Shopping Center - George Cushing

Transcription

C ONFIDENTIAL O FFERING M EMORANDUM
SOUTHWAY
Shop p ing Center
H OUSTON , T EXAS
George Cushing
Executive Vice President
713-599-5165
[email protected]
Wendy Vandeventer
Vice President
713-599-5194
[email protected]
Grubb & Ellis Company
1330 Post Oak Blvd.
Suite 1400
Houston, Texas 77056
www.grubb-ellis.com
SOUTHWAY
OF CONTENTS
TABLE
1
Content
Shopping Center
Page
1. Executive Summary..........................................................2
Fact Summary
Investment and Location Highlights
Annualized Operating Statement
Summary of Terms
2. Property Description.........................................................12
GLA Distribution and Site Description
Tenant Profiles
3. Financial Analysis ..............................................................19
Site Plan
Rent Roll and Notes to Rent Roll
Contractual and Option Rent Steps
Lease Expiration Schedule
As Is and Pro Forma Operating Statements
Argus Projections and Assumptions
Historical Operating Expenses
Existing Debt Summary
4. Market Area Overview .....................................................38
5. Appendix ..............................................................................42
Disclosures
This information has been secured from sources we believe to be reliable but we make no representations, warranties, expressed or implied, as to the accuracy of the information. Buyer must verify the information and bears all risk for inaccuracies.
1
EXECUTIVE SUMMARY
SOUTHWAY
Shopping Center
Fact Summary
Property Name:
Southway Shopping Center
Property Address:
8006 S. Gessner Drive
Location:
Northwest corner of US 59 and S. Gessner
Houston, Harris County, Texas
Key Map 530N
 13 miles southwest of downtown Houston
Land Area:
+15.66 acres
Total GLA:
+182,037 square feet
Years Built:
1976
Renovated 2002-2003
Major Tenants:
Marshalls ...........................................34,327 SF
Ross Dress for Less ..........................31,815 SF
Best Buy..............................................30,000 SF
National Tenants:
95%
Leased:
100%
Pricing:
Best offer
Actual NOI......................................$2,180,716
Pro Forma NOI ..............................$2,117,347
Assumable Financing:
6.2%; $13,865,000 loan balance
July 2014 maturity date
See complete Debt Summary page 37
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EXECUTIVE SUMMARY
SOUTHWAY
Shopping Center
3
EXECUTIVE SUMMARY
SOUTHWAY
Shopping Center
4
SOUTHWAY
EXECUTIVE SUMMARY
Shopping Center
Grubb & Ellis Company, as
exclusive
representative,
is
marketing the 100% fee simple
interest in Southway Shopping
Center, a community shopping
center located on the northwest
corner of US 59 and S. Gessner Road
in the Near Southwest sector of
Houston, Harris County, Texas. The
center is approximately 13 miles
southwest of downtown Houston.
Southway Shopping Center is a
single-level community center
containing 182,037 square feet of
lease space.
The center was
developed in 1976 and received
substantial improvements to the
physical structure between 2002
and 2005, coinciding with the
major
leasing
activity
that
facilitated the arrival of Factory 2-U,
Melrose Family Fashions and Shoe
Carnival. Since the opening of the
highly-successful Marshalls in the
center in 2006, Anna’s Linens and
Ashley Stewart were added to the
tenant lineup as well as Best Buy
relocating from across the street in
2007.
Recently a ground lease
with McDonald’s was executed
with construction to begin late
2010. Southway Shopping Center
is 100% leased.
Investment Highlights
PRIME LOCATION
Southway Shopping Center is
located at the northwest corner of the signalized
intersection of the Southwest Freeway (US 59) and
South Gessner in the Near Southwest Houston
Submarket. The Southwest Freeway is one of the
principal radiating freeways extending from the CBD
to the suburban areas of Southwest Houston.
STRONG NATIONAL TENANTS The center is 100%
leased with a very strong lineup of national tenants,
many top performers for the sales region. Anchored
by Marshalls, Ross Dress for Less and Best Buy, the
center is leased to over 95% national tenants. Other
major tenants over 10,000 square feet include Factory
2-U, Melrose Family Fashions and Shoe Carnival.
STRONG DAYTIME TRAFFIC with proximity to major
thoroughfares and employment centers, Southway
Shopping Center captures a large share of daytime
restaurant and retail trade with excellent street and
highway visibility driving customers to the center.
Traffic counts on US 59 exceed 268,000 cars per day.
DENSELY POPULATED TRADE AREA
Southway
Shopping Center’s residential market, already well
established surrounding the center, is predicted to
grow by over 8% in the one-mile radius over the next
five years. The growth over the previous decade
exceeded 14% in the three-mile radius with a
population of over 253,000 people. Within a threemile radius of Southway Shopping Center are more
than a dozen major residential developments
including Bellaire, Meyerland, Sharpstown, Braeburn
Village and Sharpstown Country Club Terrace. Also in
close proximity to Southway Shopping Center are HBU
(Houston Baptist University), with a 100-acre campus
located at US 59 and Fondren, and Memorial Hermann
Southwest Hospital, the only Houston area hospital
placing in the top 1% of hospitals in the nation as one
of America’s 50 Best Award.
Memorial Hermann
Southwest located at US 59 and Beechnut opened in
1977.
5
SOUTHWAY
EXECUTIVE SUMMARY
Southway Shopping Center has a prominent lineup of national retailers with
over 95% of the center’s total GLA leased to national tenants. The center’s 22
lease spaces (including a to-be-built pad building leased to McDonald’s), are
highly visible from the center’s frontage roads; South Gessner and US 59, as
well as Beechnut Drive. The prominent intersection location, appearance and
maintenance of the center, along with favorable site configuration, make the
center a dominant presence in the immediate trade area.
Location and Access
Southway Shopping Center located on the busy Southwest Freeway corridor in
the City of Houston’s near southwest sector, is two miles north of Houston’s
outer loop, Beltway 8, and four miles south of the intersection of Southwest
Freeway (US 59) and the 610 Loop (inner loop). The center occupies the block of
South Gessner from the Southwest Freeway to Beechnut. South Gessner and
Beechnut are primary residential and commercial thoroughfares west of the
Southwest Freeway and the South Gessner/Beechnut corner provides a second
signalized intersection benefiting the center.
The Southwest Freeway is one of the principal radiating freeways extending
from the CBD to the suburban areas of southwest Houston. The Southwest
Freeway, traditionally a regional retail corridor, affords retailers exposure to a
large regional shopping audience. Principal intersecting retail roads are
Bissonnet, South Gessner, Beechnut Drive, Fondren Road, Bellaire Boulevard and
Hillcroft Avenue. The surrounding neighborhoods are delineated by the
significant retail and commercial development clustered along the access roads
of the Southwest Freeway.
Shopping Center
National Tenant Lineup
Marshalls
Ross Dress for Less
Best Buy
Factory 2-U
Melrose Family Fashions
Shoe Carnival
Anna’s Linens
Ashley Stewart
CiCi’s Pizza
Rent-A-Center
Chase Bank
McDonald’s
Sally Beauty Supply
Nationwide
H&R Block
Advance America
Baskin-Robbins
Total National Tenants – 95%
Total Other Tenants
Total Leased – 100%
Total Vacant
Total Center GLA
SF @
Southway SC
34,327
31,815
30,000
18,000
12,680
11,970
8,933
4,776
4,000
3,690
3,396
3,250
1,689
1,540
1,500
1,300
1,275
174,141
7,896
182,037
0
182,037
Total #
of Locations
800
1,400
953
200
90
305
264
200
650
3,000
5,100
32,000
2,700
$15B equity
11,500
2,600
6,000
Sharpstown
Southway is located within the greater Sharpstown area, a densely populated close-in residential and commercial district. Sharpstown, once the largest
subdivision in the United States, is located 10 miles from downtown Houston and 6 miles from Houston’s second largest concentration of office buildings,
the Galleria District, offering a unique combination of mobility, and convenience. With dense, mature residential areas comprised of over 8,000 homes, and
a large volume of retail centers and office buildings, the Sharpstown district appeals to a broad spectrum of businesses, organizations and individuals
seeking a cost effective alternative to suburban and downtown sites. A key advantage of the Sharpstown location is excellent access to the Southwest
Freeway, the Sam Houston Tollway (Beltway 8) and the Westpark Tollway. Sharpstown offers easy access to major employment and entertainment centers
including the Galleria, Greenway Plaza, the Texas Medical Center, and Downtown Houston.
6
SOUTHWAY
EXECUTIVE SUMMARY
Shopping Center
Area Demographics
Traffic Counts
Location
Cars per Day
US 59 west of Gessner
267,000
US 59 east of Gessner
268,000
Gessner north of US 59*
31,150
Gessner south of US 59*
31,110
Source:
TX DOT 2008 Average Daily Traffic Counts
*2006 24-Hour Traffic Counts
Demographics
2015 Projected Population
2010 Estimated Population
Projected Growth 2010-2015
Growth 2000-2010
2010 Est. Avg. Family HH Income
2010 Est. Median Housing Value
1-Mile
Radius
3-Mile
Radius
5-Mile
Radius
27,735
25,584
8.41%
15.20%
$52,096
$118,958
274,096
253,317
8.20%
14.47%
$47,031
$115,874
652,134
601,405
8.44%
15.20%
$62,431
$135,448
Source: © 2010 Claritas Inc.
Directions to Southway Shopping Center
From Houston Hobby Airport:
Take I-45 North to Highway 288 South. Merge onto US 59 South toward
Victoria. Take the Beechnut St/S. Gessner exit to the right. The property
is on the left.
From Bush Intercontinental Airport:
Take John F. Kennedy Blvd. to exit the airport. Take the Beltway West for
approximately 25 miles until you reach the Beechnut Street exit. Make
a left and the property is on the right.
7
EXECUTIVE SUMMARY
SOUTHWAY
Shopping Center
8
SOUTHWAY
EXECUTIVE SUMMARY
Shopping Center
Annualized Operating Statement
Investment Opportunity
as of October 1, 2010
As Is
Income
Pro Forma
Income
Revenue
Minimum Rent
Reimbursements
Add: Percentage Rent
Add: Sign Rent
Less: General Vacancy
Effective Revenue
$2,279,495
648,945
2,369
600
-0
$2,931,409
$2,279,495
648,929
2,369
600
-65,313
$2,866,080
$247,000
316,445
72,000
87,942
$723,387
$247,000
316,445
72,000
85,982
$721,427
(5% excluding Majors)*
Reimbursable Operating Expenses
CAM
Property Tax
Insurance
Management Fee 3%
Total Reimbursable Operating Expenses
Non-Reimbursable Operating Expenses
Capital Reserve $0.15/sf
Total Non-Reimbursable Operating Expenses
Total Expenses
Net Operating Income
Debt Service
Net Cash Flow
$27,306
$27,306
$27,306
$27,306
$750,693
$748,733
$2,180,716
$2,117,347
-1,087,745
-1,087,745
$1,092,971
$1,029,603

Southway is positioned at a landmark location at
the US 59/S. Gessner intersection along the
Southwest Freeway regional retail corridor in Near
Southwest Houston, minutes from the Galleria,
Greenway Plaza and Downtown Houston

Frontage on three high-traffic thoroughfares with
direct access to US 59 feeder road

Extremely dense residential concentrations with
over 253,000 people within a 3-mile radius,
601,000 people within a 5-mile radius

Southway has undergone extensive long-term
capital improvements that will provide an
extended useful life of the center’s physical plant
to the buyer

Excellent physical design paralleling South
Gessner, great tenant visibility and attractive
appearance of center

Exceptional tenant mix comprised of 95% national
credit tenants that as a group are some of the
strongest operators within their categories.
