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2 8 7 5 E L E A G U E C I T Y P K W Y • L E A G U E C I T Y ( H O U S T O N M S A ) , T E X A SC O N F I D E N T I A L O F F E R I N G M E M O R A N D U M

PARKWAY COMMONS

• Stable financial returns from national tenants

• 100% tenant base resistant to e-commerce and internet

• Synergistic tenant base mostly catering to restaurant and service industries

• Shadow anchored by new HEB in the premier retail corridor of League City

• Adjacent Kroger location recently expanded due to increase demand and population growth in the area

• Affluent, well-educated surrounding residential population with average HH income north of $115,000 within 1, 3 and 5 mile radius

• Strong retail submarket fundamentals solidified by rising rental rates and positive annual net absorption for the last decade

• Brand new center with modern retail construction that possesses 75’ bay depths and 10’ floor to ceiling windows

• Houston ranked #1 in the country by NCREIF for 10-year retail investment returns

INVESTMENT HIGHLIGHTS

P A R K W AY C O M M O N S

2


PROPERTY SUMMARY FINANCIAL SUMMARY

YEAR 1 NOI: $541,439

WTD. AVERAGE REMAINING LEASE TERM: 7.3 Years

ROLLOVER SUMMARY Within 3 Years of Operation: 0.0% Within 5 Years of Operation: 33.9%

TENANT SUMMARY

LEASE EXPIRATION CHARTNOI GROWTH

$480,000

$500,000

$520,000

$540,000

$560,000

$580,000

$600,000

$620,000

$640,000

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10

RSF Expiring Cumulative % Expiring

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10

TENANT MIX

14%

19%

67%

REGIONAL LOCALNATIONAL

% of LeaseTenant NRA Property Start SegmentMOD Pizza 2,606 15.7% 11/1/2016 FoodDeca Dental 2,307 13.9% 7/1/2016 Professional ServicePure Barre 1,599 9.6% 11/1/2016 FitnessNail Salon 3,146 18.9% 6/1/2017 Personal ServiceClub Pilates 1,502 9.0% 1/1/2018 FitnessMenchies 1,437 8.6% 1/1/2017 FoodSports Clips 1,352 8.1% 3/1/2018 Personal ServiceProfile 2,690 16.2% 8/1/2018 Professional ServiceTotal Occupied GLA 16,639 100.0%

3

DEMOGRAPHICS 1-Mile Radius

3-Mile Radius

5-Mile Radius

POPULATION2023 Projection 5,591 70,908 150,8322018 Estimate 4,996 64,416 137,1252010 Census 3,794 51,461 110,9392000 Census 962 30,043 68,328Growth 2018 - 2023 Forecast 11.9% 10.1% 10.0%Growth 2010- 2018 31.7% 25.2% 23.6%Growth 2000 - 2010 294.4% 71.3% 62.4%2018 Est. Median Age 35.0 35.4 35.92018 Est. Average Age 35.5 35.8 36.2

HOUSEHOLDS2023 Projection 1,438 18,190 39,0422018 Estimate 1,302 16,645 35,7222010 Census 1,032 13,573 29,4862000 Census 262 8,044 18,270Growth 2018 - 2023 Forecast 10.5% 9.3% 9.3%Growth 2010- 2018 26.2% 22.6% 21.2%Growth 2000 - 2010 293.9% 68.7% 61.4%

EDUCATIONLess than 9th Grade 1.6% 3.2% 3.4%Some High School, No Diploma 2.9% 5.0% 4.8%High School Graduate (or GED) 19.8% 23.1% 20.7%Some College, No Degree 25.8% 23.3% 24.0%Associate's Degree 8.6% 8.8% 9.6%Bachelor's Degree 28.8% 25.2% 25.8%Master'S Degree 7.4% 7.8% 8.2%Professional Degree 2.3% 1.7% 1.9%Doctorate Degree 3.0% 1.9% 1.7%

ETHNICITYWhite 69.4% 70.3% 73.7%Black/African American 11.9% 10.7% 9.2%American Indian/Alaskan 0.5% 0.6% 0.5%Asian 8.3% 6.5% 6.0%Native Hawaiian/Pacific Islander 0.2% 0.1% 0.1%Some Other Race 6.0% 8.2% 7.1%Two or More Races 3.7% 3.8% 3.6%

