houston, texas | executive summaryfederal east plaza
TRANSCRIPT
HOUSTON, TEXAS | EXECUTIVE SUMMARYFEDERAL EAST PLAZA
Located in a densely populated, fast-growing residential area with a population of 83,000 in a 3-mile radius
Residential growth underpinned by proximity to Port of Houston, Greens Port Industrial Park and the CBD
Immediate connectivity and visibility to one of Houston’s busiest freeways – Interstate 10 (123,000 VPD)
New roof installed in 2017/2018 on 75% of the Property
Loyal tenant base with average tenure of nearly 9 years at the property
50% of occupied NRA in the health industry (fitness, dental, dialysis)
Ample parking ratio of 7 / 1,000 SF - almost double the code requirements which will facilitate potential development
Ability to increase NOI by capitalizing on lease-up, embedded rent growth and development opportunities
Located minutes from Houston’s Port and Industrial facilities
Federal Road is the only North/South artery between Beltway 8 and Loop 610.
Offered free and clear of debt so investors can take advantage of historically accretive financing options
INVESTMENT HIGHLIGHTS
FINANCIAL SUMMARYYear 1 NOI: $1,094,304 Wtd. Average Tenure: 8.8 YearsWtd. Average Remaining Lease Term: 5.5 Years5-Year CAGR: 6.62%10-Year CAGR: 4.06%Percent Below Market: 17.27%Rollover Summary Within 3 Years of Operation: 10.6% Within 5 Years of Operation: 54.9%
PROPERTY DASHBOARD
NET OPERATING INCOME - DEPENDABLE GROWTH
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
$1,500,000
$1,600,000
Year 1 Year 2 Year 3 Year 4 Year 6Year 5 Year 7 Year 8 Year 9 Year 10
6.62% CAGR 4.06% CAGR
TENANT MIX LEASE EXPIRATIONSDiversified Tenant Composition
National Regional Local
PROPERTY SUMMARYLocation: 12032 East Fwy
Houston, TX 77029I-10 East
Year Built: 1977 (2017 Renovation)Parking Ratio: 7.05/1000 SFNet Rentable Area: 93,323Land Area: 13.32 AcresOccupancy: 93.0%Traffic Counts: I-10: 123,000 VPD
Market St.: 10,600 VPDTotal: 133,600 VPD
TENANT SUMMARY
Tenant OccupiedSF
% ofProperty Tenure
Fitness Connection 33,589 36.0% 11.5 Years Boot Barn 13,250 14.2% 1.4 Years Dot Coffee Shop 11,030 11.8% 4.6 Years Blue Bayou Cafe 6,689 7.2% 8.8 Years Fresenius 6,651 7.1% 0.6 Years Avenue Stores 4,510 4.8% 25.9 Years Bello Amanecer 3,504 3.8% 4.5 Years South Texas Dental 3,200 3.4% 21.6 Years Armstrong McCall Beauty Supply 2,000 2.1% 0.3 Years H&R Block 1,408 1.5% 25.4 Years Texas Management Division 992 1.1% 6.3 YearsTotal Leased 86,823 93.0% 8.8 YearsTotal Vacant 6,500 7.0%Total Property Size 93,323
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Year 1 Year 2 Year 3 Year 4 Year 6 Year 7 Year 8 Year 9 Year 10
RSF Expiriing Cumulative % Expiring
3
Though stable, investors have opportunity to
expand the center and create value
• 4 Points of ingress/egress from the Interstate-10 (East Freeway) service road provide easy access to the shopping center
• Selling the restaurant pads will allow for a reduced basis
• Develop additional strip or junior anchor retail in Southwest Corner
• 7 / 1,000 SF Parking Ratio - $1.2 million of capital improvements spent on the parking lot ($450 k) and new roof(s) ($750 k)
• Visibility of Dot and Blue Bayou Cafe draw customers to the center
• Destination retail drivers from Fresenius Health and Fitness Connection
Interstate Highway I-10 | 312,000 VPD
Frontage Road
Access to Market Street R
oad
2,000
SF
11,030 SF
13,250 SF3,200SF
33,589 SF
6,689 SF4,500 SF
TMD
Temp
sTM
D Te
mps
H&R
Bloc
k
4,510
SF
BelloAmanecer3,504 SF
FreseniusHealth
6,651 SF
Pylon
New Roof
Arms
trong
McC
all2,0
00 S
FAr
mstro
ng M
cCall
2,000
SF
FITNESS
SITE PLAN
4
Market Street Road
Market Street Road
Downtown HoustonDowntown Houston
Jacinto CityElementary School
Jacinto CityElementary School
MARKET @ HUNTING BAYOU
1-10 East BoundExit Ramp
1-10 East BoundExit Ramp
55
