north loop 104 · interstate 10. the district is home to many of san antonio’s most popular...

OFFERING MEMORANDUMSAN ANTONIO, TEXAS

Holliday Fenoglio Fowler, L.P. (“HFF”) a Texas licensed real estate broker.

N O R T H LO O P 16 04

This Offering Memorandum has been prepared by HFF for use by a limited number of recip-ients. All information contained herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, expressed or implied, as to the accuracy or complete-ness of the information contained herein. Further, the Offering Memorandum does not con-stitute a representation that no change in the business or affairs of the property or the Owner has occurred since the date of the preparation of the Offering Memorandum. All analysis and verification of the information contained in the Offering Memorandum is solely the responsibil-ity of the recipient. HFF and Owner and their respective officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon or relate to the use of the information contained in this Offering Memorandum.

Additional information and an opportunity to inspect the property will be made available upon written request to interested and qualified prospective investors.

Owner and HFF each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice. Owner shall have no legal commitment or obligations to any recipient reviewing this Offering Memorandum or making an offer to purchase the prop-erty unless and until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

The recipient (“Recipient”) agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum, which is a matter of public record, or is provided from sources available to the public (b) the Recipient, the Recipient’s employees, agents and consultants (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the need to know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of HFF and the Owner, and (c) the Recipient and the need to know parties will not use or permit to be used this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner or HFF or for any purpose other than use in considering whether to purchase the property. The Recipient and the need to know parties agree to keep this Offering Memoran-dum and all confidential information contained herein permanently confidential and further agree to use this Offering Memorandum for the purpose set forth above. If the Recipient has no interest in the property, or if in the future the Recipient or owner discontinue such negotiations, the Recipient will return this Offering Memorandum to HFF.

DISCLAIMER

2

CONTACT

CONTENTSEXECUTIVE SUMMARY 5

INVESTMENT HIGHLIGHTS 7

PROPERT Y OVERVIEW 11

LOCATION OVERVIEW 14

MEDICAL OFF ICE MARKET

OVERVIEW 18

FAR NORTHWEST RETAIL

MARKET OVERVIEW 20

ECONOMIC OVERVIEW 24

Drew FullerDirectorT: [email protected]

John TaylorManaging DirectorT: [email protected]

Joshua Villarreal AnalystT: [email protected]

Dom EspinosaAnalystT: [email protected]

Chris McColpinSenior DirectorT: [email protected]

Debt Contact

3

EXECUTIVE SUMMARYHFF is pleased to offer the opportunity to purchase 5431 N Loop 1604 (the “Property”), a 7,225-square-foot medical office/retail building in the Far Northwest submarket of San Antonio. The Property benefits from outstanding access to Interstate 10 and Loop 1604 with unrivaled proximity to affluent neighborhoods and districts such as The Rim, La Cantera, and the Dominion. Currently vacant, 5431 N Loop 1604 represents a rare buying opportunity for owner-occupants and opportunistic investors. The superior location and brand new construction combine to make the Property an attractive opportunity for a wide variety of uses.

PROPERTY SUMMARY

Asking Price $2,900,000 ($401 PSF)Address 5431 N Loop 1604 West

San Antonio, Texas 78249Submarket Far NorthwestBuilding Size 7,225 SFYear Built 2016# of Stories OneParking 6.00/1,000 NRSF

(44 free surface spaces)Site Area 1 AcrePrevious Use Freestanding Emergency ClinicZoning MPCD - Master Planned Community

DistrictEZRD - Edwards Aquifer Recharge ZoneGC-1 - Hill Country Gateway CorridorUC-1 - Urban Corridor

Note: Existing medical equipment onsite not included in purchase price, contact broker to discuss availability.

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EXECUTIVE SUMMARY

5

San AntonioInternational Airport

Camp BullisMilitary

Reservation

STONE OAKSTONE OAKTHE

DOMINIONTHE

DOMINION

FAIROAKSFAIROAKS

CROSSMOUNTAIN

CROSSMOUNTAIN

ALAMO HEIGHTSALAMO

HEIGHTSALAMO QUARRY

MARKETALAMO QUARRY

MARKET

NORTHSTARMALL

NORTHSTARMALL

CASTLEHILLS

CASTLEHILLS

HUEBNER OAKSSHOPPING CENTER


WESTOVERHILLS

WESTOVERHILLS

THE RIMTHE RIMTHE SHOPS AT LA CANTERA

THE SHOPS AT LA CANTERA

SOUTH TEXASMEDICAL CENTER

(STMC)

