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BRIAR GROVE

INVESTMENT OFFERING

17855 N. Dallas Parkway | Dallas, Texas


TABLE OF CONTENTS

4

EXECUTIVE SUMMARY

10

PROPERTY DESCRIPTION

18

TENANT OVERVIEW

26

LOCATION OVERVIEW

40

OFFICE MARKET

46

FINANCIAL INFORMATION

CAPITAL MARKETS CONTACTS Sales Contacts Jack Crews Managing Director (214) 438-6150 jack.crews@am.jll.com

Financing Contacts Lauren Zimmer Vice President (214) 438-6147 lauren.zimmer@am.jll.com

Brendan Demuth Analyst (214) 438-6380 brendan.demuth@am.jll.com

Jason Piering Executive Vice President (214) 438-6546 jason.piering@am.jll.com

Adam Mengacci Vice President (214) 438-6548 adam.mengacci@am.jll.com


Convenient Location Strong Cash Flow High Quality Amenity Rich


BRIAR GROVE

EXECUTIVE SUMMARY 4

EXECUTIVE SUMMARY


The Offering Jones Lang LaSalle Americas, Inc. (“JLL”) has been exclusively retained to sell the Owner’s fee simple interest in Briargrove Place (“the Property”), a 128,620 square foot, 100% leased, Class A office building along the Dallas North Tollway (“the Tollway”). The convenient and highly visible location provides excellent access to a wide employment base as well as nearby retail, dining, entertainment and housing. The Property, built in 1998, features timeless, high-quality construction, efficient floor plates, ample parking, along with a fitness center and tenant break room.

BRIARGROVE PLACE Address

17855 N Dallas Pky Dallas, Texas 75287

Submarket

Quorum/Bent Tree

Year Built

1998

Size (SF)

128,620

Percent Leased Stories Floor Plate Parking Site Size (Acres)

100% 4 + / - 32,155 SF 4.84:1000 SF 7.08

EXECUTIVE SUMMARY

5


Investment Highlights CORE-PLUS OPPORTUNITY OFFERING RENT ROLL STABILITY WITH INCOME GROWTH -----

6

100% leased offering strong current yield from 13 tenants Diversified tenancy including health care, education, law firms, engineering and technology firms Upside opportunity to roll 45% of the building to market in the first three years with rents at expiration ranging from 5-35% under market Competitive market positioning. The Lower and Upper Tollway occupancies of 92% and 91%, respectively will continue to support and push rents north of $30 + E

EXECUTIVE SUMMARY


CONVENIENT, AMENITY-RICH LOCATION ALONG THE DALLAS NORTH TOLLWAY -----

Vi sta De l Sol

Prominently positioned between Trinity Mills and Frankford Road along the Dallas North Tollway, which is voyaged by nearly 200,000 vehicles daily Proximity to Highway 190, 635 and 121 provide easy access for employees coming from all over the Metroplex Nearby Frankford Road offers over 40 retail and dining options East – West thoroughfares (Briargrove Lane and Frankfort Road) provide easy access to residential living including multifamily to executive housing

ow

R

d

Ln

20 Country Brook Dr

18 12

19

Frankfo rd Rd

3 26 22 18 16 25 15

H ollow Oak Dr

6 Hig hlan de r Dr

Ca stl e

B

15 11

17

13

Ambergt. Ln

9

Frankford Rd

lly Tree Dr Ho

17

10

16 7 8

27

23

24

Bent Tree Meadow Park

14 13 11 9 31 8 5 2 1 1 6 10 5 19 4 3 12 2

Banyan Ln

ve

21

14

20 7

Spygl ass D r

ro Fi re brick L n

Dallas North Tollway

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P

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Sea Pine s D r Belleriv

Briarg rove

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Ln

Murfield D r

Bri argro ve Ln

29 25 31 29 30

B r oo

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Ln

M il i ty Trin

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30

4 32

Dr

33

21 28

27

d Hilton Hd. D r

Tam aron Dr

26

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24

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Ln

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R

C

ble ob

22 23

Old Frankford Cemetery

Cir

Ivy Hill Dr

Dallas

28

AMENITY RICH

Gibbo ns Dr

o ll H

Q ua il

Bria r Oaks

s Rd

Vo s

ay ol lo w W

. Dr

Stoneh

WC

RESTAURANT Pea r Rid ge Dr

Timbe rgl en R d

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Sushi Robata Vindu Indian Cuisine Subway Maguire's Restaurant Mi Cocina The Blue Fish Rafain Oliver's Eatery Jovian's Rice Kitchen Dickey's Barbecue Pit Starbucks Kennys Cafe Best Thai Signature Jack in the Box Casa Don Luis Tex-Mex Restaurant Boston Market