Several of the center’s retailers are at or near the
top company performers in the Houston market

Assumable Financing: 6.2%; $13,865,000 loan
balance; July 2014 maturity date
*Majors include Marshalls, Ross, Best Buy, Chase Bank and McDonald’s
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EXECUTIVE SUMMARY
SOUTHWAY
Shopping Center
Location Map
10
SOUTHWAY
EXECUTIVE SUMMARY
Shopping Center
Summary of Terms
Interest Offered
100% fee simple interest in Southway Shopping Center, a 182,037-square foot shopping center totaling
15.66 acres.
Offering Price
Best offer
Offer Submission
Offers should be submitted in the form of a non-binding Letter of Intent, detailing the significant terms
and conditions of the Purchaser’s offer including but not limited to:





Pricing
Due diligence and closing time frames
Earnest Money Deposit
A description of the debt/equity structure of the transaction
Purchaser’s Resume
Please direct all inquiries to
George Cushing
Executive Vice President
Investment Group
1330 Post Oak Blvd., Suite 1400
713.599.5165 phone
713.626.2288 fax
[email protected]
www.georgecushing.com
Wendy Vandeventer
Vice President
Investment Group
1330 Post Oak Blvd., Suite 1400
713.599.5194 phone
713.626.2288 fax
[email protected]
11
SOUTHWAY
PROPERTY DESCRIPTION
Shopping Center
GLA Distribution
Tenant
Rental
Rate
SF
Majors
Marshalls*
Ross Dress for Less*
Best Buy*
Inline
Factory 2-U*
Melrose Family Fashions*
Shoe Carnival*
Anna’s Linens*
Ashley Stewart
CiCi’s Pizza*
Rent-A-Center*
Sally Beauty Supply*
Nationwide
H&R Block*
Advance America*
Baskin-Robbins*
FJ Florist
Ronnie’s Trophy Bowling
LA Nails
Pads
Chase Bank*
McDonald’s (to be built)*
Ruchi’s Taqueria*
Loan Star Title Loans*
Total Leased (100%)
Total Vacancy (0%)
Total GLA
Site Description
Expiration
34,327
31,815
30,000
$9.25
$10.20
$16.00
04/30/16
01/13/14
01/31/18
18,000
12,680
11,970
8,933
4,776
4,000
3,690
1,689
1,540
1,500
1,300
1,275
1,215
1,215
1,340
$8.50
$8.00
$10.03
$12.00
$18.50
$17.00
$14.20
$18.17
$11.69
$20.00
$16.50
$18.00
$14.20
$14.50
$12.65
02/29/16
12/31/16
11/30/13
09/30/14
05/31/17
02/28/20
02/28/12
09/30/13
12/31/15
04/30/13
06/30/13
02/28/11
05/31/11
06/30/11
09/30/12
3,396
3,250
2,990
1,136
$24.59
$20.00
$23.50
$46.80
01/31/12
12/31/31
10/31/13
04/11/15
182,037
0
182,037
Site
Southway Shopping Center is situated on 15.66 acres.
Access
Southway Shopping Center has 10 access drives distributed
across the center’s three roadways: South Gessner, the US 59
feeder road and Beechnut, many aligned with esplanade cuts.
Access to the center is enhanced by signalized intersections at
both the Gessner and the US 59 feeder road and the Gessner
and Beechnut intersections.
Parking
1,050 Parking spaces; 5.75 spaces per 1,000 SF of GLA
Tax ID
106-807-000-0001
Taxes
Taxing
Jurisdictions
Houston ISD
Harris County
Harris County Flood Dist
Port of Houston Authority
Harris County Hosp District
Harris County Dept. of Education
Houston Community College
City of Houston
Sharpstown PID
Greater Sharpstown Mgt. Dist.
Southwest Houston Area Tirz
1.156700
0.392240
0.029220
0.016360
0.192160
0.006050
0.092220
0.638750
0.000000
0.060000
0.000000
Total
2.583700
Source:
* Has renewal options
2009
Rate
Harris County Appraisal District
Houston ISD Tax Office
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Shopping Center
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Shopping Center
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Shopping Center
Tenant Profiles
The TJX Companies, Inc. (NYSE: TJX) operates eight retail chains, including two of the largest off-price retail clothing
retailers in the US, T.J. Maxx and Marshalls. Marshalls sells brand-name family apparel, accessories, shoes, domestics,
giftware and jewelry at discount prices at some 800+ stores nationwide. With over $20 billion in revenues in 2009,
more than 2,700 stores in six countries and approximately 154,000 associates, the company sees themselves as a
global, off-price value retailer. www.marshallsonline.com
With operations in the United States, Canada, Europe, China and Mexico, Best Buy (NYSE: BBY) is a multinational retailer
of technology and entertainment products and services with a commitment to growth and innovation. The company
operates more than 1,400 stores throughout the US and Canada, and another 2,600 stores in Europe, China and Turkey.
The stores sell a wide variety of electronic gadgets, movies, music, computers and appliances. In addition to selling
products, Best Buy offers installation and maintenance services, technical support and subscriptions for cell phone and
Internet services. The Best Buy family of brands and partnerships collectively generates more than $45 billion in annual
revenue. www.bestbuy.com
Ross Stores, Inc,. an S&P 500, Fortune 500 and Nasdaq 100 (ROST) company headquartered in Pleasanton, California, is
the nation’s second largest off-price retailer with fiscal 2009 revenues of $7.2 billion. As of January 2010, the company
operated 953 Ross Dress for Less stores in 27 states and Guam. Ross offers first-quality, in-season, name brand and
designer apparel, accessories, footwear and home fashions for the entire family at everyday savings of 20% to 60% off
department and specialty store prices. www.rossstores.com
Factory 2-U, Fallas Discount Stores, Fallas Paredes, and Fallas Kids are store divisions of National Stores, Inc. They are a
family-owned, family-oriented company that was established in 1962 and grew from a single store in downtown Los
Angeles to more than 200 locations in California, Texas, Arizona, New Mexico and Nevada. The stores offer a big
selection of quality brand name and private label clothing for men, ladies, boys, girls, juniors, infants and toddlers along
with shoes and home décor. www.factory2-u.com
United Fashions of Texas, L.L.C. doing business as Melrose Stores, operates a chain of fashion stores in the US. Melrose
began in 1976 with one store in McAllen, Texas. Now, over thirty years later, they have 90+ stores throughout Texas,
New Mexico, Arizona and California. Additional store openings are planned. The successful growth stems from a
simple concept of offering customers quality fashion merchandise at a great price. Melrose has recently added men’s,
girl’s and boy’s fashion to select locations. Current estimates show this company has annual revenue of $5-10 million.
www.melrosestore.net
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SOUTHWAY
Shopping Center
Tenant Profiles continued
Shoe Carnival, Inc. (NASDAQ: SCVL) operates about 305 family footwear stores in some 30 US states, featuring bright
lights and neon signs. Contests, game and up=tempo music produce an energized shopping atmosphere The
combination of a unique shopping environment in a large store format, value pricing, low cost structure and advanced
information systems distinguishes Shoe Carnival from its competitors. Shoe Carnival sells brand-name and privatelabel men’s, women’s, children’s, and athletic footwear. 2009 sales increased 5.4% to $682.4 million.
www.shoecarnival.com
Anna’s Linens, headquartered in Costa Mesa, California, was founded in 1988 by its current president and CEO. The
company was named after his mother. Anna’s is the value leader in fashions for the home, selling discounted home
furnishings, including bed linens, kitchen textiles, area rugs, window coverings, bath accessories, and housewares.
Anna’s currently operates over 264 stores in 18 states. www.annaslinens.com
Since the early 1990’s, Ashley Stewart has been styling customers and setting fashion trends for the plus-size fashion
industry. With over 200 stores located in urban areas from New York to Los Angeles, Ashley Stewart is looking to
expand the number of stores within the United States. The Ashley Stewart brand is an eclectic mix. It is fashionforward and provides the customer with head-to-toe outfits from trendy sportswear to outerwear. Fashion conscious
plus-size urban women shop at Ashley Stewart to find the latest fashions that reflect their inner confidence.
www.ashleystewart.com
CiCi’s Pizza is an American buffet restaurant chain that was founded in 1985 in Plano, Texas. CiCi’s serves an all-youcan-eat, affordably priced buffet featuring pizza, pasta, salad and dessert in an approximately 4,000 square foot
restaurant. CiCi’s restaurants are currently operating in 35 states with about 650 locations. The company continues
to find record-breaking success as it expands to new franchise markets. In July 2010, they signed deals for 8 new
restaurant openings and will open 7 more by the end of September. Sales have remained well above per-unit average.
www.cicispizza.com
Rent-A-Center (NASDAQ: RCII) became the #1 rent-to-own chain nationwide through a slew of acquisitions. It owns
and operates about 3,000 stores throughout North America and Puerto Rico under the Rent-A-Center, Get It Now, and
Home Choice names, and franchises some 204 through subsidiary ColorTyme. The stores rent brand name home
electronics, furniture, accessories, appliances, and computers. While customers have the option to eventually own
their rented items, only about 25% ever do. RAC also offers financial services, including loans, check cashing and
money transfer services, and tax preparation to its customers in some 350 stores. 2009 sales were reported at $2.7
billon. www.rentacenter.com
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SOUTHWAY
Shopping Center
JPMorgan Chase (NYSE: JPM) is one of the largest financial services firms in the US, with more than 5,100 bank branches
in some two dozen states (and counting). The company is also among the nation’s top mortgage lenders and credit
card issuers. Delivering extensive industry knowledge, local expertise and dedicated service, commercial banking
partners with the firm’s other businesses to provide comprehensive solutions including lending, treasury services,
investment banking and asset management. Chase Bank increased revenue by 20% in 2009 to a record $5.7 billion. The
bank serves nearly 25,000 clients in 26 states across the country. www.jpmorganchase.com
McDonald’s Corporation (NYSE: MCD) is one of the world’s largest chain of hamburger fast food restaurants, serving
nearly 60 million customers daily. A McDonald’s restaurant is operated by either a franchisee, an affiliate, or the
corporation itself. McDonald’s primarily sells hamburgers, chicken products, French fries, breakfast items, soft drinks,
shakes and desserts. McDonald’s restaurants are found in 117 countries around the world with more than 32,000
locations. 2009 revenue is reported at $22.7 billion. www.mcdonalds.com
Sally Beauty Holdings, Inc. (NYSE: SBH) is the world’s largest retailer of professional beauty supplies. More than 2,700
Sally Beauty Supply stores sell more than 6,000 hair, skin and nail products to retail customers and salon professionals.