INCOME2018 Est. Avg HH Income $117,418 $117,078 $120,9632018 Est. Median HH Income $100,045 $95,788 $96,861

HOUSING VALUE2018 Est. Median Housing Value $193,238 $199,735 $209,427

PROPERTY SUMMARY

LOCATION: 2875 E League City Pkwy League City, TX 77573

YEAR BUILT: 2016

NET RENTABLE AREA: 16,639

TOTAL LAND AREA: 2.5 Acres

OCCUPANCY: 100.0%

TRAFFIC COUNTS (VPD): SH 96: 30,135 South Shore Blvd: 8,680 Total: 38,815

PARKING RATIO 7.0/1,000 SF

SITE PLAN


4

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MENC

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League City, located between Houston to the Northwest and Galveston to the Southeast, began its residential boom in the early 2000’s when rising real estate costs began to drive the population outward from Houston’s city center. League City became a popular destination for young, educated families due to connectivity to the city via I-45 as well as nearby employment growth in aerospace (NASA), petrochemical, and medical industries began to surge. The area has seen an expansion that is unparalleled across the country with residential population growth within a 1-mile radius of the property reaching nearly 420% since 2000. Overall, families gravitate to League City because of a combination of good schools via Clear Creek Independent School District, low crime, college-educated neighbors, and access to amenities such as Kemah Boardwalk, NASA’s Johnson Space Center, Moody Gardens, and Galveston Island.

EDUCATIONThe Property is located in the Clear Creek Independent School District, which serves League City, Clear Lake, and some other neighboring parts of the Houston metropolitan area. The school district, which is the 29th largest in Texas, accounts for more than 41,000 students and 44 distinct campuses (5 high schools, 10 intermediate schools, 26 elementary schools, and 3 alternative campuses). With the continued growth and development of Master Planned Communities, the school district is poised to see increased student count and employment.League City does not only benefit from a State recognized school district, but also from a highly educated workforce. Overall, 42.5% of League City residents have attained at least their bachelor’s degree, compared to 28.1% in Texas and 30.3% nationally.

EMPLOYMENTLeague City has emerged as one of the healthiest job markets in the city, as its local demand drivers of the aerospace, petrochemical and health care industries were among the city’s leading areas of job growth and financial stability in 2015. The largest local employer, NASA’s Lyndon B Johnson Space Center (“JSC”), has 14,000 personnel with an average salary of $103,000. JSC’s workforce continues to grow as evidenced by a recent $4.2 billion Boeing contract win. The area health care industry is expanding as exemplified by the nearby UTMB League City campus hiring200 new medical professionals in 2017. Eventually 2.9 million square feet of space will be built on the 62-acre campus. Webster, a neighboring municipality referred to as the “Medical Center ofthe South”, has more than 25 medical facilities and a growing workforce of over 4,000. The Port of Houston and Houston Ship Channel is a major Houston MSA employer with 54,000 jobs andis undergoing $35 billion in improvements in anticipation of the Panama Canal expansion. The Houston Ship Channel is part of the U.S. Petrochemical Belt, where $90 billion of new plants areunderway that are not dependent upon oil prices.

88,979POPULATION

1,736/SQUARE MILEPOPULATION

DENSITY

86LIVABILITY SCORE,

12TH BEST IN TEXAS (AREAVIBES)

35MEDIAN AGE

*5-MILE RADIUS

5

George BushPark

LakeHouston

State Park

ArmandBayouPark

WilliamP. HobbyAirport

George BushIntercontinentalAirport

HARRISCOUNT Y

LIBER T YCOUNT Y

FOR T BENDCOUNT Y

MONTGOMERYCOUNT Y

BRAZORIACOUNT Y

GALVESTONCOUNT Y

Greenspoint

The Woodlands

69

69

69

Westpark Tollway

Katy Frwy

Southw

est F

rwy

Northwest Frwy

North Frw

y

Ea

stex

Frw

y

NorthLoop

LoopSouth

We

st L

oo

p

Ea

st L

oo

p

Sam Houston Tollway

Sam Houston Pkwy

ExxonMobilCorporate Headquarters

Pasadena Frwy

Baytown East Frwy

So

uth

Frw

y

Fo

rt

Pkw

y

Gulf Frw

y

Proposed

GrandPkwy

Proposed Grand Pkwy

Westheimer Rd

Beaumont Hwy

Ben

d

Grand Pkwy

LakeHouston

San Jacinto

Bay

SheldonReservoir

GalvestonBay

BayportTerminal

SmithersLake

ClearLake

Barbour’s CutTerminal

PARKWAYCOMMON S

CBD

EnergyCorridor

The GalleriaUptown District

Westchase

TexasMedical Center

Port of Houston


KEMAH BOARDWALK • 35-acre family-friendly boardwalk on Galveston Bay offering upscale dining, an aquarium,

and carnival rides that serves an estimated 3+ million visitors annually

GALVESTON ISLAND • 27 Mile long, 3 Mile wide island that is a popular vacation destination for Houstonians and