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

Denny's Chick-fil-A P.F. Chang's Pappadeaux Seafood Kitchen Angelo & Vito's Pizzeria Picasso's Pizza & Grill Jason's Deli Fuddruckers Yogurtland Taco Bell Ruth's Chris Steak House III Forks Norma's Cafe Sushi Maku Carrabba's Italian Grill Malarkey's Tavern

RETAIL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Oscar Nails & Day Spa GNC Albertsons GameStop Surety Sunday Bulletins Bank of America Financial Center Nails Gallerie In Bloom Flowers Frankford Car Wash Chase Bank Texaco Dallas Comerica Bank CVS Pharmacy FedEx Office Print & Ship Center 7-Eleven Ultimate Sport Nutrition

17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Wells Fargo Bank Great Clips Frankford Pavilion Great Cuts Office Sprint Store Youfit Health Clubs Paradise Nails US Post Office J.Sinclair Barber & Beauty Salon Hair by Shenanigan's LegacyTexas Bank Dallas Watch & Diamonds Trinity Vision Capital One Bank North Tollway Pet Hospital

r n D H arb or To w

EXECUTIVE SUMMARY

7


HIGH-QUALITY, EFFICIENT, CLASS A REAL ESTATE WITH SOLID HISTORICAL PERFORMANCE

-- Complete on-site amenity package including a fitness center with locker rooms and a tenant lounge . Over $350,000 has been spent in recent years -- Efficient, rectangular floor plates of +/- 32,000 square feet can accommodate large and small tenants -- Average tenant size is about 9,000 SF with average remaining term of 3.1 years -- 90% or higher occupancy the past five years confirms the tenant appeal for the Property

8

EXECUTIVE SUMMARY


TOP JOB GROWTH MARKET IN THE COUNTRY – D/FW MSA ----

Nation leading job growth: 116,800 new jobs have been added in the last 12 months and 590,000 since 2010, reducing unemployment to 3.8% Diversified job growth in D/FW — with no sector commanding more that 18% of the market, limiting exposure to idiosyncratic risk Briargrove Place is easily accessible to the top four new corporate campuses - State Farm, Toyota, JP Morgan Chase and Liberty Mutual - which will hire or relocate to Dallas approximately 20,000 jobs EXECUTIVE SUMMARY

9


BRIAR GROVE

PROPERTY DESCRIPTION


Property Description Briargrove Place is a premier office asset along the Dallas North Tollway with quick and convenient access to Dallas CBD, Dallas Love Field Airport, D/FW International Airport and Legacy Business Park all under 20 minutes.

Parking Parking for the Property is provided in 360-degree surface parking lot with 65 covered spaces on the West side of the building. The property boasts an above average parking ratio of 4.84:1,000 sf.

PARKING INFO Surface Handicap Surface Garage Handicap

0 558 0

Garage

65

Total

623


RECENT CAPITAL EXPENDITURES PROJECT

COST

YEAR

Elevator Lobby Floor Replacement

$13,000

2014

Exterior Lighting Upgrade

$15,000

2015

Painting Common Areas

$18,000

2014-2016

HVAC Improvements

$28,000

2014-2015

Parking Lot Improvements

$23,000

2014-2016

Main Lobby Improvements

$62,000

2014

First Floor Tenant Lounge and Furniture

$56,000

2015

First Floor Bathroom Remodel & Hallway

$125,000

2015

$17,000

2016

Rubberize Entrance Total

$357,000

Structure ----

--

Exterior panels are reinforced, precast, concrete tilt-up Interior and perimeter cast in place concrete columns support upper floors and roofs Upper floors are reinforced, cast-in-place, concrete slabs supported by cast-in-place, concrete beams Roofs are constructed of cast-in-place concrete and supported by concrete beams