Sally also sells its products on line. Sally Beauty Supply was founded in New Orleans in 1964. Revenues are reported at
more than $2.5 billion annually. www.sallybeauty.com
Nationwide Financial Services, Inc. is a private, wholly-owned subsidiary of Nationwide Mutual Insurance Company.
Nationwide provides a variety of financial services that help consumers invest and protect their long-term assets, and
offers retirement plans and services through both public- and private-sector employers. In the last 80 years, Nationwide
has gone from a small auto insurer to one of the largest insurance and financial services companies in the world with
over $161 billion in statutory assets. Nationwide ended 2009 with $15.1 billion in policyholders’ equity, significantly
above the 2008 level. Nationwide’s capital remained substantially in excess of levels required to be maintained by
regulators and continues to support strong ratings from independent rating agencies. www.nationwide.com
H&R Block (NYSE: HRB) is the world’s largest tax return preparers. It has approximately 11,500 retail locations in the US
(many of which are franchised). It has another 1,600 locations in Canada and Australia and serves approximately 23
million tax customers in all. In addition to retail stores, they offer their own consumer tax software called H&R Block at
Home, as well as online tax preparation and electronic filing from their website. Brothers Henry W. Bloch and Richard A.
Bloch founded the company in 1955 and grew the business to become a brand and franchising icon. 2009 revenue was
reported at $4.1 billion. www.hrblock.com
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SOUTHWAY
Shopping Center
Advance America, Cash Advance Centers, Inc. (NYSE: AEA) is the largest provider of payday case advance services in the
United States, as measured by the number of payday cash advance centers operated. They operate approximately
2,600 payday cash advance centers and 71 limited licensees in 32 states, the United Kingdom and Canada. Payday cash
advances are small-denomination, unsecured advances that are typically due on the customer’s next payday. 2009 sales
were reported at $64 million. www.advanceamerica.net
Dunkin Brands is a leading multi-concept quick service franchisor that operates both the Dunkin’ Donuts and BaskinRobbins chains. Baskin-Robbins, known for its “31 flavors” slogan, is the world’s largest chain of ice cream specialty
shops, It was founded by Burt Baskin and Irvine Robbins in 1953 in Glendale, California, whose passion led to the
creation of more than 1,000 ice cream flavors and a wide variety of delicious treats. The company has more than 6,000
locations in 35 countries, 2,800 of which are located in the US. Baskin-Robbins creates and markets innovative,
premium ice cream, specialty frozen desserts and beverages, providing quality and value to consumers. Total global
system-wide sales are reported at $6.9 billion for year-end 2008. www.baskinrobbins.com
18
FINANCIAL ANALYSIS
SOUTHWAY
Shopping Center
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SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Rent Roll
TENANT NAME
LEASE
SQ. FT START
LEASE
EXPIRE
RENEWAL
OPTIONS
MAJORS
Marshalls
34,327 04/01/06 04/30/16 1 - 5 Yrs @ $10.00
MINIMUM RENT
TOTAL
$/SF
CAM
ADD-ON1
CAM2
$/SF
TAX2
$/SF
INS2
$/SF PYLON
%
% RENT
BRKPT
RENT STEPS
DATE
$/SF
$317,525
$9.25
P+Cap
$45,644
1.33
$60,757
1.77
$13,824
0.40
2.00% $9,072,135 05/01/11
$324,513
$10.20
P
$46,570
1.46
$56,311
1.77
$12,812
0.40
2.00%
$480,000
$16.00
P+5%+Cap
$39,570
1.32
$53,099
1.77
$12,081
0.40
$9.50
1 - 5 Yrs @ $10.50
1 - 5 Yrs @ $11.00
1 - 5 Yrs @ $11.50
Ross Dress for Less
31,815 11/01/92 01/31/14 1 - 5 Yrs @ $10.69
Natural
1 - 5 Yrs @ $11.18
1 - 5 Yrs @ $11.67
1 - 5 Yrs @ $12.16
Best Buy
30,000 10/01/07 01/31/18 1 - 5 Yrs @ $17.00
01/01/13
$16.50
4.00%
Natural 01/01/11
$8.25
1 - 5 Yrs @ $18.00
1 - 5 Yrs @ $19.00
1 - 5 Yrs @ $20.00
TOTAL MAJORS
96,142
INLINE
Factory 2-U
18,000 12/01/01 02/28/11
1 - 5 Yrs @ $9.86
1 - 5 Yrs @ Mkt
$153,000
$8.50
P+10%+Cap
$24,917
1.38
$31,860
1.77
$7,248
0.40
12,680 10/01/01 12/31/16
1 - 5 Yrs @ $9.00
1 - 5 Yrs @ $10.00
1 - 5 Yrs @ $11.00
1 - 5 Yrs @ $12.00
$101,440
$8.00
P+15%+Cap
$21,489
1.69
$22,443
1.77
$5,106
0.40
8,933 09/24/09 09/30/14 1 - 5 Yrs @ $13.00
$107,196
$12.00
P+10%+Cap
$12,961
1.45
$15,811
1.77
$3,597
0.40
$120,000
$10.03
P+15%
$17,849
1.49
$21,186
1.77
$4,820
0.40
3.00%
Natural
4.00%
$862,500
Anna's Linens
$1,122,038
$131,784
$170,167
$38,717
$0
1 - 5 Yrs @ $14.00
1 - 5 Yrs @ $15.00
Shoe Carnival
11,970 11/01/03 11/30/13 1 - 5 Yrs @ $11.00
1 - 5 Yrs @ $12.00
Sally Beauty Supply
H&R Block
Ashley Stewart
Baskin Robbins
LA Nails
Nationwide Insurance
FJ Florist
Ronnie's Trophy Bowling
Advance America
1,689
1,500
4,776
1,275
1,340
1,540
1,215
1,215
1,300
10/01/91
12/01/08
06/01/07
02/01/07
05/01/90
07/01/00
10/01/93
07/01/03
07/01/03
09/30/13 1 - 5 Yrs @ $20.90
1 - 5 Yrs @ Mkt
04/30/13
05/31/17
1 - 5 Yrs @ Mkt
02/28/11
09/30/12
12/31/15
05/31/11 1 - 5 Yrs @ $15.20
06/30/11
1 - 3 Yrs @
06/30/13
$30,689
$30,000
$88,356
$22,950
$16,951
$18,003
$17,253
$17,618
$21,450
$18.17
P+15%
$20.00 P+10%+Cap
$18.50 P+M+15%+Cap
$18.00
P+15%
$12.65
P+15%
$11.69
P+15%
$14.20
P+15%
$14.50
P+M+15%
$16.50
P+M+15%
$2,519
$2,280
$7,160
$2,281
$2,469
$2,962
$2,238
$3,055
$2,533
1.49
1.52
1.50
1.79
1.84
1.92
1.84
2.51
1.95
$2,989
$2,655
$8,453
$2,256
$2,372
$2,726
$2,151
$2,150
$2,301
1.77
1.77
1.77
1.77
1.77
1.77
1.77
1.77
1.77
$680
$604
$1,923
$514
$540
$620
$479
$489
$524
0.40
0.40
0.40
0.40
0.40
0.40
0.39
0.40
0.40
$52,416
$68,000
$14.20
$17.00
$6,278
$5,285
1.70
1.32
$6,531
$7,080
1.77
1.77
$1,486
$1,611
0.40
0.40
$600
Yr 1 $18.00
Yr 2 $18.50
Yr 3 $19.00
Rent A Center
CiCi's Pizza
3,690 09/01/92 02/28/12 1 - 5 Yrs @ $15.00
4,000 03/01/10 02/28/20 1 - 5 Yrs @ $20.57
P+15%
P+5%+Cap
4.00%
6.00%
05/01/11
Natural 06/01/13
Natural
6.00%
6.00%
Natural
Natural
$21.00
$19.50
07/01/11
07/01/12
$17.00
$17.50
03/01/15
$18.70
1 - 5 Yrs @ $22.62
1 - 5 Yrs @ $24.88
1 - 5 Yrs @ $27.68
TOTAL INLINE
75,123
$865,322
$116,276
$132,964
$30,241
$600
20
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Rent Roll continued
TENANT NAME
PADS
Chase Bank Ground Lease
LEASE
SQ. FT START
LEASE
EXPIRE
RENEWAL
OPTIONS
3,396 02/01/97 01/31/12 1 - 5 Yrs @ $26.69
MINIMUM RENT
TOTAL
$/SF
CAM
ADD-ON1
$83,500
$24.59
P+10%
$65,000
$20.00
DNP
$70,265
$23.50
$70,200
$61.80
CAM2
$/SF
TAX2
$/SF
INS2
$/SF PYLON
$5,956
1.75
$6,011
1.77
$1,368
0.40
DNP
0.00
DNP
0.00
DNP
0.00
P+M+15%
$4,853
1.62
$5,292
1.77
$1,204
0.40
P+15%
$1,644
1.45
$2,011
1.77
$457
0.40
%
% RENT
BRKPT
RENT STEPS
DATE
$/SF
1 - 5 Yrs @ $29.01
1 - 5 Yrs @ $31.51
McDonalds Ground Lease
3,250 01/01/11 12/31/31 1 - 5 Yrs @ $25.25
01/01/16
01/01/21
01/01/26
1 - 5 Yrs @ $26.77
1 - 5 Yrs @ $28.37
1 - 5 Yrs @ $30.07
1 - 5 Yrs @ $31.88
1 - 5 Yrs @ $33.79
Ruchi's Taqueria
Loan Star Title Loans
TOTAL PADS
TOTAL EXISTING
1 - 5 Yrs @
$24.50 (mos 61-90)
$25.50 (mos 91120)
1,136 04/12/10 04/11/15 1 - 5 Yrs @ $52.80
1 - 5 Yrs @ $58.80
2,990 08/01/99 10/01/13
10,772
$288,965
$12,453
$13,314
$3,029
$0
182,037
$2,276,325
$260,513
$316,445
$71,987
$600
$2,276,325
$260,513
$316,445
$71,987
$600
$21.20
$22.47
$23.82
VACANCY
TOTAL VACANCY
0
TOTAL GLA
182,037
Leased
100.00%
Vacancy
1
0.00%
CAM Add-On: P = Prorata Share; +M = Management Fee Included in CAM; +15 or +30 = % of Administrative Fee added to CAM; DNP = Tenant does not pay CAM - see notes to rent roll
2
Reimbursements estimated for Fiscal Year 1. The actual monthly escalation amounts the tenants pay with their rent represent management’s estimate and may or may not be accurate. This rent roll presents what recoveries should be using the recovery
methods contractually established in the leases and projected operating expenses. Actual reimbursements will vary with operating expenses
21
FINANCIAL ANALYSIS
SOUTHWAY
Shopping Center
Notes to Rent Roll
Marshalls
CAM
Taxes & Insurance
Percentage Rent
-
Rent Steps
Renewal Option
Continuous Operation
Co-Tenancy
-
Subletting and Assignment
-
Restrictions
Exclusive Use
-
Parking & Common Area
-
CAM includes $1,500 admin fee, increasing by $500 every five years. Annual increases capped at 5% excluding utilities.
Tenant may contest taxes.
2% of gross sales in excess of breakpoints $9,072,135 (years 1-5), $9,317,328 (years 6-10), $9,807,714 (Option 1), $10,298,100 (Option 2), $10,788,485
(Option 3), $11,278,871(Option 4), reported and paid annually.