281

281

281


6

San AntonioInternational Airport

Camp BullisMilitary

Reservation

STONE OAKSTONE OAKTHE

DOMINIONTHE

DOMINION

FAIROAKSFAIROAKS

CROSSMOUNTAIN

CROSSMOUNTAIN

ALAMO HEIGHTSALAMO

HEIGHTSALAMO QUARRY

MARKETALAMO QUARRY

MARKET

NORTHSTARMALL

NORTHSTARMALL

CASTLEHILLS

CASTLEHILLS



WESTOVERHILLS

WESTOVERHILLS

THE RIMTHE RIMTHE SHOPS AT LA CANTERA

THE SHOPS AT LA CANTERA

SOUTH TEXASMEDICAL CENTER

(STMC)

281

281

281


OUTSTANDING LOCATION IN AFFLUENT, HIGH GROWTH AREA• Located in Northwest San Antonio along the access road of North

Loop 1604 less than half a mile from the intersection of Interstate 10 which sees an average of over 250,000 VPD.

• Average Household income of $96,373 and population of 190,000 within a 5-mile radius of the property.

• Projected population growth of 11% over the next 5 years (within 3 miles).

• Located on the south side of The Rim, a major regional mixed-use development comprised of 1,750 residential units and over 1.8M square feet of retail, restaurants, and entertainment.

RARE OWNER-OCCUPANT OR INVESTOR PURCHASE OPPORTUNITY• Currently vacant, the property presents the opportunity for an owner-

occupant to purchase for their own business, or for an investor to re-tenant or repurpose.

• Highly visible pylon sign and exterior building signage available.

• The Property is currently zoned under The Rim’s Master Planned Community District zoning (MPCD), with commercial zoning (C-3) allowing for a variety of potential uses, some of which include: • Restaurant• First Class Pub• Medical Clinic• Retail• Bank• Office • Studio

HIGHLIGHTS

7

BRAND NEW HIGH-QUALITY CONSTRUCTION• Building completed in 2016 with high-end finishes and state-of-the-art

medical build-out.

• New HVAC systems, parking lot, roof, plumbing and generator reduce the need for near-term capital expenditures.

• Move-in ready finish-out for medical users due to pristine condition.

STRONG GROWTH METRICS IN SAN ANTONIO MARKET• San Antonio is an attractive choice for new and expanding companies

due to its central geographic location, economic stability, financial incentives and growing workforce.

• Boasting an unemployment rate of 3.4%, well below both the national and Texas rates, the metro’s healthy job market is credited to the diversity of the region’s industries – a portfolio of well-established financial services, flourishing biomedical and biotech sectors, energy, manufacturing, military, and a rapidly growing IT and cybersecurity field.

• With cost of doing business 20% below the national average and cost of living 14.6% below the national average, businesses and people throughout the country are relocating to San Antonio.

• San Antonio is projected to see 10% population growth in the next five years and poised to grow its population by 57.3% to over 4 million residents by 2040.

• San Antonio ranked #3 in the U.S. in GDP growth between 2011-2016 with 30.5% growth experienced. Beyond that span, San Antonio has averaged 5.5% annual GDP over the last decade. A trend that is expected to continue.

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GENERAL INFORMATIONSITE AREA 1 acreZONING MPCD - Rim Master Planned District

EZRD - Edwards Aquifer Recharge Zone GC-1 - Hill Country Gateway Corridor UC-1 - Urban Corridor

PARKING 6/1,000 parking ratio (43 surface spaces including 3 HC)DESIGN & CONSTRUCTIONSTRUCTURE Type II-B concrete slab, steel structureROOF Flat TPO (White), Sloped to internal drains at min. 1/4 per footCEILING HEIGHTS Vary - 9’ - 11’ ceiling heights. 21’ at Nurse Station ClearestoryEXTERIOR Combination of Exterior Insulation Finish System (EIFS) and 4”

thick natural Stone, Insulated Glazing/Aluminum Storefront

Aluminum Sunshades at select windows, Steel Doors/Frames at Service Areas

INTERIOR Combination of Luxury Vinyl Tile (LVT) used in Waiting Rooms, Treatment Rooms, main Corridor system and Accessory Rooms off Nurse Station. Vinyl Composition Tile (VCT) used at Support Rooms including Storage Rooms and Lab. Sheet vinyl (SV) used at Control, Xray and CT Rooms. Porcelain Tile (PT) used on floors and as wainscot at all Toilets. Rubber base used throught with corner guards/wall protection in corridors and headwalls of Treatment Rooms. Plastic Laminate cabinetry used throughout with Solid Surface upper counters at Reception and Nurse Station.