Texans alike due to beaches, Moody Gardens, dining and shopping options

MEDICAL CENTER OF THE SOUTH• Approximately 10% of Houston’s GDP ($50 billion) is healthcare related• Highest concentration of healthcare professionals in League City due to ease of

access to Texas Medical Center• Significant portion (10-15%) of local population in medical field• Texas Medical Center encompasses 45 million square feet and would be the 7th

largest US business district • $15 billion annual operating budget • 106,000 employees

PORT OF HOUSTON:• 1st in the U.S. in foreign waterborne tonnage• 1st in U.S. imports/exports• 2nd in total tonnage• Busiest container port on the Gulf Coast (the fastest-growing region in the U.S.)• Panama Canal and investment of $10 billion over the next 10 years will allow the

Port of Houston to maintain its status

NASA• South East Houston is home to the nation’s space exploration program• $1.5 billion, 1,620 acre that serves as mission control, research and astronaut

training for NASA that is home to Houston’s Smithsonian Affiliate Museum• NASA has an $18 billion annual budget• Johnson Space Center employs 14,000

PETROCHEMICAL:• Significant global demand for petrochemical products is feeding billions in

construction boom at east-side refineries and chemical plants • Houston Area Impact • +$100 billion capital investment • 30,000 construction jobs • 2,500 permanent jobs

PROXIMATE ATTRACTIONS

KEMAH BOARDWALK JOHNSON SPACE CENTER GALVESTON ISLAND

MISSION CRITICAL DEMAND DRIVERS THAT SPUR ECONOMIC AND POPULATION GROWTH IN THE SOUTHEAST REGION

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HIDDEN LAKESHIDDEN LAKESAVANA AT SOUTH SHORE APARTMENTSAVANA AT SOUTH SHORE APARTMENTS