Years 1 – 5 $9.25; Years 6 – 10 $9.50
Four five-year renewal options with 6 months notice at $10.00, $10.50, $11.00 and $11.50.
Tenant may cease operations at any time. If Tenant remains closed for 180 days, Landlord may recapture with 30 days notice.
If any two of Ross, Factory 2 U, Shoe Carnival and Dollar Tree are closed for 6 months, Tenant pays 2% of gross sales. If co-tenancy condition continues for
18 months, Tenant may terminate.
Tenant may assign or sublease without Landlord consent. If proposed assignment or sublease is not to a related entity, Landlord may terminate the lease
and pay Tenant unamortized improvement costs.
See Schedule B, Paragraph 4A for complete list of prohibited uses.
Excluding Ross, Factory 2-U, Boot Town and Shoe Carnival and their replacements, no other premises in the Shopping Center shall at any time contain more
than (i) 20,000 SF for the sale or display of apparel and related accessories, and/or (ii) 10,000 SF for the sale or display of shoes, footwear and related
accessories and/or (iii) 15,000 SF for the sale or display of furnishings for the home including linens and domestics, window treatments, floor coverings,
bathroom items, bedding, wall décor, housewares, table top goods, glassware, flatware, cookware, kitchen utensils, giftware and/or closet, shelving and
storage items and home accessories. A.J. Wright, T.J. Maxx, T.J. Maxx ‘N More, Marshall’s and Mega Marshall’s shall not be deemed competition.
Minimum 4 parking spaces per 1,000 SF GLA, minimum 1,066 parking spaces in aggregate. Construction restrictions apply.
Ross Dress for Less
CAM
Taxes & Insurance
Percentage Rent
Renewal Option
Co-Tenancy
-
Restrictions
Exclusive Use
-
Guarantor
-
CAM excludes structural repairs, management and supervision costs.
2% of gross sales in excess of natural breakpoints, paid and reported annually.
Four five-year renewal options with 180 days notice at $10.69, $11.18, $11.67 and $12.16.
Tenant may cease operations at any time. Landlord has right to recapture.
If 45,000 SF or more is vacant for 9 months, Tenant may terminate with 60 days notice.
Assigned to Ross Stores Texas, L.P. Tenant may sublease up to 20% of Demised Premises to third party operated departments and concessionaires without
Landlord consent.
See Lease paragraph 21.1 and Exhibit C for complete list of prohibited uses.
Landlord will not directly or indirectly lease, rent, occupy or permit to be occupied or used, by any person other than Tenant, any part of the Shopping
Center as an off-price department store (other than tenants under leases in existence on the date of this Lease and except for one other off-price
department store, nor will it permit any person or tenant occupying 2,000 SF or more within 75 feet of Demised Premises to display or sell men’s, women’s
or children’s clothing carried by Tenant without Tenant’s prior written consent.
Minimum 5 parking spaces per 1,000 SF GLA. Construction restrictions apply.
Ross Stores, Inc.
22
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Notes to Rent Roll continued
Best Buy
CAM
-
Taxes & Insurance
Percentage Rent
Rent Steps
Renewal Option
Restrictions
-
Exclusive Use
-
HVAC
Other Rights
-
CAM excludes structural repairs and management fee, includes 5% administrative fee on all CAM excluding utilities. Annual increases capped at 5%
excluding utilities.
Tenant does not pay percentage rent and is not required to report sales.
Years 1 – 5 $16.00; Years 6 – 10 $16.50
Four 5 year renewal options with 120 days notice at $17.00, $18.00, $19.00 and $20.00.
Tenant may sublease or assign without Landlord consent.
Restaurants, entertainment facilities, health clubs and/or grocery stores prohibited except in the locations, if any, expressly designated for the same on
Exhibit B. See Exhibit H for complete list of prohibited uses.
Exclusive for electronic equipment or appliances; major household appliances; personal computers and peripherals, computer software; digital,
downloadable and streamable entertainment; car radios, stereos, tape decks or phones; entertainment software, including compact discs, music videos,
dvds and prerecorded tapes; accessories and connectors for products sold by Tenant; telephones, telecopy, facsimile and photocopy machines;
photographic cameras or equipment; office equipment, supplies or furniture; sporting goods; books and magazines.
Building restrictions apply.
Landlord shall make all necessary repairs and replacements of obsolete or unrepairable HVAC, plumbing, electrical, gas and similar systems.
Right of first refusal on adjoining space.
-
CAM excludes structural repairs, includes 10% administrative fee. Annual increases capped at 7%, excluding utilities.
Two five-year renewal options with 150 days notice at $9.86 and market.
Tenant may cease operations at any time. If Tenant is closed for 90 days, Landlord may recapture with 60 days notice.
See Exhibit D for complete list of prohibited uses.
CAM
Percentage Rent
-
Rent Steps
Renewal Option
-
CAM excludes roof repairs, includes wages and salaries of onsite personnel and 15% administrative fee. Annual increases capped at 5%, excluding utilities.
4% of gross sales in excess of natural breakpoints, reported and paid monthly. If Tenant has any interest in another similar store within a 1 mile radius, the
sales of that store are included in gross sales.
Years 1 – 5 $8.00; Years 6 – 10 $8.25
Four five-year renewal options with 6 months notice at $9.00, $10.00, $11.00 and $12.00.
Factory 2 U
CAM
Percentage Rent
Renewal Option
Restrictions
Anna’s Linens
CAM
Taxes & Insurance
Percentage Rent
Renewal Option
Early Termination
-
Co-Tenancy
-
Exclusive Use
-
CAM excludes structural repairs, includes 10% administrative fee on all CAM except utilities. Annual increases capped at 4% excluding utilities.
Insurance annual increases capped at 50%. Tenant does not reimburse tax increases caused by more than one sale in any 3 year period.
Tenant does not pay percentage rent but is required to report sales annually.
Three 5-year renewal options with 6 months notice at $13.00, $14.00 and $15.00.
Tenant may cease operations at any time after the 24th month.
One-time right to terminate after the 37th month if Gross Sales during the immediately preceding 12 months did not exceed $160/SF. Tenant must give
written notice within 90 days after the end of the 37th month and pay $35,000.
If either Ross or Marshall’s closes for 180 days, Tenant pays lesser of 6% of Gross Sales or Base Rent. If anchor tenant is not open in 18 months after the start
of reduced rent, Tenant may terminate with 90 days notice.
Exclusive for blankets, bedspreads, sheets, towels, pillows, window coverings, table top and kitchen accessories and all related incidental products.
23
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Shoe Carnival
CAM
Percentage Rent
Renewal Option
Co-Tenancy
-
Restrictions
Exclusive Use
-
CAM excludes structural repairs, includes 15% administrative charge.
3% of gross sales in excess of natural breakpoints, reported monthly and paid annually.
Two five-year renewal options with 6 months notice at $11.00 and $12.00.
Tenant may cease operations at any time. If Tenant remains closed for 90 days Landlord may recapture with 30 days notice.
If Ross ceases operations, Tenant pays 3% of gross sales instead of minimum rent. If Ross remains closed for 12 months, Tenant may either terminate or
resume paying minimum rent.
See paragraph 15.11 for complete list of prohibited uses.
Exclusive for men’s women’s and children’s branded shoes.
Building restrictions apply.
Sally Beauty Supply
CAM
Percentage Rent
-
Renewal Option
-
CAM includes 15% administrative fee.
4% of Gross Sales in excess of $862,500 breakpoint during the current term and $991,875 breakpoint during the remaining option term, reported monthly
and paid annually.
One 5-year renewal option remaining with 180 days notice at $20.90.
-
CAM includes 10% administrative fee. Annual increases capped at 5% excluding utilities.
12/01/08 – 04/30/11 $20.00; 05/01/11 – 04/30/13 $21.00
One 5-year renewal option with 120 days notice at market rate.
Tenant may cease operations at any time.
Exclusive for tax preparation, electronic filing and refund anticipation loans.
Minimum 4 spaces per 1,000 SF.
Tenant’s annual HVAC repair cost limited to $1,000.00 during the first 5 years of the lease.
CAM
Percentage Rent
Rent Steps
Early Termination
Co-Tenancy
-
Exclusive Use
Guarantor
-
CAM includes management fee and 10% administrative fee. Annual increases capped at 5%, cumulative and compounded, excluding utilities.
4% of Gross Sales in excess of natural breakpoints reported and paid annually.
Months 1 – 36 $6,965.00/mo; Months 37 – 84 $7,363.00/mo; Months 85 – 120 $7,761.00/mo
One-time right to terminate as of the end of the 60th month with 6 months notice and payment of unamortized leasing costs.
If Ross or Marshall’s closes Tenant pays lesser of 5% of Gross Sales or Basic Monthly Rent. If co-tenancy condition continues for 12 months Tenant must
eithertterminate the lease with 60 days notice or resume paying full rent.
Exclusive for large size women’s apparel.
Urban Brands, Inc.
-
6% of gross sales in excess of natural breakpoints, paid and reported monthly.
One 5-year renewal option with 180 days notice at market rate, provided Tenant is paying percentage rent (requirement may be waived by Landlord).
Assigned to I-Ho Wang.
Mohammad Balsara.
H & R Block
CAM
Percentage Rent
Rent Steps
Renewal Option
Exclusive Use
HVAC
Ashley Stewart
Baskin Robbins
CAM
Percentage Rent
Renewal Option
Guarantor
24
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
LA Nails
CAM
Percentage Rent
Guarantor
-
CAM excludes structural repairs, includes 15% administrative fee.
Tenant does not pay percentage rent but is required to report sales monthly.
Hoan G. Pham.
-
Assigned to Joseph Chen. Nationwide Mutual Insurance Company has been released from all liability.
-
6% of Gross Sales in excess of natural breakpoints reported and paid monthly.
One 5-year renewal option with 6 months notice at $15.20.
-
CAM includes reasonable management fee and 15% administrative fee.
6% of Gross Sales in excess of natural breakpoints reported and paid monthly.
Tenant must pay an additional 25% of minimum rent for the month or months in which Tenant fails to be open for business.
Tenant may not operate a competing business within a 3 mile radius.
Wuu Shyong Yang.
CAM
Percentage Rent
Rent Steps
Renewal Option
Early Termination
-
Guarantor
Signage
-
CAM includes reasonable management fee and 15% administrative fee.
07/01/10 – 06/30/11 $16.50; 07/01/11 – 06/30/12 $17.00; 07/01/12 – 06/30/13 $17.50
One 3-year renewal option with not less than 6 months nor more than 9 months notice at $18.00, $18.50 and $19.00.
Tenant may cease operations at any time. Landlord may recapture the space if Tenant ceases operations.
If a change in law or regulation substantially impairs Tenant’s ability to conduct its business, Tenant may terminate the lease with 30 days notice and
payment of 6 months rent, NNN charges and sign charges plus any unamortized leasing costs.
Advance America Cash Advance Centers, Inc.
Pylon sign charge is $50 per month.
CAM
Percentage Rent
Renewal Option
Guarantor
Other Rights
-
CAM excludes structural repairs, includes 15% administrative fee.