BUILDING SYSTEMSHVAC 5 Rooftop units and 2 split systems. Total tonnage = 32 tons approximateELECTRICAL 600 amps service from utility. 250kw/312kva natural gas generator. 460/277

3-ph 4wPLUMBING Copper water supply. Waste system specified as PVC below grade Cast iron

above grade. Vent system specified as cast iron. Medical gas and vacuum shall be hard-drawn seamless copper medical gas tubing astm b 819

FIRE LIFE SAFETY The building is fully protected by a wet-pipe sprinkler system and fire alarm system which includes smoke detectors, alarms, strobes, extinguishers, pull stations, alarm panel, and exit signs.

SECURITY Tenant controls leased spaceUTILITIES Electric: City of San Antonio

Water/Sewer: SAWS Telephone/Fiber: AT&T/Spectrum

10

PROPERTY OVERVIEW

11

0 2' 3' 4'1'

Graphic Scale: 1 inch = 1 feet

SITE PLAN

N LOOP 1604 ACCESS ROAD

FLOOR PLAN

13

LA CANTERA DISTRICTIs a 1,700-acre master-planned development and district on the Northwest side of San Antonio located west of The Rim across Interstate 10. The district is home to many of San Antonio’s most popular attractions such as Six Flags Fiesta Texas, The Shops at La Cantera, and two world class golf courses, The Palmer Course and La Cantera Resort Course.

SIX FLAGS FIESTA TEXAS (Located 2-miles from Property) A 200-acre amusement park that opened in March of 1992 and was the first business in the now bustling La Cantera District of San Antonio. Fiesta Texas is popular for its renowned rollercoasters such as The Scream and Iron Rattler, and its variety of live shows and firework displays.

THE SHOPS AT LA CANTERA (Located 2.6 miles from Property)Home to more than 150 shops and restaurants across 1.3 million square feet. The Shops at La Cantera is an open-air regional shopping mall that is one of the most popular shopping centers in San Antonio. Comprised of two phases of development, the shopping mall has added residential units as well as Class A Office to its composition.

THE PALMER COURSE (Located 5-miles from Property)Home to the annual Valero Texas Open on the PGA Tour.

LOCATION OVERVIEW

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LOCATION OVERVIEW

THE RIM (Located 1.5-miles from Property)With over 1.8 million square feet of retail, restaurants, and entertainment combined with hotels, corporate headquarters, and 1750 residential units. The master planned mixed-use development is one of San Antonio’s most desirable locations to live, work, and play.

VALERO ENERGY HEADQUARTERS (Located 2-miles from Property)A 670,000 square foot office campus home to over 1,600 employees.

THE UNIVERSITY OF TEXAS AT SAN ANTONIO – MAIN CAMPUS (Located 2.2 miles from Property)Comprised of nearly 31,000 students, UTSA is the largest university in San Antonio and the 8th largest in the State of Texas.

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EILAN194K SF Retail ■ 539 Units ■ 156 Keys


THE SHOPS AT LA CANTERA1.3M SF Retail ■ 623 Units ■ 498 Keys THE SHOPS AT LA CANTERA1.3M SF Retail ■ 623 Units ■ 498 Keys

136,000+ VPD

126,000+ VPD

116,000+ VPDThe Residences

AT LA CANTERAThe Residences

AT LA CANTERA

Celeste AT LA CANTERACeleste

AT LA CANTERA

Hill Country Resort& Golf Course

THE RIM1.8M SF Retail ■ 998 Units ■ 128 Keys


Mira Vista

Landmark Grandview

Marquis at the Rim

Villas at the Rim

The Dominion

5431 N Loop 1604 W

Valero Energy HQ

DEMOGRAPHICS1-Mile Radius

3-Mile Radius

5-Mile Radius

Population (2017) 832 56,946 189,877Population Growth 2017 – 2022 13% 11% 9%2022 Projected Population 942 62,952 207,848Average Household Income $83,249 $89,916 $96,373Median Housing Value $290,245 $224,369 $228,439

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THE SHOPS AT LA CANTERA1.3M SF Retail ■ 623 Units ■ 498 Keys THE SHOPS AT LA CANTERA1.3M SF Retail ■ 623 Units ■ 498 Keys

136,000+ VPD

126,000+ VPD

116,000+ VPDThe Residences

AT LA CANTERAThe Residences

AT LA CANTERA

Celeste AT LA CANTERACeleste

AT LA CANTERA

Hill Country Resort& Golf Course



Mira Vista

Landmark Grandview

Marquis at the Rim

Villas at the Rim

The Dominion

5431 N Loop 1604 W

Valero Energy HQ

2MINUTES

THE RIM

DOWNTOWN

3MINUTES

LA CANTERA

10MINUTES

STONE OAK

15MINUTES

20MINUTES

SAN ANTONIO INTERNATIONAL AIRPORT

12MINUTES

SOUTH TEXAS MEDICAL CENTER

DRIVE TIMES

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SAN ANTONIO MEDICAL OFFICE MARKET

INVENTORYApproximately 14.2 million square feet of space across 921 buildings (single and multi-tenant) as of Q1 2018.

