6HIGHWAY 6

US 90US 90

S O U T H W E S T FA C I N G A E R I A L

12603 - my.hfflp.com

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