TUSCAN LAKESTUSCAN LAKES

SOUTH SHORE BLVD | 8,680 VPD

SOUTH SHORE BLVD | 8,680 VPD

GRAND VILLAGE AT TUSCAN LAKES

GRAND VILLAGE AT TUSCAN LAKES

THE VILLAGE ATTUSCAN LAKESTHE VILLAGE ATTUSCAN LAKES

RAVELIO AT TUSCAN LAKES

RAVELIO AT TUSCAN LAKES

THE VILLAGEAT TUSCAN LAKES

THE VILLAGEAT TUSCAN LAKES

LEAGUE CITY PARKWAY | 30,135 VPD


Recipricol EasementRecipricol Easement

PARKWAYCOMMONS

The Godard School of League City

The Godard School of League City

League City Intermediate School

League City Intermediate School

Art and Pat Goforth Elementary SchoolArt and Pat Goforth Elementary School

Kiddie Academy of League City

Kiddie Academy of League City

Beacon Lakes Golf Club

Beacon Lakes Golf ClubBEACON LAKES

APARTMENTSBEACON LAKES APARTMENTS

Parr Elementary School

Parr Elementary School

I-45I-45

RETAIL MARKET STATISTICS

Inventory

• 2,146 Buildings

• 27,242,408 Total GLA

Vacancy

• 1,383,735 Direct SF

• 2,102,158 Total SF

• 5.1% Vacant

Net Absorption

• Q1 2018: 136,767 SF

• T-12: 604,909 SF

Deliveries

• Q1 2018: 22,730 SF

• T-12: 288,769 SF

Under Construction

• 8 Buildings

• 125,991 Total GLA

Rental Rates - New Class A Product

• $23.49 Avg. Quoted Rent

Inventory

• 25,865 Buildings

• 385,580,726 Total GLA

Vacancy

• 19,392,616 Direct SF

• 19,676,503 Total SF

• 5.1% Vacant

Net Absorption

• Q1 2018: 667,015 SF

• T-12: 5,138,334 SF

Deliveries

• Q1 2018: 1,124,040 SF

• T-12: 6,782,059 SF

Under Construction

• 207 Buildings

• 4,234,806 Total GLA

Rental Rates

• $17.25 Avg. Quoted Rent

HOUSTON MSALEAGUE CITY

HOUSTON RETAIL SUPPLY & DEMAND


8

BISHOPS BRIDGEBISHOPS BRIDGE

8,680 VPD8,680 VPD

STATE HIGHWAY 146STATE HIGHWAY 146

PARKWAYCOMMONS

CLEAR FALLSHIGH SCHOOLCLEAR FALLSHIGH SCHOOL

BAYSIDEINTERMEDIATE SCHOOL

BAYSIDEINTERMEDIATE SCHOOL

GALVESTON BAYGALVESTON BAY

WHISPERING LAKES RANCHWHISPERING LAKES RANCH

HIDDEN LAKESHIDDEN LAKES

AVANA AT SOUTH SHORE APARTMENTSAVANA AT SOUTH SHORE APARTMENTS

MAR BELLAMAR BELLA

MOSSMANELEMENTARY

MOSSMANELEMENTARY



SOUT

HSHORE BLVD

SOUT

HSHORE BLVD


TENANT PROFILES

MOD PIZZA• Size: 2,606 SF• www.modpizza.com

MOD was founded in 2008 by husband and wife, Scott and Ally Svenson, in their hometown of Seattle. MOD is the original superfast pizza experience – a pioneering fast-casual concept that puts the customer in the driver’s seat. Artisan-style pizzas and salads are individually sized, made on demand, and ready in just minutes. MOD has more than 330 locations in the United States and United Kingdom.

DECA DENTAL• Size: 2,307 SF• www.decadental.com

DECA Dental is the largest privately held dental company in the state of Texas. It currently owns and operates 15 separate Dental Brands with more than 70 locations . DECA Dental’s support center is located in Dallas, Texas. The company is rapidly growing and will be celebrating its 10th anniversary in 2018.

PURE BARRE • Size: 1,599 SF• www.purebarre.com

Pure Barre is the largest, most established barre franchise in the nation, with more than 460 studios throughout the U.S. and Canada, and more studios opening each month. Pure Barre is a total body workout that uses the ballet barre to perform small, isometric movements, which burn fat, sculpt muscles and create long, lean physiques. In July of 2009, Pure Barre became a franchise and has exploded in popularity, due to its extremely effective technique (which transforms the shape your body in record-breaking time); friendly, high-energy atmosphere; and fun, motivating music.

CLUB PILATES• Size: 1,502 SF• www.clubpilates.com

Club Pilates is the largest premium network of group Pilates studios in the world, with more than 600 locations slated to be open by the end of 2018. Ranked as the Fastest Growing Franchise in Inc. Magazine’s 2017 Inc. 5000 and 500, Entrepreneur Magazine’s 2018 Franchise 500 for the second year running, Club Pilates provides an established executive model and completely scalable business. Born in San Diego in 2007, Club Pilates has expanded across the nation, bringing Pilates to hundreds of thousands of people. In 2016, they offered over 2.2 million workouts to their members

MENCHIES• Size: 1,437 SF• www.menchies.com

Menchie’s Frozen Yogurt is an American frozen yogurt chain company founded in 2007 by Danna and Adam Caldwell and is based in the San Fernando Valley, California area. Menchie’s offers self-serve frozen yogurt with different choices of yogurt flavors and toppings. Menchie’s has over 540 locations and can be found in the United States, Puerto Rico, Canada, Japan, India, China, Bahrain, The Bahamas, England, Kuwait, United Arab Emirates, Kingdom of Saudi Arabia, and Qatar.

SPORTS CLIPS• Size: 1,352 SF• www.sportclips.com

Sports Clips has over 1,700 locations in the country and amongst the fastest growing franchising concepts in the nation. The first location opened in Austin, Texas in 1993. Today, Sport Clips is the only national hair care franchise with locations in all 50 states in the U.S., with more than 1,700 open in the U.S. and Canada.