ABSORPTIONThe medical office market has maintained positive net absorption year over the past decade and has experienced approximately 2.3 million square feet of positive net absorption since the beginning of 2009.

OCCUPANCYThe current occupancy rate in the San Antonio medical office market is a healthy 88.2%.

Due to steady employment growth in the medical sector, which now employs 1 out of 6 San Antonio workers, and strong market fundamentals, the San Antonio medical office market has averaged an occupancy of 88.4% since 2009, with occupancy levels never dipping below 87.5%.

RENTAL RATESThe current quoted rental rate for all classes of San Antonio medical office space is $21.64 per square foot gross, reflecting a 14% growth from $19.00 per square foot in 2009.

MARKET OVERVIEW

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NORTHWEST SAN ANTONIO MEDICAL OFFICE MARKET

INVENTORYThe Northwest San Antonio medical office market encompasses 309 single and multi-tenant buildings with approximately 6.2 million square feet of space.

ABSORPTIONDemand for medical office has increased since the start of 2016. Approximately 350,000 square feet of new medical office product was delivered, while absorption outpaced deliveries with nearly 450,000 square feet of positive net absorption.

Since 2009, Northwest San Antonio has experienced 1.2 million square feet of positive net absorption for medical office.

OCCUPANCYThe Northwest San Antonio medical office submarket has remained remarkably stable over the last several years averaging 88.5% occupancy since 2010.

Current occupancy stands at a healthy level of 88.7% despite nearly 1.1 million square feet of delivery since 2013 (over 17% of the total market). With approximately 55,000 square feet of new construction underway and increasing demand, occupancy levels are expected to continue to climb.

RENTAL RATESRental rates for medical office in Northwest San Antonio have increased 31%, from $16.22 per square foot gross in 2009 to $21.31 per square foot gross today.

Medical office in Northwest San Antonio averages the highest renal rates in the entire San Antonio market.

MARKET OVERVIEW

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RETAIL MARKET OVERVIEW

20

$26

$24

$22

$20

$18

$16

$14

$122012 2013 2014 2015 2016 2017 2018 YTD

San Antonio North Central Far Northwest CBD

FAR NORTHWEST NNN RETAIL RATES COMPARISON

NORTHWEST RETAIL RENTAL RATESCurrently Far Northwest NNN retail rental rates are the second highest in San Antonio behind the CBD at $24.00 per square foot. Over the last decade, the Far Northwest submarket has consistently performed as a top submarket for NNN retail rates.

Since 2012, the Far Northwest submarket has experienced 13.2% NNN rental rate growth, from $21.20 per square foot in 2012 to $24.00 per square foot currently, outpacing the overall market’s NNN rental rate growth of 6.4% during the same period.

Steady rental rate growth in the Far Northwest submarket will be driven by the continued growth in one of the fastest growing areas in San Antonio.

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FAR NORTHWEST RETAIL MARKET INVENTORY/ABSORPTIONWith proximity to upscale neighborhoods and an affluent population, Far Northwest San Antonio has developed a thriving retail market that is driven by basic economic factors including rapid population growth.

The Far Northwest retail submarket has been the fastest growing retail submarket in San Antonio over the last decade, expanding its retail inventory by 52% from 2007 to present day with 3.3 million square feet of new deliveries, as well as 3.3 million square feet of net absorption.

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80%

85%

90%

95%

100%

0

$70,000

$140,000

$210,000

$280,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD

Absorption Completion Occupancy

FAR NORTHWEST RETAIL OCCUPANCY & ABSORPTIONOccupancy has remained stable in the Far Northwest Submarket despite it doubling its inventory since 2007, averaging a very strong 96% annual occupancy since 2007.

Current Far Northwest occupancy is 97.5%, which is above the overall San Antonio’s retail market occupancy of 96.3%.

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ECONOMIC OVERVIEW

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SAN ANTONIO Commonly known as “the heart of Texas”, San Antonio has consistently led the nation in economic growth and stability over the last several years. Among Texas’s “big four” metro areas — Houston, Dallas, Austin and San Antonio — there is a rejuvenated buzz about the Alamo City. Building upon its rich history and authentic culture, San Antonio stands out as an opportunity city celebrated for its attractive quality of life, emerging culinary and arts scene and affordable cost of living.

