Offering Memorandum AVANCE Houston - LoopNet...in 1998, AVANCE Houston moved full steam ahead from...
Transcript of Offering Memorandum AVANCE Houston - LoopNet...in 1998, AVANCE Houston moved full steam ahead from...
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AVANCE Houston 2702 Aldine Westfield Road | Houston, TX 77093
Offering Memorandum
Subject Property
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AVANCE • Houston, TX 2
Stan Johnson Company10333 Richmond Ave | Suite 740 Houston, TX 77042 P: +1 832.476.3440 stanjohnsonco.com
Offered Exclusively by
Confidentiality and Restricted Use AgreementThis Confidential Offering Memorandum (“COM”) is provided by Stan Johnson Company (“SJC”), solely for your consideration of the opportunity to acquire the commercial property described herein (the “Property”). This COM may be used only as stated herein and shall not be used for any other purpose, or in any other manner, without prior written authorization and consent of SJC.
This COM does not constitute or pertain to an offer of a security or an offer of any investment contract. This COM contains descriptive materials, financial information and other data compiled by SJC for the convenience of parties who may be interested in the Property. Such information is not all inclusive and is not represented to include all information that may be material to an evaluation of the acquisition opportunity presented. SJC has not independently verified any of the information contained herein and makes no representations or warranties of any kind concerning the accuracy or completeness thereof. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. An interested party must conduct its own independent investigation and verification of any information the party deems material to consideration of the opportunity, or otherwise appropriate, without reliance upon SJC.
The Property may be financed or withdrawn from the market without notice, and its owner(s) reserve(s) the right to negotiate with any number of interested parties at any time. The Property is offered and sold by its owner(s) as is, where is, and with all faults, without representation or warranty of any kind except for any customary warranties of title.
BY ACCEPTING THIS COM, YOU AGREE THAT: (1) all information contained herein, and all other information you have received or may hereafter receive from SJC relating to the Property, whether oral, written or in any other form (collectively, the “Information”), is strictly confidential; (2) you will not copy or reproduce, and claim as your own without attribution to SJC, all or any part of this COM or the Information; (3) upon request by SJC at any time, you will return and/or certify your complete destruction of all copies of this COM and the Information; (4) for yourself and all your affiliates, officers, employees, representatives, agents and principals, you hereby release and agree to indemnify and hold harmless SJC all of its affiliates, officers, employees, representatives, agents and principals, from and with respect to any and all claims and liabilities arising from or related to the receipt or use of this COM and/or any other Information concerning the Property; (5) you will not provide this COM or any of the Information to any other party unless you first obtain such party’s acceptance and approval of all terms, conditions, limitations and agreements set forth herein, as being applicable to such party as well as to you; and (6) monetary damages alone will not be an adequate remedy for a violation of these terms and that SJC shall be entitled to equitable relief, including, but not limited to, injunctive relief and specific performance, in connection with such a violation and shall not be required to post a bond when obtaining such relief.
Albert Muller Associate [email protected] +1 832.457.8561
TX Lic# 459937
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About the InvestmentSection One
Subject Property
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AVANCE • Houston, TX 4
Demographics
0-1 mile 0-3 miles 0-5 miles
2018 Population 13,023 123,840 325,666
2018 Total Households 3,571 36,480 103,580
2018 Average HH Income $43,471 $47,053 $58,070
The OfferingStan Johnson Company, on behalf of ownership, is pleased to offer the opportunity to acquire a fee-simple building, 100% leased to AVANCE
Houston.
The ± 15,500 SF building is located in Houston, Texas in the “Northeast
Near” submarket area. AVANCE Houston is operating under a brand new
twelve (12) year lease featuring two and one-half percent (2.5%) rent
increases every thirty months or two and a half (2.5) years during the
lease term. AVANCE Houston is greatly benefiting from the tremendous
demographics (2018 population of 325,666+ within a 5-mile radius).