WEST FACING AERIAL
Market Street Road
Market Street Road
Greens Port(7 minutes)Greens Port(7 minutes)
Houston Ship Channel(10 minutes)
Houston Ship Channel(10 minutes)
Access to Market Street Rd
Access to Market Street Rd
1-10 East BoundOn Ramp1-10 East BoundOn Ramp
1-10 East BoundExit Ramp1-10 East BoundExit Ramp
EAST FACING AERIAL
PLEASANTVIEW
$50K-170K HOME VALUE
PLEASANTVIEW
$50K-170K HOME VALUE
DOWNTOWN10 MINUTES WEST
DOWNTOWN10 MINUTES WEST
FED EAST PLAZA
CLINTONPARK
$30K-160K HOME VALUE
CLINTONPARK
$30K-160K HOME VALUE
GALENAPARK
$50K-250K HOME VALUE
GALENAPARK
$50K-250K HOME VALUE
GREENSPORT
INDUSTRIALPARK
GREENSPORT
INDUSTRIALPARK
PORT OF
HOUSTON
PORT OF
HOUSTON
JACINTOCITY
$95K - $160K HOME VALUE
JACINTOCITY
$95K - $160K HOME VALUE
NORTHSHORE$80K - $250K HOME VALUENORTHSHORE$80K - $250K HOME VALUE
RIVIERA EAST$100K - $450K HOME VALUERIVIERA EAST$100K - $450K HOME VALUE
Federal East Plaza is situated between the CBD and the Port of Houston, two of the city’s largest employment districts. With 83,000 residents in a three mile radius earning an average household income of $52,300, the locally/regionally focused tenant base ideally caters to the surrounding population.
RESIDENTAL AND DEMOGRAPHIC OVERVIEW
DEMOGRAPHICS 1-MILE 3-MILE 5-MILE
Population 18,160 83,141 186,294
2010 Population 15,151 75,628 170,758
Growth Since 2010 19.9% 9.9% 9.1%
Expected Growth (5 Years) 8.5% 6.7% 6.5%
Average HH Income $48,033 $52,276 $56,066
SURROUNDING DEMOGRAPHICS
7
8
NEARBY RESIDENTIAL POPULATION
• Diverse economic population earning $52,000+ annually that
is underpinned by the Port of Houston, Greens Port Industrial
Park and the CBD.
• Situated in North Channel area of Houston, which has a
population of more than 186,000 residents
• 20% population growth since 2010 within a mile of Fed East
as nearby employment continues to expand
STRONG EMPLOYMENT FUNDAMENTALS
• Recent $77 billion investment in downstream petrochemical
development expected to add thousands of jobs
• Nearby Port of Houston is one of the largest in the world,
making the city the largest exporter in the nation
• Commitment to petrochemical and port expansion in the area
expected to fuel retail spending in East Houston
RETAIL CORRIDOR
• Tight retail corridor along I-10 between I-610 and Beltway 8
with 90% average occupancy
• No retail currently under construction, leaving existing
centers to serve the rapidly growing population
George BushPark
LakeHouston
State Park
WilliamP. HobbyAirport
George BushIntercontinentalAirport
HARRISCOUNT Y
LIBER T YCOUNT Y
FOR T BENDCOUNT Y
MONTGOMERYCOUNT Y
BRAZORIACOUNT Y
GALVESTONCOUNT Y
GreenspointGreenspoint
The WoodlandsThe Woodlands
69
69
69
LakeHouston
San Jacinto
Bay
SheldonReservoir
GalvestonBay
BayportTerminal
SmithersLake
ClearLake
Barbour’s CutTerminal
CBDCBD Port of HoustonPort of
Houston
EnergyCorridorEnergyCorridor
The Galleria
The GalleriaWestchaseWestchase
Fed East Plaza
TRADE AREA DRIVERS
EAST HOUSTON
The Federal East Shopping Center is located in the rapidly growing East Houston/Pasadena area. Home
to the Port of Houston and the North Channel, this area is the heart of the Gulf Coast petrochemical and
refining sector. Due to a recent $77 billion investment in downstream petrochemical development, there
is an expected job growth of over 265,000 new jobs in the upcoming few years. Downstream energy
production is less volatile in times of oil economic distress than upstream production and therefore is
reflective of a more stable job market for workers in that sector. The consumer base in East Houston has
grown with the area and now has over $2.7 billion in annual retail expenditures. Located right off I-10 with
easy access to downtown and all of East Houston, Federal East Center is situated in a prime location to
take advantage of these consumers.