DIVERSE ECONOMYHome to five Fortune 500 companies, San Antonio boasts a broad industry portfolio that continues to expand, with the local construction, trade and healthcare service sectors seeing the highest job growth in 2017. New business strengths have emerged over the last five years, including technology, financial services, manufacturing, and information systems. These new ventures have diversified San Antonio’s economy and provide a safeguard for the local economy. With business costs nearly 20% below the national average, the San Antonio MSA is also one of the five least expensive metros in the U.S. to do business, attracting many startups and corporate relocations in recent years. Consistently named one of the best markets for job seekers, the San Antonio metro area has enjoyed steady employment growth over the past several years and its unemployment levels rank near the lowest in the state. According to Oxford Economics, San Antonio has seen economic growth of 5.5% per year over the last 5 years, landing a spot in the top 5 growth metro’s in the country. Employment growth in San Antonio is forecasted to average nearly 2.0% annually through 2021. San Antonio continues to be one of the most attractive metros in the country due to its exceptional economic and population growth, low business and living costs, central geographic location and versatile transportation infrastructure.

Financial Services

Movie &TV streaming

Customer ExperienceOutsourcing

400JOBS

1,500JOBS

500JOBS

OVERALL COST OF EXPENSES

RELOCATIONS & EXPANSIONSRECENT ANNOUNCEMENTS

22.4 11.2%MINUTES THAN NATIONAL AVERAGE

SHORTER

AVERAGE COMMUTE

BELOW NATIONAL AVERAGE

-14% -20%

BUSI

NESS

LIVI

NG

25

INTERNATIONAL TRADE CENTER San Antonio is the center of economic activity and commerce in South Central Texas, located about 140 miles north of the Gulf of Mexico and 70 miles south of Austin. The Alamo City is positioned at the crossroads of several interstate highways and railroads serving both coasts, and enjoys a prime position along the NAFTA corridor. With strong cultural and economic ties to Mexico, San Antonio is an international trade center as more than 50% of the goods traveling between Mexico and the United States flows through San Antonio. Additionally, the logistical functionality of San Antonio is enhanced through Port San Antonio, a massive (1,900-acre) multimodal logistics hub and industrial complex that caters to multinational firms such as Boeing, Lockheed Martin and Xerox, as well as federal and state government agencies.

POPULATION TRENDSThe San Antonio MSA has a population of more than 2.4 million residents, making it the third largest metro in the Lone Star State and the 25th largest in the United States. As one of the largest cities in America, San Antonio’s flourishing economy continues to grow as young professionals and businesses are taking notice of its opportunities. San Antonio is poised to experience rapid growth in the next 25 years, increasing 57.3% to nearly 4 million people by 2040. In 2017, San Antonio topped the Census Bureau’s List of “Fastest-Growing Large Cities” with the largest population gains in the United States. Milken Institute also named San Antonio among its Top 25 list of Best-Performing Cities in 2017 based on the city’s booming economy and robust population growth. San Antonio’s population grew 1.9% in 2017 and is forecasted to increase by 9% over the next five years – almost double the U.S. average. As such, the metropolitan area is projected to add more than 230,000 people over the next five years.

EMPLOYMENT TRENDSSan Antonio’s employment trends are keeping pace with local population growth. Consistently named one of the best markets for job seekers, the San Antonio metro area has enjoyed steady employment growth and low unemployment levels over the past several years. San Antonio’s unemployment consistently ranks near the lowest in the state. The current rate of 3.5% compares favorably to the Texas and national unemployment rates of 3.9% and 4.1%, respectively. While San Antonio’s economy has historically been rooted in “eds, feds and meds” – with a high concentration of education, government and healthcare jobs – recent job growth in the market has spanned a diverse group of industries. The local construction, financial activity, and tech sectors have seen significant growth. Oxford Economics forecasts employment growth in San Antonio will average 1.7% annually through 2020, significantly higher than the projected US average employment growth rate of 1.05%

85,000JOBS

+

2.0% GROWTH10TH

LOWESTIN U.S.

UNEMPLOYMENT

ANNUALLY THROUGH 2021

EMPLOYMENT

POPU

LATI

ON G

ROW

TH

#1 IN POPULATION GROWTH 2017Source: U.S. Census Bureau

26

HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference 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 purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.

CONTACT

Drew FullerDirectorT: [email protected]

John TaylorManaging DirectorT: [email protected]

Joshua Villarreal AnalystT: [email protected]

Dom EspinosaAnalystT: [email protected]

Chris McColpinSenior DirectorT: [email protected]

Debt Contact


north loop 104 · interstate 10. the district is home to many of san antonio’s most popular...

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