LA FITNESSHOUSTON, TX

CORPORATE NET-LEASE LA FITNESS IN AFFLUENT HOUSTON SUB-MARKET

2

LA FITNESS

8.20%CAP

$11,021,000PRICE

6386 N ELDRIDGE PKWY, HOUSTON TX 77041

Infill location in densely populated northwest Houston neighborhood

Incomes within 1-mile radius near $120,000

Fitness center concept is internet-resistant and growing in popularity

Adjacent to Dril-Quip world headquarters (218-acre campus) and Toshiba’s Global Power Electronics HQ

Easily accessible from N Eldridge Parkway (35,000+ VPD)This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

LEASABLE SF42,061 SF

LEASE EXPIRATION02/29/2024

LEASE TYPECORPORATE NN

LAND AREA3.88 AC

YEAR BUILT2008

PARKING308 SPACES

3

Overview

THE OFFERING provides an investor with the opportunity to acquire a corporate LA Fitness property located in an affluent and densely populated Houston sub-market. LA Fitness is currently on a 15-year lease (6+ years remaining) that includes three 5-year extension options, with built-in rental escalations at the start of each option period. The Landlord benefits from minimal expense and management obligations, making this a highly passive investment. LA Fitness is a fitness club with over 690 locations across the United States.

Contact the team

THE U.S. GYM & FITNESS MARKET BRINGS IN APPROXIMATELY $31 BILLION ANNUALLY

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

THE SUBJECT PROPERTY is conveniently situated along an infill corridor of northwest Houston, and is surrounded by a complimentary mix of retail properties, as well as office, industrial and manufacturing campuses. Directly across the street is the Dril-Quip Inc. World Headquarters (leading manufacturer of offshore drilling and production equipment), which features 16 major buildings totaling 1,620,900 square feet of space. Additionally, Toshiba’s Global Power Electronics headquarters is just around the corner from the subject property, helping to further drive daytime traffic to the area. The Houston LA Fitness benefits from excellent demographics, including a population that exceeds 269,000 and an average household income that exceeds $96,000 within a 5-mile radius.

CHRIS KOSTANECKIck@capitalpacific.comPH: 415.274.2701CA BRE# 01002010

ZEB RIPPLEzripple@capitalpacific.comPH: 415.274.2702CA BRE# 01242540

CHRIS PETERScpeters@capitalpacific.comPH: 415.274.2703CA BRE# 01339983

JACK NAVARRAjnavarra@capitalpacific.comPH: 415.274.2705

CA BRE# 01909630

IN CONJUNCTION WITH TX LICENSED BROKER: Steve SielingAzur Commercial Capital, LLC214.888.8262

4

Investment Highlights

N ELDRIDGE PARKWAY

W L

ITTL

E YO

RK R

OA

DLEE ELEMENTARY

H&R BLOCK30,928

VPD

33,990 VPD

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

Zoomed-In Aerial

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WORLD HEADQUARTERS

GLOBAL POWER ELERTONICS

HEADQUARTERS

290

290

ELDRIDGE PARKWAY

CYPRESS CREEK

PARKWAY

W LITTLE

YORK ROAD

SPEN

CER

RO

AD

SPEN

CER

RO

AD

6

LEE ELEMENTARY

HAIRGROVE ELEMENTARY

CYPRESS RIDGE HIGH

SCHOOL

EMMOTT ELEMENTARY

BRENTWOOD CHILDREN ACADEMY

HEARTHSTONE COUNTRY

CLUB

JERSEY MEADOW GOLF

COURSE

HORNE ELEMENTARYTRUITT

MIDDLE SCHOOL

CYPRESS FAIRBANKS

MEDICAL CENTER

NORTH CYPRESS MEDICAL CENTER

CYPRESS FALLS HIGH

SCHOOL

OWENS ELEMENTARY

HOUSTON CITY

CENTER

33,990 VPD

35,220 VPD

40,530 VPD

164,340 VPD

143,000 VPD

30,928 VPD

50,980 VPD

Zoomed-Out Aerial

6This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies. 6

KrogerMcDonald’sWalgreensBank of TexasT-MobileDril-Quip IncJimmy John’s

Toshiba InternationalSubwayLittle Caesar’s PizzaBank of AmericaAuto ZoneSonic Drive-InNational Oilwell Varco