Exterior Walls ------

Facade is constructed over reinforced concrete framing Facade consists primarily of a mixture tinted tempered insulated vision glass and sections of spandrel glass curtain walls to match the vision glass Curtain walls are outlined with pre-cast concrete panels and accents at each floor Glazed spandrel glass panels are also tempered, insulated, and coated with a tinted thermal film A laminated glass canopy on structural steel tube framing accents the main entrance on the east side of the building

Exterior Doors --

--

12

PROPERTY DESCRIPTION

Entrance doors on the east and west elevation of the building are part of an aluminum-framed storefront system that incorporates the entry doors accessing the elevator lobby Service and access doors are hollow metal


Exterior Windows --

The spandrel glass and vision glass windows are aluminum-framed with fixed panes of tinted double-glazed units

Foundation ----

Reinforced, concrete piers at load-bearing column locations Reinforced, concrete, grade beams connect and tie together each pier cap Steel-reinforced concrete slabs-on-grade are directly on the soil

HVAC --

--

--

--

--

The building has two hydraulic elevators manufactured by Schindler. One 70-ton and three 80-ton McQuay self-contained HVAC units with fan coils located in mechanical room The units work in conjunction with rooftop mounted cooling tower supplying cooled air to VAV boxes above the tenant and common area ceilings Heating is provided by electric heat located within the self-contained HVAC units delivering heated water to the coils within the HVAC units An additional 5-ton electric powered package rooftop unit supplies heat and cooled air to rooftop mechanical room All HVAC Units and roof top package units are original

Roof ----

----

Low slope, or flat with asphalt built-up and gravel surfacing Insulated with rigid insulation boards Exterior perimeter pre-cast concrete panel walls extend above the surface of the roofs, creating parapet walls Roof membrane terminates along a flashed cant strip at the base of the parapet walls Storm water is drained from the roofs by internal drains and sheet metal scuppers The roof is original and not covered by a warranty

PROPERTY DESCRIPTION

13


Cooling Tower --

--

--

--

Chilled water for the central cooling system is supplied by one roof top mounted watercooled cooling tower The 400-tons cooling tower is constructed of galvanized steel fiberglass stainless steel and is located on the roof Circulating pumps provide hot and chilled water to each temperature-controlled space by a two-pipe distribution system The rooftop cooling tower was replaced in 2012

Elevators ----

--

--

Electrical --

--

---

14

Electrical supply lines connect underground to pad-mounted transformer which feed interior-mounted main switch gear in electrical room The main electrical service size is 2,500 Amps, 277/480 Volt, three phase, four wire, alternating current (AC) Wiring is copper, installed in metallic conduit Circuit breaker panels are located throughout the building

PROPERTY DESCRIPTION

--

--

Three, traction passenger elevators manufactured by Montgomery Kone Company One, hydraulic passenger elevator manufactured by Montgomery Kone Company The passenger elevators have a rated capacity of 3,500 pounds and a speed of 100 fpm. Machinery is located in a penthouse at the top of the shaft The freight elevator has a rated capacity of 4,000 pounds and a speed of 100 fpm. The elevator machinery is located in a room adjacent to the shaft The passenger elevator cab have marble floors, wood wall panels, and recessed ceiling light fixtures. The doors are fitted with electronic safety stops. Emergency communication equipment is provided in each cab The freight elevator cab has rubber mat floors, laminated wood panels, and surface mounted light fixtures. The doors are fitted with electronic safety stops. Emergency communication equipment is provided in each cab The elevator machinery and controls are the originally installed system


Restrooms ---

--

Four restrooms are located on each floor- two sets of men’s and women’s Full floor tenants occupy the second and fourth floor thus the restrooms are part of the leased premise Common area restrooms contains ceramic tile floors, ceramic tile and painted gypsum board walls and ceilings