AVANCE was established in San Antonio in 1973, while the Houston
chapter began operations in 1988. AVANCE Houston conducted the
first early childhood education programs with parenting and toy-making
classes in a garage and provided home visits for Houston’s at-risk Hispanic
community. After receiving an RST grant from the Office of Head Start
in 1998, AVANCE Houston moved full steam ahead from that point by
expanding its service delivery model, target population, and community
service areas. AVANCE is now one of the leading providers of Early Head
Start and Head Start services in the Houston area.
For the past 30 years, AVANCE Houston has served over 100,000 families.
AVANCE Houston celebrated its 30th anniversary in 2018. The Houston
community continues to grow and expand and AVANCE is committed to
embracing this growth.
Offering Summary
Current NOI $213,900
Current Tenant AVANCE Houston
Property Type Freestanding Child Care Center
Property Summary
Location 2702 Aldine Westfield Road | Houston, TX 77093
Total Building Size (SF) ± 15,500
Lot Size (Acres) ± 1.29 Acres (approximately)
Base Lease Term/Remaining 12 Years / 11 Years
Rental Increases 2.5% Every 30 Months
Year Built 2007
Lease Type NNN Lease
Price: $3,000,000 Cap Rate: 7.00%
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AVANCE • Houston, TX 5
Investment HighlightsIdeal Business Model Location The Property is located in the Northeast Near Submarket of Houston. There are 103,000 households within a 5-mile radius. The demographics are an exact target fit for the business model.
New Long-Term LeaseThe Property is operating under a new twelve (12) year lease term. The lease observes two and one half percent (2.5%) rent increases every thirty (30) months or every two and one half (2.5) years throughout the term.
Minimal Landlord ResponsibilitiesThe landlord will benefit from the very passive NNN expense structure of the lease. Landlord is responsible for roof, foundation and walls.
US Department of Health and Human Services FundingAVANCE is part of the Federal Head Start, a program of the United States Department of Health and Human Services that provides comprehensive early childhood education, health, nutrition, and parent involvement services to low-income children and their families.
Budget and fundingThe 2011 federal budget for Head Start was $8.1 billion. 85% was to be devoted to direct services and no more than 15% on administration, serving approximately one million students. The 2018 funding for programs under the Head Start Act was nearly $9.9 billion, an increase of $610 million over the fiscal year (FY) 2017 funding level. Avance Houston received over $25 million in Federal funding in 2018.
Business Sustainability DemographicsLocated in one of the most dense population areas of Houston, the Property boasts ideal demographics that support the tenant’s business model; there is a population of 325,666 within a 5-mile radius, with ideal average household incomes and demographic cross-section.
Unique Property Attributes
325,666+Population within 5 miles
HEAD START LONG-TERM PROGRAM
Head Start is one of the longest-running programs attempting to
address the effects of systemic poverty in the United States by intervening to
aid children.
Rare NNN Lease
Families served by AVANCE Houston100,000+
households within 3-miles
103,580+
StrategicLocation
Visibility & Accessibility
34K+ VPDInterstate 69
13K+ VPDHardy Toll Rd
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AVANCE • Houston, TX 6Subject Property
Property OverviewSection Two
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AVANCE • Houston, TX 7
Lease AbstractTenant AVANCE Houston, Inc.