One 5-year renewal option with 180 days notice at market rate not to exceed 115% of then-current rent.
Tenant not required to operate continuously. Landlord may terminate if Tenant vacates or abandons the premises.
Assigned to RAC USA, Inc.
Rent-A-Center, Inc.
Right of first offer to lease an additional space not less than 3,500 SF and not larger than $6,000 SF.
CAM
Percentage Rent
FJ Florist
CAM
Percentage Rent
Renewal Option
Ronnie’s Trophy Bowling
CAM
Percentage Rent
Exclusive Use
Guarantor
Advance America
Rent A Center
25
FINANCIAL ANALYSIS
SOUTHWAY
Shopping Center
CiCi’s Pizza
CAM
-
Percentage Rent
Rent Steps
Renewal Option
Co-Tenancy
-
Restrictions
Exclusive Use
Guarantor
-
CAM excludes structural repairs and management fee, includes 5% administrative fee. Total operating expenses limited to $4.60/SF for Year 1. Annual CAM
increases capped at 5% excluding utilities.
Tenant does not pay percentage rent but is required to report sales no more than once per year.
Years 1 – 5 $17.00; Years 6 – 10 $18.70
Four 5-year renewal options with 180 days notice at $20.57, $22.62, $24.88 and $27.88.
Tenant may cease operations at any time.
If Best Buy closes during the first 8 years of the initial lease term, Tenant pays lesser of 6% of Gross Sales or Base Rent. If a new lease for the Best Buy space
is not signed within 12 months or the tenant does not re-open within 18 months, Tenant may terminate the lease with 90 days notice.
Tenant may sublease or assign to Franchisor or another franchisee with net worth of at least $500,000 without Landlord consent.
See 12th grammatical paragraph in Article 3 for complete list of prohibited uses.
Exclusive for pizza for on or off site consumption. Tenant may not operate a competing business within a 2 mile radius.
Up to four reserved parking spaces in the vicinity of the Premises for take-out customers. Building restrictions apply.
Zahir Rasheed and Amer Rehman.
Ground Lease
-
CAM
Percentage Rent
Renewal Option
-
This is a ground lease for 10,180 SF of land and the buildings currently on the land or to be constructed on the land. Landlord has no obligation to maintain
or repair any portion of the Leased Premises.
Three five-year renewal options with 120 days notice at $90,650.00, $98,515.00 and $107,000.00.
Tenant may cease operations at any time. If Tenant is closed for 60 days, Landlord may recapture.
McDonald’s Ground Lease
Ground Lease
-
CAM
Taxes & Insurance
Percentage Rent
Rent Steps
Renewal Option
-
Restrictions
Exclusive Use
Other Rights
-
Ground lease for not less than 27,624 SF of land and the buildings and improvements to be constructed on the land. Tenant is responsible for all
maintenance and repairs.
Tenant does not reimburse CAM.
Tenant pays tax directly if Premises are assessed separately. Tenant to provide all insurance.
Years 1 – 5
$5,417.00/mo; Years 6 – 10 $5,742.00/mo; Years 11 – 15 $6,086.00/mo; Years 11 – 15 $6,451.00/mo
Six 5 year renewal options, automatically exercised unless Tenant gives 180 days notice to the contrary, at $6,838.00/mo, $7,249.00/mo, $7,684.00/mo,
$8,145.00/mo, $8,633.00/mo and $9,151.00/mo.
Tenant may assign or sublease without Landlord consent.
See Exhibit E for complete list of prohibited uses.
Exclusive for hamburgers or any other type of ground beef product in sandwich form.
Right of first refusal to purchase, right of first refusal to lease after expiration of the term.
-
CAM includes management fee and 15% administrative fee.
One 5 year renewal option with not less than 270 days nor more than 330 days notice at $24.50 (months 61-90) and $25.50 (months 91-120).
Ruchi’s Taqueria
CAM
Percentage Rent
Renewal Option
26
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Wellshire Financial (Loan Star Title Loans)
Tenant Maintenance
CAM
Taxes & Insurance
Percentage Rent
Renewal Option
Early Termination
Exclusive Use
Guarantor
-
Tenant to perform all maintenance and repairs. Landlord has no obligation.
CAM excludes structural repairs to the inline building, includes reasonable reserves and 15% administrative fee. Pro rata share is 0.635%
Pro rata share is 0.635%
Two 5-year renewal options with not more than 270 days nor less than 180 days notice at $6,600.00/mo and $7,350/mo.
If a change in law makes Tenant’s business illegal or unprofitable, Tenant may terminate with 60 days notice and payment of 6 months rent.
Exclusive for non purchase money loans secured by motor vehicles.
Select Management Resources, LLC, et al.
These notes to rent roll are an abstract of the leases at Southway Shopping Center and are provided herein for information purposes only. Grubb & Ellis and Seller do not represent that these notes to rent roll
are all-inclusive or correctly reflect the leases abstracted.
27
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Contractual Rent Steps
TENANT NAME
LEASE
SQ. FT START
MAJORS
Marshalls
Ross Dress for Less
Best Buy
TOTAL MAJORS
34,327 04/01/06 04/30/16
31,815 11/01/92 01/31/14
30,000 10/01/07 01/31/18
96,142
INLINE
Factory 2-U
Anna's Linens
Shoe Carnival
Sally Beauty Supply
H&R Block
Ashley Stewart
Baskin Robbins
LA Nails
FJ Florist
Advance America
Rent A Center
CiCi's Pizza
TOTAL INLINE
18,000
12,680
8,933
11,970
1,689
1,500
4,776
1,275
1,340
1,540
1,215
1,215
1,300
3,690
4,000
75,123
12/01/01
10/01/01
09/24/09
11/01/03
10/01/91
12/01/08
06/01/07
02/01/07
05/01/90
07/01/00
10/01/93
07/01/03
07/01/03
09/01/92
03/01/10
PADS
Ruchi's Taqueria
TOTAL PADS
3,396
3,250
2,990
1,136
10,772
02/01/97
01/01/11
08/01/99
04/12/10
TOTAL INCREASES
CUMULATIVE INCREASES
182,037
LEASE
EXPIRE
02/28/11
12/31/16
09/30/14
11/30/13
09/30/13
04/30/13
05/31/17
02/28/11
09/30/12
12/31/15
05/31/11
06/30/11
06/30/13
02/28/12
02/28/20
01/31/12
12/31/31
10/01/13
04/11/15
2010 ANNUAL RENT
TOTAL
$/SF
2010
$/SF
2011
$8,581
$/SF
2012
$/SF
2013
$/SF
2014
RENT STEPS
$/SF
2015
$/SF
2016
$/SF
2017
$/SF
2018
$/SF
2019
$/SF
2020
$/SF
$317,525
$324,513
$480,000
$1,122,038
$9.25
$10.20
$16.00
$11.67
$153,000
$101,440
$107,196
$120,000
$30,689
$30,000
$88,356
$22,950
$16,951
$18,003
$17,253
$17,618
$21,450
$52,416
$68,000
$865,322
$8.50
$8.00
$12.00
$10.03
$18.17
$20.00
$18.50
$18.00
$12.65
$11.69
$14.20
$14.50
$16.50
$14.20
$17.00
$11.52
$83,500
$65,000
$70,265
$70,200
$288,965
$24.59
$20.00
$23.50
$61.80
$26.83
$0
$0.00
$0
$0.00
$0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
$3,900 $0.36
$0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
$2,276,325
$12.50
$0
$0.00
$13,901
$0.08
$650 $0.00
$19,776 $0.11
$0 $0.00
$6,800 $0.04
$3,900 $0.02
$0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
$0
$0.00
$13,901
$0.08
$14,551 $0.08
$34,327 $0.19
$34,327 $0.19
$41,127 $0.23
$45,027 $0.25
$45,027 $0.25
$45,027 $0.25
$45,027 $0.25
$45,027 $0.25
$0
$0.00
$8,581
$0.25
$0.09
$3,170
$0.25
$1,500
$1.00
$0 $0.00
$15,000 $0.50
$15,000 $0.16
$4,776
$650
$0
$0.00
$5,320
$0.50
$0.07
$650
$0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
0 $0.00
0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
$0 $0.00
$1.00
$0.50
$650 $0.01
$4,776 $0.06
$0 $0.00
$6,800
$1.70
$6,800 $0.09
$3,900
$1.20
28
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Option Rent Steps
TENANT NAME
LEASE
SQ. FT START
MAJORS
Marshalls
Ross Dress for Less
Best Buy
TOTAL MAJORS
34,327 04/01/06 04/30/16
31,815 11/01/92 01/31/14
30,000 10/01/07 01/31/18
96,142
INLINE
Factory 2-U
Anna's Linens
Shoe Carnival
Sally Beauty Supply
H&R Block
Ashley Stewart
Baskin Robbins
LA Nails
FJ Florist
Advance America
Rent A Center
CiCi's Pizza
TOTAL INLINE
18,000
12,680
8,933
11,970
1,689
1,500
4,776
1,275
1,340
1,540
1,215
1,215
1,300
3,690
4,000
75,123
12/01/01
10/01/01
09/24/09
11/01/03
10/01/91
12/01/08
06/01/07
02/01/07
05/01/90
07/01/00
10/01/93
07/01/03
07/01/03
09/01/92
03/01/10
PADS
Ruchi's Taqueria
TOTAL PADS
3,396
3,250
2,990
1,136
10,772
02/01/97
01/01/11
08/01/99
04/12/10
TOTAL INCREASES
CUMULATIVE INCREASES
182,037
LEASE
EXPIRE
02/28/11
12/31/16
09/30/14
11/30/13
09/30/13
04/30/13
05/31/17
02/28/11
09/30/12
12/31/15
05/31/11
06/30/11
06/30/13
02/28/12
02/28/20
01/31/12
12/31/31
10/01/13
04/11/15
2010 ANNUAL RENT
TOTAL
$/SF
2010
$/SF
2011
$/SF
2012
$/SF
2013
$/SF
2014
RENT STEPS
$/SF
2015
$/SF
2016
$17,164
$/SF
2017
$/SF
2018
$/SF
2019
$/SF
2020
$/SF
$317,525
$324,513
$480,000
$1,122,038
$9.25
$10.20
$16.00
$11.67
$153,000
$101,440
$107,196
$120,000
$30,689
$30,000
$88,356
$22,950
$16,951
$18,003
$17,253
$17,618
$21,450
$52,416
$68,000
$865,322
$8.50
$8.00
$12.00
$10.03
$18.17
$20.00
$18.50
$18.00
$12.65
$11.69
$14.20
$14.50
$16.50
$14.20
$17.00
$11.52
$83,500
$65,000
$70,265
$70,200
$288,965
$24.59
$20.00
$23.50
$61.80
$26.83
$0
$0.00
$0
$0.00
$7,150 $0.66
$2,990 $0.28
$0 $0.00
$2,276,325
$12.50
$0
$0.00
$25,695
$0.14
$10,102 $0.06
$19,862 $0.11
$25,172 $0.14
$12,640 $0.07
$0
$0.00
$25,695
$0.14
$35,797 $0.20
$55,659 $0.31
$80,831 $0.44
$93,471 $0.51 $117,655 $0.65 $138,200 $0.76 $165,170 $0.91 $189,692 $1.04 $206,172 $1.13
$15,589
$0
$0.00
$0
$24,480
$0.00
$0 $0.00
$0 $0.00
$0.50
$0.49
$15,589 $0.16
$15,589
$0 $0.00
$1.36
$17,164 $0.18
$7,020
$0 $0.00
$1,215
$0.00
$25,695
$0.97
$2.73
$650
$0.50
0 $0.00
$1.00
$1.00
$8,933
$11,970
$1.00
$1.00
$1.00
$2,952
$0
$11,611
$4,611
$0.49
15,589 $0.16
$0.39
$12,680
$8,933
$15,000 $0.50
$15,000 $0.16
$0.34
$2,952 $0.04
$7,150
$650
$0.50
$650
$0.50
$0.80
$16,872 $0.22
$9,583 $0.13
$650 $0.01
$7,020 $0.09
$2.11
$12,680 $0.17
$7,865
$2,990
$1.00
$2,990
$1.00
$9,000
$7.92
$11,990 $1.11
$11,970 $0.16
$8,933 $0.12
$7,480 $1.87
$7,480 $0.10
$9,000 $7.92
$9,000 $0.84
$2.32
$0 $0.00
$7,865 $0.73