Sprinklers and Suppression Systems --

----

Hot Water Heaters --

---

Domestic hot water for the common area restrooms and fitness center in the 3rd floor is supplied by one 40-gallon and one 30-gallon electric water heaters There are no central hot water systems Tenant hot water is provided by individual electric water heaters or electric insta-pak water heaters located under the sink

Fire protection system includes a wet-pipe sprinkler system, a wet standpipe with fire department hose valves and connections in each stair tower, portable fire extinguishers, smoke detectors, pull stations and alarm horns Siamese connections are located on the exterior of the building Hard-wired smoke detectors are located throughout the common areas and tenant suites Fire hydrants are located along the public streets bordering the property and are approximately 100 feet from the building

Alarm Systems ---

--

--

Back-up exit lights, illuminated exit signs, pull stations, alarm horns, and strobe light alarms Fire alarm panel located in the first floor hallway and monitors the pull stations, smoke detectors, and flow switches Alarm panel also sounds the alarm and automatically notifies the monitoring service or the fire department in the event of trouble The alarm system is original

ADA

Environmental Status

The Owner makes no representations regarding the ADA status of the Property. Potential investors should conduct their own investigations to determine the Property’s ADA compliance.

The Owner makes no representations regarding the environmental status of the Property. Potential investors should conduct their own investigations to determine the Property’s environmental condition.

PROPERTY DESCRIPTION

15


Site Plan

Covered Parking

Covered Parking

BRIARGROVE LN

Covered walking path

Covered Parking

Covered Parking

Covered Parking

Briargrove Place 17855 Dallas Parkway

DALLAS PKWY

DALLAS NORTH TOLLWAY

16

PROPERTY DESCRIPTION

GIBBONS DR

Covered Parking

Roc Branc k h Dr


Typical Floor Plan Third Floor

PROPERTY DESCRIPTION

17


BRIAR GROVE

TENANT OVERVIEW 18

TENANCY


Tenancy Briargrove Place is 100% leased to 13 diverse tenants representing the education, healthcare, engineering, real estate and auto industries. The tenants range in size from 1,900 to over 32,500 square feet with the average tenant totaling approximately 9,900 square feet. The five largest tenants in the building comprise approximately 78% of the building and have an average tenure of 6.4 years at the Property. Four of the five largest tenants roll during the first five years providing a rent mark-to-market opportunity on rents over 35% below market. The rollover gives the next owner current cash flow as wells as the opportunity to grow NOI by renewing tenants at higher rents in a market that continues to experience significant rent growth due to positive absorption and lack of available space.

Rollover Profile $40.00

65,000

$36.00

52,000

$32.00

39,000

$28.00

26,000

$24.00

13,000

$20.00

Year 1

Year 2

Year 3

Year 4

Expiring Square Feet

Year 5

Year 6

In-place Rent (+ E)

Year 7

Year 8

Year 9

Year 10

-

Market Rent (+ E)

TOP FIVE LARGEST TENANTS TENANT

SIZE (SF)