ValeroPumpd Nutrition & SmoothiesBurger KingMetroPCSRegions BankPhilips 66

BUSINESS SUMMARY

KEY 1-MILE 3-MILES 5-MILES

TOTAL 1-MILE 3-MILES 5-MILES

Businesses 356 3,736 9,169

Employees 6,684 56,925 137,000

Residential Population 9,711 89,348 269,416

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

Submarket Overview

RETAILERS IN CLOSE PROXIMITY INCLUDE:

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8

Subject Property

9

Surrounding Retail

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

PRICE $11,021,000 Price Per Square Foot: $262.02

Capitalization Rate: 8.20%

Total Rentable Area (SF): 42,061

Lot Size (AC): 3.88

STABILIZED INCOME PER SQUARE FOOTScheduled Rent $21.64 $910,054

Effective Gross Income $21.64 $910,054

LESS PER SQUARE FOOTTaxes NNN $0.00

Insurance NNN $0.00

Cap Ex Reserve ($0.15) ($6,309.15)

Total Operating Expenses ($0.15) ($6,309.15)

EQUALS NET OPERATING INCOME $903,745

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Income & Expense

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

TENANT INFO LEASE TERMS RENT SUMMARY

TENANT NAME SQ. FT. CURRENT RENT

MONTHLY RENT

YEARLYRENT

MONTHLY RENT/FT

YEARLYRENT/FT

L.A. Fitness 42,061 2/17/2009 2/28/2014 $65,625 $787,500 $1.56 $18.72

3/1/2014 2/28/2019 $70,547 $846,562 $1.68 $20.13

3/1/2019 2/29/2024 $910,054 $75,838 $910,054 $1.80 $21.64

Option 1 3/1/2024 2/28/2029 $81,526 $978,308 $1.94 $23.26

Option 2 3/1/2029 2/28/2034 $87,640 $1,051,681 $2.08 $25.00

Option 3 3/1/2034 2/28/2039 $94,213 $1,130,557 $2.24 $26.88

TOTALS: 42,061 $910,054 $75,838 $910,054 $1.80 $21.64

*Seller to credit Buyer the difference in rent from Close of Escrow through March 1, 2019

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Rent Roll

BASE RENT

DATE RANGE MONTHLY RENT ANNUAL RENT

2/17/2009 - 2/28/2014 $65,625 $787,5003/1/2014 - 2/28/2019 $70,547 $846,5623/1/2019 - 2/28/2024 $75,838 $910,054

OPTION RENTS

DATE RANGE MONTHLY RENT ANNUAL RENT

#1. 3/1/2024 - 2/28/2029 $81,526 $978,308#2. 3/1/2029 - 2/28/2034 $87,640 $1,051,681#3. 3/1/2034 - 2/28/2039 $94,213 $1,130,557

RENT

TENANT LA FitnessBUILDING SF 42,061 SFLEASE TYPE Corporate NNTERM 15 YearsEXPIRATION February 28, 2024OPTIONS Three 5-year options

PREMISE& TERM

TAXESTenant shall reimburse Landlord for the ad valorem taxes payable with respect to the Property.

UTILITIES

Tenant is responsible for the payment of all utility charges, and shall pay directly to the utility provider.

INSURANCETenant shall maintain the following insurance policies: (1) Standard “all risk” property insurance; (2) Commercial general liability insurance, naming Landlord as additional insured, with limits no less than $1 million per occurrence and $2 million in aggregate; (3) Products liability insurance; (4) Workers’ compensation coverage; (5) Contingent liability and builder’s risk insurance with respect to alterations and improvements; and (6) Rental value insurance for 12 months

Landlord shall maintain the following insurance policies: (1) “All-risk” insurance covering loss or damage to the common areas and Landlord’s personal property; (2) Combined single limit bodily injury and broad form property damage insurance with limits no less than $1 million per occurrence and $2 million in aggregate. Tenant reimburses Landlord for its insurance costs.

TENANT’S OBLIGATIONSTenant is responsible for the maintenance and repair of the nonstructural portions of the premises, including the HVAC system.

LANDLORD’S OBLIGATIONSLandlord is responsible for the maintenance and repair of the roof and structure, as well as the common areas.

CAMTenant shall reimburse Landlord for common area expenses.

ESTOPPELSWithin 10 business days after written request, the other party shall execute and deliver an estoppel.