$0 $0.00
$0 $0.00
$24,184 $0.13
$20,545 $0.11
$26,970 $0.15
$24,522 $0.13
$16,480 $0.09
29
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Lease Expiration Schedule
Expiration Square
1
Date
Feet
Year
Tenant
2011
Baskin-Robbins
1
FJ Florist
1
06/30/11
06/30/11
12/31/11
% of
2
Total
1,275
1,215
1,215
3,705
0.70%
0.67%
0.67%
2.04%
3,705
2.04%
Total for 2012
3,396
3,690
1,340
8,426
1.87%
2.03%
0.74%
4.63%
Cumulative
12,131
6.66%
1,500
1,300
1,689
2,990
11,970
19,449
0.82%
0.71%
0.93%
1.64%
6.58%
10.68%
31,580
17.35%
Total for 2014
31,815
8,933
40,748
17.48%
4.91%
22.38%
Cumulative
72,328
39.73%
1,136
1,540
2,676
0.62%
0.85%
1.47%
75,004
41.20%
Total for 2016
18,000
34,327
12,680
65,007
9.89%
18.86%
6.97%
35.71%
Cumulative
140,011
76.91%
Total for 2011
Cumulative
2012
2013
1
Rent A Center
LA Nails
1
H&R Block
1
Advance America
1
Sally Beauty Supply
1
Ruchi's Taqueria
1
Shoe Carnival
1
01/31/12
05/31/12
10/31/12
03/31/13
04/30/13
08/31/13
08/31/13
11/30/13
Total for 2013
Cumulative
2014
2015
Ross Dress for Less
1
Anna's Linens
1
Nationwide
03/31/14
12/31/14
1
04/30/15
08/31/15
Total for 2015
Cumulative
2016
1
Factory 2 U
1
Marshalls
1
02/29/16
05/31/17
05/31/17
Base Rent Annualized
PSF/Yr
Rent
$18.00
$14.20
$14.50
$22,950
$17,253
$17,618
$57,821
$24.59
$14.20
$12.65
$83,500
$52,416
$16,951
$152,867
$21.00
$17.50
$18.17
$23.50
$10.03
$31,500
$22,750
$30,689
$70,265
$120,000
$275,204
$10.20
$12.00
$324,513
$107,196
$324,513
$61.80
$11.69
$70,200
$18,003
$88,203
$9.86
$9.50
$8.25
$177,480
$326,106
$104,610
$177,480
30
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Lease Expiration Schedule continued
Year
2017
Total for 2017
Expiration Square
1
Feet
Date
Tenant
Ashley Stewart
08/31/18
Cumulative
2018
Total for 2018
1
Best Buy
11/30/19
Cumulative
2020
Total for 2020
CiCi's Pizza
1
04/30/21
Cumulative
2031
Total for 2031
McDonald's Ground Lease
Cumulative
1
12/31/29
% of
2
Total
4,776
4,776
2.62%
2.62%
144,787
79.54%
30,000
30,000
16.48%
16.48%
174,787
96.02%
4,000
4,000
2.20%
2.20%
178,787
98.21%
3,250
3,250
1.79%
1.79%
Base Rent Annualized
PSF/Yr
Rent
$19.50
$93,132
$93,132
$16.50
$495,000
$495,000
$18.70
$74,800
$74,800
$21.20
$68,900
$68,900
182,037 100.00%
1
Has Renewal Option(s)
2
182,037 square feet = Total GLA
31
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
As Is Operating Statement
Tenant
Suite
Total
Rent
8100
8066
8210
8006
8090
8020
8032
8230
8220
8080
8076
900
800
700
600
500
200
100
8120
Pad
8054
8070
$437,750
440,206
584,750
217,025
153,648
139,565
163,855
37,777
35,539
105,892
29,470
22,332
24,311
22,121
23,312
26,808
66,711
81,976
96,835
65,000
81,614
74,312
$317,525
324,513
480,000
153,000
104,610
107,196
120,000
30,689
30,000
88,356
22,950
16,951
18,003
17,253
17,618
21,450
52,416
68,000
83,500
65,000
70,265
70,200
$2,930,809
$2,279,495
Pct Rent
Reimbursements
SF
$120,225
115,693
104,750
64,025
49,038
32,369
43,855
6,188
5,539
17,536
5,051
5,381
6,308
4,868
5,694
5,358
14,295
13,976
13,335
0
11,349
4,112
34,327
31,815
30,000
18,000
12,680
8,933
11,970
1,689
1,500
4,776
1,275
1,340
1,540
1,215
1,215
1,300
3,690
4,000
3,396
3,250
2,990
1,136
$648,945
182,037
Revenues
Marshalls
Ross Dress for Less
Best Buy
Factory 2-U
Anna's Linens
Shoe Carnival
Sally Beauty Supply
H&R Block
Ashley Stewart
Baskin Robbins
LA Nails
Nationwide
FJ Florist
Advance America
Rent A Center
CiCi's Pizza
Chase Bank
McDonalds
Ruchi's Taqueria
900
1,469
Vacant
0
Total Property
Add: Sign Rent
0.0%
Effective Revenue
$600
$0
$2,931,409
CAM
Property Tax
Insurance
Management Fee
3.00%
Non-Reimbursable Expenses
Capital Reserve
Total Non-Reimbursable Expenses
Total Expenses
$247,000
316,445
72,000
87,942
723,387
$0.15
27,306
$27,306
$750,693
$2,180,716
Debt Service
-$1,087,745
Net Cash Flow
$2,369
$1,092,971
32
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Pro Forma Operating Statement
Tenant
Suite
Total
Rent
8100
8066
8210
8006
8090
8020
8032
8230
8220
8080
8076
900
800
700
600
500
200
100
8120
Pad
8054
8070
$437,750
440,206
584,750
217,025
153,648
139,565
163,855
37,777
35,539
105,892
29,470
22,332
24,311
22,121
23,296
26,808
66,711
81,976
96,835
65,000
81,614
74,312
$317,525
324,513
480,000
153,000
104,610
107,196
120,000
30,689
30,000
88,356
22,950
16,951
18,003
17,253
17,618
21,450
52,416
68,000
83,500
65,000
70,265
70,200
Pct Rent
Reimbursements
SF
$120,225
115,693
104,750
64,025
49,038
32,369
43,855
6,188
5,539
17,536
5,051
5,381
6,308
4,868
5,678
5,358
14,295
13,976
13,335
0
11,349
4,112
34,327
31,815
30,000
18,000
12,680
8,933
11,970
1,689
1,500
4,776
1,275
1,340
1,540
1,215
1,215
1,300
3,690
4,000
3,396
3,250
2,990
1,136
Revenues
*
*
*
*
*
Marshalls
Ross Dress for Less
Best Buy
Factory 2-U
Anna's Linens
Shoe Carnival
Sally Beauty Supply
H&R Block
Ashley Stewart
Baskin Robbins
LA Nails
Nationwide
FJ Florist
Advance America
Rent A Center
CiCi's Pizza
Chase Bank
McDonalds
Ruchi's Taqueria
900
1,469
Lease Up
0
0
0
0
0
Total Property
$2,930,793
$2,279,495
$2,369
$648,929
182,037
Add: Sign Rent
5.0%
Effective Revenue
$2,866,080
CAM
Property Tax
Insurance
Management Fee
3.00%
Non-Reimbursable Expenses
Capital Reserve
Total Non-Reimbursable Expenses
Total Expenses
$600
-$65,313 * Excluding Majors
$247,000
316,445
72,000
85,982
721,427
$0.15
27,306
$27,306
$748,733
$2,117,347
Debt Service
-$1,087,745
Net Cash Flow
$1,029,603
33
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Argus Projections
Year 2
Sep-2012
Year 3
Sep-2013
Year 4
Sep-2014
Year 5
Sep-2015
Year 6
Sep-2016
Year 7
Sep-2017
Year 8
Sep-2018
Year 9
Sep-2019
Year 10
Sep-2020
Year 11
Sep-2021
$2,277,908
$2,315,200
(3,754)
$2,343,791
(13,177)
$2,401,810
(44,766)
$2,435,045
(53,138)
$2,516,766
(62,554)
$2,653,287
(62,783)
$2,710,443
(15,117)
$2,748,205
(24,040)
$2,768,571
(15,657)
$2,792,227
(16,248)
2,277,908
2,369
648,929
600
2,311,446
4,165
659,547
600
2,330,614
6,013
675,373
600
2,357,044
8,285
686,538
600
2,381,907
11,157
711,188
600
2,454,212
10,760
724,725
600
2,590,504
11,601
746,890
600
2,695,326
13,744
780,850
600
2,724,165
10,487
801,845
600
2,752,914
12,934
827,255
600
2,775,979
13,180
852,511
600
Total Potential Gross Revenue
General Vacancy
2,929,806
(66,046)
2,975,758
(63,478)
3,012,600
(55,181)
3,052,467
(25,910)
3,104,852
(19,752)
3,190,297
(13,816)
3,349,595
(19,890)
3,490,520
(70,991)
3,537,097
(63,507)
3,593,703
(73,387)
3,642,270
(74,056)
Effective Gross Revenue
2,863,760
2,912,280
2,957,419
3,026,557
3,085,100
3,176,481
3,329,705
3,419,529
3,473,590
3,520,316
3,568,214
180,000
18,000
4,000
42,000
3,000
72,000
316,445
85,913
185,400
18,540
4,120
43,260
3,090
74,160
325,938
87,368
190,962
19,096
4,244
44,558
3,183
76,385
335,717
88,723
196,691
19,669
4,371
45,895
3,278
78,676
345,788
90,797
202,592
20,259
4,502
47,271
3,377
81,037
356,162
92,553
208,669
20,867
4,637
48,690
3,478
83,468
366,846
95,294
214,929
21,493
4,776
50,150
3,582
85,972
377,852
99,891
221,377
22,138
4,919
51,655
3,690
88,551
389,187
102,586
228,019
22,802
5,067
53,204
3,800
91,207
400,863
104,208
234,859
23,486
5,219
54,800
3,914
93,944
412,889
105,609
241,905
24,190
5,376
56,444
4,032
96,762
425,276
107,046
For the Years Ending
Potential Gross Revenue
Base Rental Revenue
Absorption & Turnover Vacancy
Scheduled Base Rental Revenue
Retail Sales Percent Revenue
Expense Reimbursement Revenue
Sign Rent
Operating Expenses
Common Area Maint
Roof
Other Structural
Electricity
Water - Irrigation
Insurance
Property Tax
Management Fee
Total Operating Expenses
Leasing & Capital Costs
Tenant Improvements
Leasing Commissions
CapEx Reserve
Total Leasing & Capital Costs
Cash Flow Before Debt Service
Debt Service
Interest Payments
Principal Payments
Total Debt Service
Cash Flow After Debt Service
But Before Taxes
Year 1
Sep-2011
721,358
741,876
762,868
785,165
807,753
831,949
858,645
884,103
909,170
934,720
961,031
2,142,402
2,170,404
2,194,551
2,241,392
2,277,347
2,344,532
2,471,060
2,535,426
2,564,420
2,585,596
2,607,183
27,306
9,073
5,068
28,125
31,843
17,789
28,968
44,434
96,142
29,838
12,568
54,293
30,733
70,490
180,591
31,655
92,215
122,700
32,604
36,157
20,198
33,582
44,495
36,243
34,590
37,838
21,137
35,628
27,428
15,322
36,696
27,306
42,266
78,600
170,414
97,594
282,736
247,519
89,937
115,328
94,603
79,446
2,115,096
2,128,138
2,115,951
2,070,978
2,179,753
2,061,796
2,223,541
2,445,489
2,449,092
2,490,993
2,527,737
846,778
240,967
831,406
256,339
815,053
272,692
797,658
290,087
779,152
308,593
759,466
328,279
738,525
349,220
716,247
371,498
692,548
395,197
667,337
420,407
640,519
447,226
1,087,745
1,087,745
1,087,745
1,087,745
1,087,745
1,087,745
1,087,745
1,087,745
1,087,745
1,087,744
1,087,745
$1,027,351
$1,040,393
$1,028,206
$983,233
$1,092,008
$974,051
$1,135,796
$1,357,744
$1,361,347
$1,403,249
$1,439,992
34
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Assumptions
Analysis begins
October 1, 2010
Annual inflation
Management Fee
Capital Reserve
3.00%
3.00%
$0.15
Lease Rates:
Anchor
Inline
Pad
Inline Low
Year 1
$12.00
$18.00
$24.00
$15.50
Year 2
$12.36
$18.54
$24.72
$15.97
Tenant Improvements:
Inline Space
Anchor Space
New
$8.00
$5.00
Renew
$3.00
$0.00
Leasing Commissions:
All Space
New
6.0%
Renew
4.0%
Lease-up:
Anchor
Inline
Total
General Vacancy
Turnover
Anchor
Inline
Pad
Year 3
$12.73
$19.10
$25.46
$16.44
SF
Rate
Rent
0
$12.00
$0
0
$18.00
$0
0
$0
5.00% * Excluding Majors
Months
Vacant
6
6
6
Percent
Renew
75%
75%
75%
increase 3% per year after Year 3
TI
$0
$0
$0
Comm
$0
$0
$0
Term in
Years
10
5
5
35
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Historical Operating Expenses
Projected
Model
YTD Ann.