% OF PROPERTY

LEASE BEGIN

YEARS AT PROPERTY

LEASE END

TERM REMAINING*

CURRENT RENT*

RENT AT EXPIRATION

% BELOW MARKET**

Cambium Learning

32,756

25%

Nov-10

6.2

Dec-18

1.5

$20.75 +E

$21.00 +E

33%

AccentCare

32,756

25%

May-11

5.7

Apr-22

4.8

$20.25 +E

$21.00 +E

46%

Jordan & Skala

16,107

13%

May-12

4.7

Feb-23

5.7

$21.40 +E

$26.36 +E

20%

Gateway Mortgage***

9,919

8%

Feb-11

5.9

Jul-18

1.1

$20.00 +E

$20.00 +E

40%

AutoNation

8,924

7%

Jan-03

14.0

Dec-20

3.5

$23.00 +E

$25.00 +E

19%

100,462

78%

3.4

$20.82 +E

$22.12 +E

35%

Totals

6.4

*As of 7/1/2017 **At Expiration ***Subleased space from Ryan Law

TENANCY

19


3.1

Years Average Remaining Term

100% Leased

20

TENANCY

45% rollover in first three years

In-place rents

5-35% below market


Stacking Plan

CAMBIUM 32,756 SF 12/31/2018

4

JORDAN & SKALA ENGINEERS - Suite 320 13,222 SF 2/28/2023

ACCENTCARE 32,756 SF 4/30/2022

2 1

FITNESS CENTER 910 SF Suite 305

RYAN LAW / BRUSNIAK - Suite 300 9,919 SF 7/31/2018

AUTONATION-Suite 310 8,924 SF 12/31/2020

3

INTERIM PHYSICIANS Suite 130 2,793 SF 12/31/2018

Jordan & Skala Suite 140 2,885 SF 2/28/2023

Tenant Lounge Suite 110 847 RSF

2017

MGA - Suite 120 Suite 120 2,869 SF 6/30/2018

2018

HARVEST PARTNERS Suite 100 4,443 SF 8/31/2018

2019

2020

INDEPENDENCE TITLE - Suite 195 2,996 SF 1/31/2017

2021

ELECTRONIC ARTS Suite 160 2,700 SF 5/31/2019

2022+

DICKER STAFFING Suite 150 3,550 SF 4/30/2020

Vacant

CLEMENT FIRM Suite 155 1,905 SF 6/30/2019

VACANT Ste 107 419 SF

BSB Design Suite 105 4,726 SF 2/28/2021

Misc

TENANCY

21


Cambium Learning Group, Inc. Cambium Learning Group, Inc. (NASDAQ: ABCD), based in Dallas, Texas, a leading educational solutions and services company helping all students by providing evidence-based solutions and expert professional services to empower educators and raise the achievement levels of all students. The company is composed of four business units: Voyager Sopris Learning™, Learning A–Z , ExploreLearning®, and Kurzweil Education ™ Together, these business units provide best-in-class intervention and supplemental instructional materials; gold-standard professional development and school-improvement services; breakthrough technology solutions for online learning and professional support; valid and reliable assessments; and proven materials to support a positive and safe school environment. The corporate headquarters is located at Briargrove Place. They have approximately 120 employees including executives, finance, accounting and Voyager Sopris employees on site. The majority of the employees live in within a short commute of the property. TENANT PROFILE Square Feet

32,756

Current Rent (January 2017)

$20.25 + E

Lease Expiration

December 2018

Public/Private

NASDAQ: ABCD

Website

www.cambiumlearning.com

FINANCIAL INFORMATION Total Assets (6/30/16) Total Cash (6/30/16)

22

$133.8 MM $6.1 MM

Total Revenues (2015)

$144.9 MM

Total Debt (6/30/16)

$110.8 MM

Market Cap (10/14/16)

$243.8 MM

TENANCY


AccentCare AccentCare is a national leader in post-acute home healthcare services, providing comprehensive care, guidance and support for a wide variety of needs, including short-term, complex and chronic conditions. They have more than 17,000 qualified professionals in 135 offices who are dedicated to improving quality of living. With advanced technologies, proprietary programs and extensive training, their caring team members uphold our mission for over 70,000 patients and clients each year. Family of Companies: - AccentCare - Texas Home Health - Senior Select Home Health Services - Guardian Home Care & Hospice - AccentCare of New York - Alliance for Health AccentCare moved their headquarters from Irvine, California Briargrove in the summer of 2011. They have approximately 150 employees including senior management and executives on site. The majority of operations performed at the property are back office finance and accounting for other offices and executive strategic planning and management.

TENANT PROFILE Square Feet Current Rent (January 2017) Lease Expiration Public/Private Website

32,756 $20.25 + E April 2022 Private www.accentcare.com

TENANCY

23


Jordan & Skala Engineers Jordan & Skala Engineers is a leading mechanical, electrical and plumbing engineering firm with regional design offices located throughout the United States. Jordan & Skala Engineers has participated in the design and construction of thousands of buildings throughout the United States, Central America, and the Caribbean. As one of the largest consulting engineering firms in the U.S., they were ranked by Consulting-Specifying Engineer trade publication as a top “MEP Giant� consistently since 2004.