Property Address 2702 Aldine Westfield Road, Houston, TX 77093
Building Size (SF) ± 15,500 SF
Playground Size (SF) ± 5,000 SF
Lot Size (Acres) ± 1.29 AC
Building Use Childcare
Construction Steel & SIP frame, masonry exterior
Ownership Type Fee Simple
Lease Commencement 6/1/2018
Rent Commencement 6/1/2018
Lease Term 12 years
Expiration Date 5/31/2030
Term Remaining 11 Years
Annual Rent $213,900
Rent Increases See Schedule
Expenses NNN
Termination Option Only if Tenant has total loss of funding from the Federal Department of Health and Human Services
Miscellaneous Tenant is occupying 100% of the buildingSubject Property
Rent ScheduleMonths Annual Rent Rent/SF/YR Monthly Rent Escalation
5/31/18 - 11/30/20 $213,900 $13.80 $17,825 2.50%
12/1/20 - 5/31/23 $219,248 $14.15 $18,271 2.50%
6/1/23 - 11/30/25 $224,729 $14.50 $18,727 2.50%
12/1/25 - 5/31/27 $230,347 $14.86 $19,196 2.50%
6/1/27 - 5/31/30 $236,106 $15.23 $19,675 2.50%
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AVANCE • Houston, TX 8
Hardy Toll Rd (± 13,631 VPD)
Interstate 69(±34,436 VPD)
Interstate 45(± 56,890 VPD)
Shoreham Apartments
Roderick Paige Elementary Scarborough
Elementary
James Berry Elementary
Jens
en D
r
Inte
rsta
te 6
9 H
OV
Har
dy
Toll
Rd
Interstate 45
Burbank Middle School
Houston MSTC High School
Tidwell Rd
Burbank Elementary
KIPP Dream Prep
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AVANCE • Houston, TX 9
Tenant InformationSection Three
Subject Property
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AVANCE • Houston, TX 10
Tenant OverviewAVANCE is a non-profit organization that has been serving the needs of low-income families since its founding in Texas in 1973. They are dedicated to serving the hardest-to-reach population, and to empowering families with the skills and knowledge they need to break the cycle of poverty.
The company is a United Way Agency, and operates with the assistance of allocations from the United Way organization. Through federal funding, AVANCE is able to offer their Early Head Start, Head Start, Fatherhood, Healthy Marriage and Workforce programs. Private donations have allowed the company to provide the Parent-Child Education Program and Adult Education programs.
AVANCE works with families through a proven two-generation, family engagement approach that combines early childhood development and parenting education. The cornerstone of their programs is the Parent-Child Education Program (PCEP), a national model of early intervention that focuses on the welfare of children, families and the community, and that they are all mutually reinforcing.
AVANCE also offers programs that feature additional resources designed to fully prepare students to transition to college and to help adults prepare for the workforce.
AVANCE Overview
No. of Locations 20 Locations
Tenant Business Retail Education
Headquarters San Antonio, TX
Website https://www.AVANCEhouston.org/
Head Start
3,984
Adult Education
246
Parent-Child Education Program
198
Early Head Start/CCP
1,178
Healthy Marriage
716+
AVANCE QUICK FACTS
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AVANCE • Houston, TX 11
Child Care Industry OverviewCompetitive Landscape
The U.S. child care services industry includes about 54,000 commercial facilities with combined annual revenue of $21 billion, plus about 21,000 facilities run by nonprofit organizations with combined annual revenue of about $12 billion. The industry has experienced tremendous growth as more mothers enter the workforce, necessitating daily child care. In 2017, 65% of mothers with children under the age of 6 participated in the workforce in the U.S., according to the Bureau of Labor Statistics.
Demand is driven primarily by growth in the youth population, and secondarily by employment and income. Recognition of the importance of early education is also driving demand for high-quality care. The profitability of individual child care facilities depends on good marketing, reputation, and efficient operations, as well as how saturated the local market is. Large companies have economies of scale in advertising and administration. Smaller companies can compete effectively in local markets by owning convenient locations. Source: http://www.hoovers.com
• Recession Resistant | Industry-wide sales grew by over 6% between 2008 and 2012, in contrast to a national dip of 5% during 2009.
• Fragmented | The top 50 companies generate less than 20% of the income, with many small companies competing in the marketplace.
• Growing | Changing demographics, namely an increase in working mothers, is fueling fast, necessity-based growth in the industry.
• Secure | An increasing emphasis on early education, trends towards companies paying for their employees' child care, and increasing numbers of working mothers are causing the child care industry to flourish.
Subject Property
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Subject Property
Location OverviewSection Four
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AVANCE • Houston, TX 13
Downtown Houston, TX
Location OverviewHouston is a city in and the county seat of Harris County in the state of Texas. It is the most populous city in Texas and the fourth most populous city in the United States. As of 2014, the city had a population of 2,239,000, representing a 7.5% increase since 2000 and continuing a trend in population growth in
every decade since record-keeping began in 1850. Houston is the main component of the Houston-Woodlands-Sugar Land Metropolitan Statistical Area that
stretches across nine counties and includes a population of over six and a half million, making it the fifth most populated MSA in the country.