PORT OF HOUSTON
The Port of Houston is one of the busiest ports in the world and a vital component of Houston’s economy.
With more than 241 million tons of cargo moving through annually, it is considered 1st in the U.S. in foreign
waterborne tonnage and 2nd in the U.S. in total tonnage. High volumes of foreign vessels from over 1,000
ports around the world have helped Houston develop into the global economy it is today. Additionally,
Houston Ship Channel businesses contribute 1,174,567 jobs throughout the state, helping create more
than $264.9 billion in statewide economic impact. East Houston is the gateway from the Port to Downtown
Houston and to the entire state, perfectly positioned to capitalize on the economic growth that will
inevitably continue to grow throughout the area.
EAST HOUSTON PASADENA OVERVIEW
Port of HoustonPort of HoustonKinder morgantexas terminalKinder morgantexas terminal
GE EnergyGE EnergyHoustonShip ChannelHoustonShip Channel
Brown ShipbuildingIndustrial parkBrown ShipbuildingIndustrial park
Texas Terminal LPTexas Terminal LP
FED EAST PLAZA
The Market atHunting Bayou
12001 East FreewayShopping Center
10-FederalShopping Center Northshore
Shopping Center
woodforestShopping Center
The Shopsat stone park
9
WOODFOREST SHOPPING CENTER
Sqft: 112,985Drive Distance: 4.9 milesTenants: DD’s Discounts, Palais Royal, Cici’s Pizza, Advance Auto Parts, Rainbow Shops
THE MARKET AT HUNTING BAYOU
Sqft: 238,502Drive Distance: .5 milesTenants: Tinseltown, 24 Hour Fitness, Chili’s, Goodwill, Marble Slab Creamery
12001 EAST FWY
Drive Distance: 1.2 milesTenants: Fiesta Mart, Baby Depot, Burlington Coat Factory, Family Thrift Center, Cricket
10-FEDERAL SHOPPING CENTER
Sqft: 132,472Drive Distance: 1.9 milesTenants: Sellers Bros, Palais Royal, Citi Trends, Casa Ole and Harbor Freight Tools
NORTHSHORE EAST SHOPPING CENTER
Sqft: 230,779Drive Distance: 3.2 milesTenants: Sellers Bros, Melrose, Conn’s, Dollar Tree, Rent-A-Center
THE SHOPS AT STONE PARK
Sqft: 250,000Drive Distance: 8.1 milesTenants: JCPenney, Marshalls, Party City, Staples, Best Buy
10
COMPETITIVE PROPERTIES
INVESTMENT SALES
RYAN WEST
Senior Managing Director
T. (713) 852-3535
JOHN INDELLI
Director
T. (713) 852-3407
CHARLIE STRAUSS
Real Estate Analyst
T. (713) 212-6574
HFF HOUSTON
9 Greenway Plaza, Suite 700
Houston, Texas 77046
T. (713) 852-3500
F. (713) 527-8725
hfflp.com
DEBT INQUIRIES
MICHAEL JOHNSON
Director
T. (713) 852-3474
Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker (“HFF”).
©2017 HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.
HFF has been engaged by the owner of the property [properties] to market it [them] for sale. Information concerning the property [properties] described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.