TENANT PROFILE Square Feet Lease Expiration Public/Private Website

24

TENANCY

16,107 February 2023 Private www.jordanskala.com


AutoNation, Inc. AutoNation, Inc. (NYSE: AN), headquartered in Fort Lauderdale, Florida, is America’s largest automotive retailer. AutoNation is a component of the S&P 500 Index. AutoNation owns and operates over 360 new vehicle franchises in 16 states. AutoNation offers a diversified range of automotive products and services, including new and used vehicles, automotive repair services, and automotive finance and insurance products. AutoNation has sold over 10 million vehicles, the only auto retailer to achieve this milestone. AutoNation seeks to be the best-run, most profitable automotive retailer in the nation.

TENANT PROFILE Square Feet

8,924

Current Rent (January 2017)

$23.00 + E

Lease Expiration

December 2020

Public/Private Website

NYSE: AN investors.autonation.com

FINANCIAL INFORMATION Total Assets (6/30/16) Total Cash (6/30/16) Total Revenues (2015)

$9.8 B $54.7 MM $20.9 B

Total Debt (6/30/16)

$4.2 B

Market Cap (10/14/16)

$5.0 B

TENANCY

25


BRIAR GROVE

LOCATION OVERVIEW 26

AREA OVERVIEW


Why Dallas/Fort Worth?

21

41

147

Long known for its Old West heritage, Dallas / Fort Worth is now a thriving modern metropolis that maintains a small-town charm. It celebrates the past while staying on the cutting edge of art and business, offering a world-class cultural district with a business-friendly tax structure. The Metroplex has something for everyone, making it a wonderful place to live, work and enjoy life. NO STATE INCOME TAXES

Fortune 500 Headquarters

Fortune 1000 Headquarters

Headquarters that employ at least 1,000 employees

Pro-business atmosphere fosters a prosperous economic environment Texas is a right-to-work state Fastest growing metropolitan area in the United States

LARGEST ECONOMY IN TEXAS

4

th

largest metro area

6

th

largest economy in United States

Dallas is one of the World’s LEADING corporate headquarter centers

7

th

richest metro area by per capita income

Central time zone location provides access to US, Mexico and Central America within four hours via air travel Gateway for domestic and international transport resulting from its central location, access to major north/south and east/west highways as well as D/FW and Love Field Airports AREA OVERVIEW

27


Economic Overview

TOP EMPLOYERS

EMPLOYEES

WAL-MART BANK OF AMERICA

34,700 20,000

CARLSON RESTAURANTS TEXAS HEALTH RESOURCES

20,000 19,200

BAYLOR HEALTH CARE AT&T

16,900 15,800

JP MORGAN CHASE TEXAS INSTRUMENTS

14,500 14,000

DFW boasts the largest concentration of corporations in the U.S. with 269 corporate headquarters

UT- SOUTHWESTERN MEDICAL PARKLAND HEALTH SYSTEM

12,100 9,400

ENERGY FUTURE HOLDINGS UNITED PARCEL SERVICES

9,400 9,200

Expansions and relocations to DFW in the last few years brought a total investment of $3 billion to the area

TARGET HCA

8,700 8,500

RAYTHEON SOUTHWEST AIRLINES

8,500 7,700

VERIZON COMMNICATIONS CITI BANK

7,300 7,200

UNT SYSTEM BELL HELICOPTER

7,000 7,000

DIVERSE mix of companies and industries with recent increases in service, insurance and high-tech related industries, as well as those maintaining a major distribution network

2015 DFW FORTUNE 500 HQS ExxonMobil (2) AT&T (12) Energy Transfer Equity (53) American Airlines (70) Fluor (136) Kimberly-Clark (140) Holly Frontier (150) Southwest Airlines (161)

3.0% Information

Tenet Healthcare (170)

3.7% Transportation/Utilities

Texas Instruments (233) J.C. Penney (250)

4.0% Other 4.7% Construction 5.8% Wholesale Trade 7.6% Manufacturing 9.1% Financial Services 9.9% Leisure and Hospitality 10.1% Retail Trade 12.2% Education and Health Services 12.3% Government 17.5% Business & Professional Services

28

AREA OVERVIEW

Dean Foods (306)

DALLAS EMPLOYMENT DIVERSITY

Commercial Metals (388)