2010
Actual
2009
Actual
2008
Common Area Maintenance
Taxes
Insurance
Management Fees
$247,000
$316,445
$72,000
$85,982
$223,191
$372,000
$49,992
$82,599
$250,455
$435,742
$71,920
$86,953
$266,185
$246,000
$72,000
$79,258
Total
$721,427
$727,782
$845,070
$663,443
Tax per HCAD 2010 assessed values at 2009 rates
36
SOUTHWAY
FINANCIAL ANALYSIS
Shopping Center
Existing Debt Summary
Terms
Original Lender
Lehman Brothers Bank FSB
Current Lender
Wells Fargo
Original Loan Amount
$14,800,000.00
Date
June 30, 2004
Balance as of 8/23/10
$13,865,186
Interest Rate
6.2%
Maturity Date
July 11, 2014
Monthly P&I
$90,645.41
Assumption Fee
0.5% first transfer;
1% second, third and fourth transfers
First transferee can add mezzanine debt
up to 90% of current value.
Paragraph 8.3 (D).
37
MARKET AREA OVERVIEW
SOUTHWAY
Shopping Center
Houston Metro Overview
Houston, the fourth most populous city in the
United States, is the largest city in the south and
southwest regions. According to the U.S. Bureau
of Census, the Greater Houston CMSA contains a
population of 5.54 million people. Houston is
located in the northern portion of the Gulf Coastal
plains, a 40 to 50 mile swath along the Texas Gulf
Coast. The city is virtually on an entire coastal
plain with the northern and eastern parts of the
city extending into the pine forests of East Texas.
The population of Houston’s seven-county CMSA
is projected to increase by an additional 1.48
million people through the year 2010, according
to a task force working for the Houston-Galveston
Area Council (HGAC). Employment in the area
encompassing Harris, Fort Bend, Brazoria,
Galveston, Liberty, Montgomery and Waller Counties is projected to increase from 1.5 million employed in 1980 to 2.4 million in 2010, an increase of more
than 60 percent.
Houston Metro Economy
According to the latest estimates from the Texas Workforce Commission, the 10-county Houston-Sugar Land-Baytown Metropolitan Statistical Area lost
76,700 jobs from September 2008 to September 2009, representing a 3 percent decline on a year-over-year basis. The forecast for the remainder of 2009
will be more of the same as businesses remain cautious in their operational decisions. According to Dr. Barton Smith, the Houston market will see job losses
throughout 2009 before bouncing back slightly in 2010. Over the longer term, Houston’s formidable economic and demographic fundamentals bode well
for the market as strong population growth and steady economic performance will position Houston to benefit from the pending recovery.
Despite the ongoing recession, some of Metro Houston’s core industries continue to perform well. Houston’s medical sector continues to expand across the
region, adding new facilities and jobs. The August estimates show continued strength in some well-paid industries, with year-over-year growth of 4.2
percent in oil and gas extraction, 2 percent in computer systems design and related services, 2.7 percent in educational services, and 1.4 percent in Health
Care and Social Assistance.
38
SOUTHWAY
Shopping Center
Houston Employment Diversity
Substantial structural alteration in Houston’s economy over the past 25 years has reduced Houston’s vulnerability to downturns in upstream energy, which
nonetheless continues to influence Houston far more than it does the nation as a whole.
The Energy Industry
Houston is still considered the Energy Capital of the World. This energy base is fully diversified among energy
industries, including upstream energy (oil and gas exploration and production, oilfield equipment manufacturing),
downstream energy (refining and petrochemicals), distribution (wholesaling, pipeline transportation), and energy
trading. According to the Greater Houston Partnership, 48 percent of the region’s economic base employment, or
sectors of the local economy that export goods and services outside the region, is related to energy. More than 3,000
energy-related establishments are located within the Houston Metropolitan Statistical Area, including more than 500
exploration and production firms, more than 150 pipeline transportation establishments and hundreds of
manufacturers and wholesalers of energy sector products. Ten of the 25 largest publicly traded oil and gas
exploration and production firms are headquartered in Houston. The logistics for moving much of the nation’s
petroleum and natural gas across the country are controlled from Houston. Fifteen of the nation’s top 20 natural gas
transmission companies have corporate or divisional headquarters or ownership interests in Houston, controlling
79.5 percent of U.S. capacity.
Some of the larger energy employers include:
ExxonMobil
Chevron/Texaco
BP
Duke Energy
Dynegy
Williams
Schlumberger
Shell
Conoco
Anadarko
El Paso
Reliant
Halliburton
Global Santa Fe
Texas Medical Center (TMC)
The Texas Medical Center collectively makes up the city’s largest employer with nearly 73,000 total employees
(includes 8,800 staff in part-time and contract positions; not included are approximately 10,000 professionals and
support personnel who work in adjacent professional buildings). Situated due south of the Central Business
District along Main Street, the Medical Center is an immense complex of more than 100 facilities sitting on more
than 1,000 acres between U.S. Highway 59 and State Highway 288, just south of Hermann Park. The world famous
Texas Medical center is largest of its kind in the world, and is home to 46 nonprofit and government institutions,
including 13 teaching hospitals, two medical schools, four colleges of nursing, a dental college, a college of
pharmacy and a college of optometry. Altogether 5.5 million patients visit them each year with MD Anderson
Cancer Center, Methodist Hospital and The Texas Heart Institute comprising the core of the Texas Medical Center.
39
SOUTHWAY
Shopping Center
NASA Johnson Space Center
Located 25 miles from downtown Houston, the $1.5 billion Johnson Space Center complex,
established in 1961, occupies 1,620 acres. One of NASA’s largest research and
development facilities, Johnson Space Center manages the design, development and
assembly of the International Space Station, manages the Space Shuttle program, serves as
NASA’s lead center for life sciences research and application, selects and trains astronauts,
controls manned space craft and oversees many medical, scientific and engineering
experiments conducted aboard the space shuttle. Houston’s Johnson Space Center
employs approximately 13,000 engineers, scientists and administrative personnel.
Mobility
Houston’s infrastructure is supported by three airports which combine to form the fourth
largest airport system in the United States and the sixth largest airport system in the
world. A network of interstate highways and rail connections link Houston with inland
markets while two major railroads and approximately 150 trucking lines connect the Port
of Houston to the continental United States, Mexico and Canada.
Houston Airport System
Houston has one of the busiest, yet least congested airport systems in the United States. According to the Greater
Houston Partnership, in terms of passenger volume, the Houston Airport System ranks as the fourth largest multiairport system nationally and sixth largest worldwide. The system comprises George Bush International Airport
(IAH), William P. Hobby Airport (HOU) and Ellington Field (EFD). The Houston Airport System served 50.5 million
passengers during the 12-months trailing December 2008 and is forecasted to reach 80 million passengers by 2020.
Port of Houston
In terms of tonnage, the Port of Houston in 2007 ranked as the world’s 16th largest port. In 2008, it ranked first in
the United States in volume of foreign tonnage; in 2007, second in total tonnage, according to the Greater Houston
Partnership. Among Gulf of Mexico ports, the Port of Houston is the leader in containerized cargo. In 2008, it
handled more than 1.79 million TEUs (20-foot equivalent units), and is ranked as the seventh largest container port
in the U.S. The port is a 25-mile complex of diversified public and private facilities just a few hours sailing time
from the Gulf of Mexico, linked to the continental United States, Mexico and Canada by two major railroads and
150 trucking lines.
40
SOUTHWAY
Shopping Center
Rail
Houston is one of the nation’s busiest rail centers, with more than 700,000 rail cars arriving in or departing from the port city each year. Shippers have
access to all major U.S. cities in the West via direct lines and in the East via connections in St. Louis, Kansas City, Memphis, New Orleans or Chicago. Service
is available to all Port of Houston Authority facilities as well as more than 150 industries along the Houston Ship Channel. The rail system is further
integrated with the local trucking industry via six intermodal terminals, the local highway system, Houston’s three major airports, and the barge system on
the Gulf Intracoastal Waterway.