Relative to other major U.S. markets, Houston continues to display solid fundamentals with projected positive growth that outperforms the nation. The city
has one of the strongest economies in the country, derived from the city’s ability to retain its position as the center of the world’s energy industry, maintain
conservative construction levels, diversify its economic base and enjoy rising employment and continuous population growth. Offering an unsurpassed pro-
business environment, Houston is one of the least-expensive major cities to conduct business in and features a stable, yet dynamic economy.
Houston’s economy is rooted in a broad industrial base in sectors such as energy, manufacturing, healthcare, aeronautics, and transportation. It is the top U.S.
market for exports, recently passing New York City, and in 2012, the Houston-Woodlands-Sugar Land MSA GDP was $449 billion, the fourth largest of any
metropolitan area in the United States. In fact, only 26 other countries have a GDP exceeding that of the Houston metro area.
As of 2013, 24 Fortune 500 companies were headquartered in Houston. Only New York City can claim more with over 50. Some of these companies include
Phillips 66, ConocoPhillips, Enterprise Products Partners, Sysco, Plains All American Pipeline, Halliburton, Baker Hughes, National Oilwell Varco, Apache,
Marathon Oil and Waste Management, among others. Other major employers include Memorial Hermann Healthcare, Continental Airlines, the University of
Texas Anderson Cancer Center, ExxonMobil, Shell Oil, Kroger and The Methodist Hospital.
Houston is frequently awarded and recognized as the tremendous city it is. In 2012, the city was ranked #1 for paycheck worth by Forbes. Moreover, in 2013, it
was identified as America’s top city for employment creation, as well as designated by the U.S. Bureau of Statistics as the #1 city for job creation as it was not
only the first major city to regain all jobs lost during the economic downturn, but after the crash, more than two jobs were added for every one lost.
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AVANCE • Houston, TX 14
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DemographicsPopulation 1 mile 3 miles 5 miles
2018 Population 13,023 123,840 325,666
2023 Population 13,664 128,946 347,235
2010-2018 Annual Rate 1.01% 0.68% 0.81%
2018-2023 Annual Rate 0.97% 0.81% 1.29%
Households 1 mile 3 miles 5 miles
2018 Total Households 3,571 36,480 103,580
2023 Total Households 3,726 37,782 110,188
2010-2018 Annual Rate 0.87% 0.53% 0.75%
2018-2023 Annual Rate 0.85% 0.70% 1.24%
Household Income 1 mile 3 miles 5 miles
2018 Average Household Income $43,471 $47,053 $58,070
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AVANCE • Houston, TX 15
Property Photos
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AVANCE • Houston, TX 16
Aerial Photos
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AVANCE • Houston, TX 17
Interior Photos
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going beyond
The information contained herein was obtained from sources believed reliable, however, Stan Johnson Company makes no guaranties, warranties or representations as to the completeness thereof. The presentation of this property for sale, rent or exchange is submitted subject to errors, omissions, change of price or conditions, or withdrawal without notices.
Albert MullerAssociate Director [email protected] TX License #459937
Stan Johnson Company10333 Richmond Avenue | Suite 740Houston, Texas 77042 P: 832.476.3440
stanjohnsonco.com
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11-2-2015
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Information About Brokerage Services Texas law requires all real estate license holders to give the following information about
brokerage services to prospective buyers, tenants, sellers and landlords.
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Designated Broker of Firm License No. Email Phone
Licensed Supervisor of Sales Agent/Associate
License No. Email Phone
Licensed Broker /Broker Firm Name or Primary Assumed Business Name
License No. Email Phone
Regulated by the Texas Real Estate Commission Information available at www.trec.texas.gov IABS 1-0
Date Buyer/Tenant/Seller/Landlord Initials
Sales Agent/Associate’s Name License No. Email Phone
SJCO-Holdings, LLC 9003332 918-494-2690
James Gibson 392926 918-494-2690