80 ON AN INDEX OF 100

Celanese (395)

GameStop (311) D.R. Horton (354)

Trinity Industries (433) Dr Pepper Snapple Group (437) Energy Future Holdings (446) Alliance Data Systems (494) Pioneer Natural Resources (496)


INCOME/HOUSING

POPULATION 2000

MSA

5.2 MILLION

2005

5.8 MILLION

2010

6.4 MILLION

2014

6.8 MILLION

2015 est

6.9 MILLION

2020

NEW RESIDENTS

1 2

DFW ATLANTA

758,760 692,300

3 4

HOUSTON MIAMI

681,820 593,460

5

PHOENIX

572,830

7.6 MILLION

2025

8.0 MILLION

AVERAGE HOUSEHOLD INCOME $85,490

$77,008

DALLAS

GREATER U.S

DFW’s high income levels and proportionately high household expenditures have attracted a wide variety of retail, restaurant and entertainment establishments to serve these communities.

AVERAGE HOUSEHOLD INCOME GROWTH 2.5%

2.6% GREATER U.S

DALLAS

2030

OVER 9 MILLION

AVERAGE HOME PRICE

DFW RANKS CONSISTENTLY IN THE TOP FIVE IN JOB GROWTH

$225,000 DALLAS

$278,061 GREATER USA

125,300

current YoY jobs added

400,000 196,000

current YoY job growth in Texas’ four major metros

8.4%

share of national employment growth

5.2%

average national unemployment rate

3.5%

current DFW unemployment rate

AREA OVERVIEW

29


FARMERS BRANCH

Farmers Branch Royal Lane

Terminal A

Bell

Richland Hills

CentrePort/ DFW Airport

Fort Worth ITC T & P STATION

• 70% of exports to Mexico are routed through the Metroplex

AN GE OR

HILL

121

377 121

199

Fort Worth 80

377

DallasFort Worth International Airport

635

114

161

DNT 12

183

80

Dallas

121 30 820

30

635

12

175

360

20 67

20 35W

20

287 35E

DALLAS

Mockingbird

MESQUITE

Cityplace/Uptown Deep Ellum Baylor University Medical Center Fair Park MLK, Jr. Hatcher Lawnview

DALLAS

Lake June BUCKNER

LEDBETTER

Rail Routes

190

ROWLETT

DOWNTOWN ROWLETT

Forest/Jupiter LBJ/Skillman Lake Highlands White Rock

Park Lane Lovers Lane

GLENN HEIGHTS

• Commercial/Industrial- all of the nation’s largest rail lines serve the Metroplex and coordinate with motor and truck carriers at four inter-modal freight carriers • Light Rail- Dallas Area Rapid Transit (DART) serves over 90,000 passengers daily with 90 miles of light rail • DART also operates a fleet of 612 buses and vans crisscrossing a 700-square mile service area

45

East/west access from coast to coast TOP 10 BUSIEST AIRPORTS - 2015

Excellent Airports • DFW Airport is currently ranked the ninth busiest in the world for commercial passenger • DFW Airport is also home to American Airlines, the nation’s largest airline following the 2013 merger with U.S. Airways • Dallas Love Field is home to Southwest Airlines, the nation’s fourth largest airline and offers non-stop flights to over 50 destinations with the elimination of the Wright Amendment in 2014 • Alliance Airport, in northeast Tarrant County, is the nation’s largest and busiest industrial transportation airport and home to more than 130 companies, processing more cargo than any other non-commercial passenger facility in the country 30

AREA OVERVIEW

Bu s

VA Medical Center

North/south access from Mexico through the northern U.S.