Houston Life and Entertainment
Houston has more than 650 city and county parks with all sorts of amenities including walking trails, playgrounds, pools, dog parks and community centers
coupled with three new, high-tech sports arenas, home to the Astros (baseball), the Rockets (basketball), and the Texans (football). Houston’s weather is a
fantastic mix of sunshine and more sunshine. The region averages 59% of possible sunshine annually, ranging from 45% in January to 70% in July. The
average annual temperature 69.9 degrees, with highs in the summer averaging 84 degrees and winter lows averaging about 50 degrees.
Arts and Entertainment
Houston has one of the country’s largest concentrations of seats within its theater districts. Hailed by the New York Times as “one of the nation’s best
ballet companies,” the Houston ballet is the fifth-largest company in the United States. The Houston Museum District, located 15 minutes from Downtown
is the fourth-largest in the United States and is home to such venues as the Museum of Fine Arts, Houston; the Buffalo Soldiers Museum; and the Houston
Children’s Museum. There’s also the Houston Museum of Natural Science, the Holocaust Museum Houston, the Contemporary Arts Museum and the Menil
Collection.
Sports and Recreational Activities
Sports are a year-round pastime in the Bayou City. Spring has Houstonians catching Astros fever, which lasts all through the summer. Fall brings the Texans’
first kickoff and the Aeros’ first face off. Winter has the Comets and Rockets hitting
the court.
The region’s more than 650 parks provide ample space for your hiking and biking
needs. The Houston Parks and Recreation Department maintains more 380 miles of
hike-and-bike trails, on-street bike lanes and street bike routes.
Home to the Shell Houston Open, Houston’s golf scene is nationally known for being
one of the best. Across the region are a variety of municipal and private courses that
aim to challenge your game, no matter your playing level. The region has more than
130 golf courses, about half of which are public.
Head south of the Houston city limits to enjoy the sand and surf. Galveston is the
region’s beach playground and when you’re finished with riding the waves and
soaking up rays, the city has shops, restaurants and recreation opportunities galore.
41
SOUTHWAY
APPENDIX
Shopping Center
SALE/LEASE AMERICANS WITH DISABILITIES ACT,
HAZARDOUS MATERIALS AND TAX DISCLOSURE
Re:
Houston, Texas
Transaction Service
Professional:
Grubb & Ellis Company / George Cushing
Representing Seller
The Americans With Disabilities Act is intended to make many business establishments equally accessible to persons with a variety of disabilities; modifications to real property
may be required. State and local laws also may mandate changes. The real estate brokers in this transaction are not qualified to advise you as to what, if any, changes may be
required now, or in the future. Owners and tenants should consult the attorneys and qualified design professionals of their choice for information regarding these matters. Real
estate brokers cannot determine which attorneys or design professionals have the appropriate expertise in this area.
Various construction materials may contain items that have been or may be in the future be determined to be hazardous (toxic) or undesirable and may need to be specifically
treated/handled or removed. For example, some transformers and other electrical components contain PCB's, and asbestos has been used in components such as fire-proofing,
heating and cooling systems, air duct insulation, spray-on and tile acoustical materials, linoleum, floor tiles, roofing, dry wall and plaster. Due to prior or current uses of the
Property or in the area, the Property may have hazardous or undesirable metals (including lead-based paint), minerals, chemicals, hydrocarbons, or biological or radioactive
items (including electric and magnetic fields) in soils, water, building components, above or below-ground containers or elsewhere in areas that mayor may not be accessible or
noticeable. Such items may leak or otherwise be released. Real estate brokers have no expertise in the detection or correction of hazardous or undesirable items. Expert
inspections are necessary. Current or future laws may require clean up by past, present and/or future owners and/or operators. It is the responsibility of the Seller/Lessor and
Buyer/Tenant to retain qualified experts to detect and correct such matters and to consult with legal counsel of their choice to determine what provisions, if any, they may wish
to include in transaction documents regarding the Property.
Sale, lease and other transactions can have local, state and federal tax consequences for the seller/lessor and/or buyer/tenant. In the event of a sale, Internal Revenue Code
Section 1445 requires that all buyers of an interest in any real property located in the United States must withhold and pay over to the Internal Revenue Service (IRS) an amount
equal to ten percent (10%) of the gross sales price within ten (10) days of the date of the sale unless the buyer can adequately establish that the seller was not a foreigner,
generally by having the seller sign a Non-Foreign Seller Certificate. Note that depending upon the structure of the transaction, the tax withholding liability could exceed the net
cash proceeds to be paid to the seller at closing. Consult your tax and legal advisor. Real estate brokers are not qualified to give legal or tax advice or to determine whether any
other person is properly qualified to provide legal or tax advice.
SELLER/LESSOR
BUYER/LESSEE
Entity Name:
Entity Name:
By:
By:
Title:
Title:
Date:
Date:
42
SOUTHWAY
APPENDIX
Shopping Center
Information on Agency Relationships
What to Know Before Working with a Real Estate Broker
Re:
Houston, Texas
Transaction Service
Professional:
Before working with a real estate broker, you should know that the duties of a
broker depend on whom the broker represents. If you are a prospective seller or
landlord (owner) or a prospective buyer or tenant (buyer), you should know that
the broker who lists the property for sale or lease is the owner’s agent. A broker
who acts as a subagent represents the owner in cooperation with the listing
broker. A broker who acts as a buyer’s agent represents the buyer. A broker may
act as an intermediary between the parties if the parties consent in writing. A
broker can assist you in locating a property, preparing a contract or lease, or
obtaining financing without representing you. A broker is obligated by law to
treat you honestly.
IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner’s
agent by entering into an agreement with the owner, usually through a written
listing agreement or by agreeing to act as a subagent by accepting an offer of
subagency from the listing broker. A subagent may work in a different real
estate office. A listing broker or subagent can assist the buyer but does not
represent the buyer and must place the interests of the owner first. The buyer
should not tell the owner’s agent anything the buyer would not want the owner
to know because an owner’s agent must disclose to the owner any material
information known to the agent.
IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer’s agent
by entering into an agreement to represent the buyer, usually through a written
buyer representation agreement. A buyer’s agent can assist the owner but does
not represent the owner and must place the interests of the buyer first. The
owner should not tell a buyer’s agent anything the owner would not want the
buyer to know because a buyer’s agent must disclose to the buyer any material
information known to the agent.
IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an
intermediary between the parties if the broker complies with The Texas Real
Estate License Act. The broker must obtain the written consent of each party to
the transaction to act as an intermediary. The written consent must state who
Grubb & Ellis Company / George Cushing
Representing Owner
will pay the broker and, in conspicuous bold or underlined print, set forth the
broker’s obligations as an intermediary. The broker is required to treat each
party honestly and fairly and to comply with The Texas Real Estate License
Act. A broker who acts as an intermediary in a transaction:
(1) shall treat all parties honestly;
(2) may not disclose that the owner will accept a price less than
the asking price unless authorized in writing to do so by the owner;
(3) may not disclose that the buyer will pay a price greater than
the price submitted in a written offer unless authorized in writing
to do so by the buyer; and
(4) may not disclose any confidential information or any
information that a party specifically instructs the broker in writing
not to disclose unless authorized in writing to disclose the
information or required to do so by The Texas Real Estate License
Act or a court order or if the information materially relates to the
condition of the property.
With the parties’ consent, a broker acting as an intermediary between the
parties may appoint a person who is licensed under The Texas Real Estate
License Act and associated with the broker to communicate with and carry
out instruction of one party and another person who is licensed under the
Act and associated with the broker to communicate with and carry out
instruction of the other party.
If You Choose to Have a Broker Represent You, you should enter into a
written agreement with the broker that clearly establishes the broker’s
obligations and your obligations. The agreement should state how and by
whom the broker will be paid. You have the right to choose the type of
representation, if any, you wish to receive. Your payment of a fee to a broker
does not necessarily establish that the broker represents you. If you have
any questions regarding the duties and responsibilities of the broker, you
should resolve those questions before proceeding.
Broker asks that you acknowledge receipt of this information on agency relationships for broker’s records.
Seller/Landlord/Lessor
Date
Purchaser/Tenant/Lessee
Date
43
SOUTHWAY
APPENDIX
Shopping Center
Confidential Memorandum and Disclaimer
Grubb & Ellis Company (“Agent”) has been engaged as the exclusive agent for the sale of Southway Shopping Center located in Houston, Texas, (the “Property”).
The Property is being offered for sale in an “as-is, where-is” condition and Seller and Agent make no representations or warranties as to the accuracy of the information
contained in this Offering Memorandum. The enclosed materials include highly confidential information and are being furnished solely for the purpose of review by
prospective purchasers of the interest described herein. Neither the enclosed materials nor any information contained herein is to be used for any other purpose or made
available to any other person without the express written consent of the Seller. Each recipient, as a prerequisite to receiving the enclosed, should be registered with Grubb &
Ellis Company as a “Registered Potential Investor” or as “Buyer’s Agent” for an identified “Registered Potential Investor”. The use of this Offering Memorandum and the
information provided herein is subject to the terms, provisions and limitations of the confidentiality agreement furnished by Agent prior to delivery of this Offering
Memorandum.
The enclosed materials are being provided solely to facilitate the prospective investor’s own due diligence for which it shall be fully and solely responsible. The material
contained herein is based on information and sources deemed to be reliable, but no representation or warranty, express or implied, is being made by Agent or Seller or any of
their respective representatives, affiliates, officers, employees, shareholders, partners and directors, as to the accuracy or completeness of the information contained herein.
Summaries contained herein of any legal or other documents are not intended to be comprehensive statements of the terms of such documents, but rather only outlines of
some of the principal provisions contained therein. Neither the Agent or the Seller shall have any liability whatsoever for the accuracy or completeness of the information
contained herein or any other written or oral communication or information transmitted or make available or any action taken or decision made by the recipient with respect to
the Property. Interested parties are to make their own investigations, projections and conclusions without reliance upon the material contained herein.
Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. Seller and Agent each
expressly reserves the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions
with any entity at any time, with or without notice. This offering is made subject to omissions, correction of errors, change of price or other terms, prior sale or withdrawal from
the market without notice. Agent is not authorized to make any representations or agreements on behalf of Seller.
Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing additional investigation and/or making an offer to
purchase the Property unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered, and approved by owner and any
conditions to owner’s obligations therein have been satisfied or waived.
By taking possession of and reviewing the information contained herein, the recipient agrees that (a) the enclosed materials and their contents are of a highly confidential
nature and will be held and treated in the strictest confidence and shall be returned to Agent or Seller promptly upon request; and (b) the recipient shall not contact employees
or tenants of the Property directly or indirectly regarding any aspect of the enclosed materials or the Property without the prior written approval of the Seller or Agent; and (c)
no portion of the enclosed materials may be copied or otherwise reproduced without the prior written authorization of Seller or Agent or as otherwise provided in the
Confidentiality and/or Registration Agreement executed and delivered by the recipient(s) to Grubb & Ellis Company.
44
1330 Post Oak Blvd.
Suite 1400
www.grubb-ellis.com
SOUTHWAY
Shop p ing Center

Shopping Center - George Cushing

Transcription

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