PROFILE• Size: 2,690 SF• www.profileplan.com

Profile began in 2011 when Sanford Health CEO Kelby Krabbenhoft challenged the organization to create a weight loss program rooted in science and research. Sanford Health is an international integrated healthcare system that provides care for hundreds of communities across multiple continents. With 45 hospitals and 289 clinics worldwide, Sanford is one of the world’s largest healthcare providers. Profile was developed by some of Sanford’s top scientists, researchers, and physicians who were tasked with creating a healthy, safe, and personalized weight loss experience. A multidisciplinary team that including physicians, nutritionists, exercise scientists and clinical psychologists came together to determine what kind of weight loss program would best fit the needs of a diverse population. Profile now has tens of thousands of members reporting positive experiences with Profile.

10


The Houston economy has not only recovered from the recent oil crash, but is back in full growth mode. Houston added 46,000 jobs in 2017, driven by strong growth in professional and business services, education and health services, manufacturing and government. Additionally, 125,000 new residents migrated to Houston from July 2015 – July 2016 (2nd in the nation) and the Houston Business Cycle Index has grown an annualized 2.2%, suggesting growth in the economy as the city puts the oil

bust in its rearview mirror. As the nation’s fourth-largest metropolitan area is back on the rise, institutional and private groups have made significant investments in both downtown and the surrounding area. As the only major city in the US to have seen values reset from a downturn in the current cycle, investors have returned to Houston in a flurry to maximize their position in a growing economy. Office investment activity in 2017 was nearly 10 fold higher than that of 2016 totaling more than $4.5 billion.

Sources: Oxford Economics, Real Capital Analytics, HFF Research, *dots represent the 10 most liquid CRE o�ce markets over the past five years, according to RCA

10-YEAR POPULATION & EMPLOYMENT % GROWTH FORCAST | MAJOR U.S. METROS

AtlantaAtlantaBostonBoston

ChicagoChicago

Los AngelesLos Angeles

New York CityNew York City

San FranciscoSan Francisco

NATIONAL AVERAGE

SeattleSeattle

Washington DC Washington DC

0% 2% 4% 6% 8% 10%

12%

14%

16%

18%

20%

Dallas-Fort WorthDallas-Fort Worth

14%

12%

10%

8%

6%

4%

2%

0%

Empl

oym

ent

Population

HOUSTON

#1 POPULATION GROWTH AMONG U.S. METROS SINCE 2010(#2 in forecasted population growth through 2030)

#1 EXPORT MARKET IN THE U.S.

#1 JOB GROWTH AMONG U.S. METROS SINCE 2006(#1 in job growth over the last 12 months)

#3 AMONG U.S. CITIES WITH 46 FORTUNE 1000 COMPANIES HEADQUARTERED IN THE CITY

#3AMONG U.S. CITIES WITH 46 FOR-TUNE 1000 COMPANIES HEADQUAR-TERED IN THE CITY

128,700 JOBS ADDED IN THE TRAILING 12 MONTHS

94,417 NEW RESIDENTS FROM JULY 2016 THRU JULY 2017 (#2 in the U.S.)

$236,000 MEDIAN HOME VALUE AS OF AUGUST 2018

HOUSTON ECONOMIC OVERVIEW

45.8 MILLIONSF TEXAS MEDICAL CENTER, THE LARGEST MEDICAL COMPLEX IN THE

WORLD

#2IN THEATRE SEATS NATIONALLY, TRAILING ONLY BROADWAY

50,000 ACRESOF PARKS OFFER MORE GREENSPACE THAN ANY OTHER TOP 10 METRO

MOST FAVORABLEMETRO FOR SCIENCE, TECHNOLOGY, ENGINEERING, AND MATHEMATICS

WORKERS (STEM)

LEADING EXPORTERIN THE NATION DUE TO THE PORT OF HOUSTON

20+MUSEUMS, GALLERIES, AND CULTURAL CENTERS IN THE HOUSTON MUSEUM

DISTRICT

11

Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker (“HFF”).

©2018 Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, “HFF”), HFF Securities L.P. and HFF Securities Limited (collectively, “HFFS”) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and 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 to market it for sale. Information concerning the property 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.

I N V E S T M E N T A D V I S O R YRYAN WESTSenior Managing DirectorT. (713) [email protected]

JOHN INDELLIDirectorT. (713) [email protected]

JOHNNY KIGHTReal Estate AnalystT. (713) [email protected]

9 Greenway Plaza, Suite 700Houston, Texas 77046T. (713) 852-3500F. (713) 527-8725hfflp.com

F I N A N C I N GI N Q U I R I E S

KELLY LAYNEManaging Director

T. (713) [email protected]

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