EXPENSES

LEASEPROVISIONS

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

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Lease Abstract

N ELDRIDGE PARKWAY

W L

ITTL

E YO

RK R

OA

D

30,928 VPD

33,990 VPD

NOT A PART

LIQUOR & LIQUORS TIO CHUCOS VOGUE CLEANERS TERIYAKI HOUSE CHAMPION REAL ESTATE GROUP

CHINOIS ORIENT BISTRO DOLLAR CITY GLOBAL MAIL & PRINTING

13This site plan is a rendering that has been created based on sources we believe to be reliable. We make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

NATIONAL OILWELL VARCO

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Surrounding Retail Site Plan

LOCATIONS IN THE U.S. AND CANADA690+

LA Fitness International LLC is a privately owned American fitness club chain founded in 1984 and based in Irvine, California. The company is one of the fastest growing health clubs chains in the U.S. and, since its founding, has grown to millions of members and nearly 700 clubs across the U.S. and Canada.

LA Fitness is a multipurpose sports and fitness club featuring diverse state-of-the-art amenities, typically including cardio & strength equipment, personal training, indoor cycling, group exercise classes, pool, spa, basketball courts & racquetball. LA Fitness seeks to find innovative ways to create a diverse membership base with the goal of enhancing physical and emotional wellbeing for all through the widest range of amenities and the friendliest service at an affordable price.

ABOUT LA FITNESS

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

NUMBER OF EMPLOYEES 18,000

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Tenant Overview

POPULATION

1-MILE 3-MILES 5-MILES

2010 9,559 82,288 245,247

2017 9,711 89,348 269,416

2022 9,967 94,716 288,381

2017 HH INCOME

1-MILE 3-MILES 5-MILES

Average $119,336 $97,615 $96,289

Median $87,258 $70,861 $72,706

LA FITNESS

DOWNTOWN HOUSTON (20 MILES)

THE AVERAGE HOUSEHOLD INCOME WITHIN A 3-MILE RADIUS

IS OVER $97K

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

TOP EMPLOYERS - HOUSTON

EMPLOYER # OF EMPLOYEES

Walmart 37,000

Memorial Hermann Health System 24,108

H-E-B 23,732

University of Texas 21,086

Houston Methodist 20,000

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Demographics

HOUSTON is the fourth-largest city in the United States and the largest city within the state of Texas. The city has a population of about 2.3 million within an area of 656 square miles. Houston is home to two major airports, George Bush International Airport, one of the country’s busiest airports and international hubs, and William P. Hobby Airport. The Texas Medical Center, located in Houston, is the largest medical complex in the world, serving more than 10 million patients per year.Houston boasts more than 14 colleges and universities offering higher education options to more than 315,000 students enrolled in over 500 degree and certification programs in the city.The city has major profession league teams in almost every sport including: MLB - the Houston Astros, NBA - the Houston Rockets, NFL - the Houston Texans, MLS - the Houston Dynamo, and MLR - the Houston Sabercats.

Space Center Houston,

6.7 MILLIONHOUSTON MSA POPULATION (ESTIMATED)

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

DOWNTOWN HOUSTON

HOUSTON,TEXAS

HOUSTON’S economy has a broad industrial base in the energy, manufacturing, aeronautics, transportation, and health care sectors and is a leading center for building oil field equipment. Only New York City is home to more Fortune 500 headquarters in the city limits. It is home to many cultural institutions and exhibits—attracting more than 7 million visitors a year to the Houston Museum District and the Space Center Houston.

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Location Overview

We’d love to hearfrom you.

CAPITAL PACIFIC COLLABORATES. CLICK HERE TO MEET OUR SAN FRANCISCO TEAM:

CHRIS KOSTANECKIck@capitalpacific.comPH: 415.274.2701CA BRE# 01002010

ZEB RIPPLEzripple@capitalpacific.comPH: 415.274.2702CA BRE# 01242540

CHRIS PETERScpeters@capitalpacific.comPH: 415.274.2703CA BRE# 01339983

JACK NAVARRAjnavarra@capitalpacific.comPH: 415.274.2705

CA BRE# 01909630

This information has been secured from sources we believe to be reliable but we make no representations or warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for any inaccuracies.

IN CONJUNCTION WITH TX LICENSED BROKER: Steve SielingAzur Commercial Capital, LLC214.888.8262

JOE CACCAMOJOHN ANDREINI

ZANDY SMITH

DAVE LUCAS

RICK SANNER

CHRIS KOSTANECKIZEB RIPPLE CHRIS PETERS

JACK NAVARRA

Copyright © 2018 Capital Pacific Partners

SFO. PDX. SEA. CAPITALPACIFIC.COM

11-2-2015

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