75

114

1709

820

121

Walnut Hill

Union Station Convention Center Cedars COCKRELL

8th & Corinth Dallas Zoo Tyler/Vernon Morrell Hampton Illinois WESTMORELAND Kiest

35E

Downtown Garland

Forest Lane

Irving Walnut Hill/Denton Convention Center Las Colinas Bachman Urban UNIVERSITY LOVE Center North Lake PARK College Burbank HIGHLAND PARK University IRVING Inwood/ of Dallas Love Field West Southwestern Irving Medical District/ Parkland Downtown Irving/ Heritage Crossing Market Center Medical/ Market Center Victory

t tric Dis Arts arl/ Pe Paul St. rd d Aka st En We

• International Inland Port of Dallas (IIPOD) furthers international business commerce • Center of the three-nation North American Free Trade Agreement (NAFTA)

President George Bush Turnpike

Strategically Located with Sophisticated Highway and Rail Infrastructure

DFW

GARLAND

LBJ/Central

Belt Line

DFW Airport

President George

Arapaho Center Spring Valley

Dallas North Tollway

Downtown Carrollton

Bush Turnpike

Galatyn Park

pike urn hT

Trinity Mills

FORT WORTH

RICHARDSON

ADDISON

LIN EW eek

NORTH CARROLLTON/FRANKFORD

Over 50 million people can be reached from DFW overnight by truck or rail and 96% of the U.S. population can be reached within 48 hours.

287

da yP e ak

President George Bush Turnpike

CARROLLTON

35W

PARKER ROAD Downtown Plano

On ly

Transportation

PLANO

to Denton (operated by DCTA)

RANK

AIRPORT

PASSENGERS

1

Hartsfield–Jackson Atlanta International Airport

96,178,899

2

Beijing Capital International Airport

86,130,390

3

London Heathrow Airport

73,408,442

4

Tokyo International Airport

72,826,862

5

Los Angeles International Airport

70,665,472

6

Dubai International Airport

70,475,636

7

O'Hare International Airport

70,015,746

8

Paris Charles de Gaulle Airport

63,808,796

9

Dallas/Fort Worth International Airport

63,523,489

10

Hong Kong International Airport

63,148,379


WINSPEAR OPERA HOUSE

DALLAS MUSEUM OF ART

KIMBALL ART MUSEUM

Quality of Life DFW residents have access to a broad range of cultural, educational and recreational facilities. Dallas Arts District

AT&T STADIUM (DALLAS COWBOYS)

• • • • •

Dallas Museum of Art Morton H. Meyerson Symphony Center Winspear Opera House Dee and Charles Wyly Theater Nasher Sculpture Garden

AMON CARTER MUSEUM

The Fort Worth Cultural District • Kimball Art Museum • Amon Carter Museum of American Art • Modern Art Museum.

Sports

NASHER SCULPTURE GARDEN

• • • •

Dallas Cowboys (National Football League) Dallas Mavericks (National Basketball Association) Texas Rangers (Major League Baseball) Dallas Stars (National Hockey League)

GLOBE LIFE PARK (TEXAS RANGERS) AREA OVERVIEW

31


32

AREA OVERVIEW


ALL THE FUNDAMENTALS OF A CORE MARKET RISING RENTS

HIGH OCCUPANCY

HIGH DEMAND

MINIMAL NEW CONSTRUCTION PROSPER

DENTON

THE LOWER TOLLWAY - THE EPICENTER OF DALLAS Far North Dallas has evolved since the Dallas North Tollway’s completion from the CBD to LBJ Freeway in 1968. Beginning in Downtown Dallas and ending at US Highway 380, the Dallas North Tollway provided the missing north-south artery through central North Dallas. Office buildings were originally developed in the Galleria area at LBJ Freeway and the Dallas North Tollway and development has continued north as the population has expanded. The prolific population growth has also led to extensive development of Legacy and Frisco’s $5 Billion Mile. Far North Dallas is now one of the most diverse and amenity-rich environments in Dallas.

LITTLE Toyota NorthCORINTH America, JPMorgan Chase and Liberty Mutual to name ELM a few. At the southern end, near the recently expanded and updated LBJ Freeway, investors and users are investing in buildings to take THE COLONY advantage of the explosive growth in the area work force. Lewisville The Lower Tollway, which includes everything along the Dallas North Lake Tollway between I-635 and State Highway 190, is centrally located HIGHLAND VILLAGEhighways, airports, employment centers, in terms of arterial

International Business Park

FLOWER MOUND

Grapevine Lake

GRAPEVINE

COPPELL North Lake

CARROLLTON

Addison Airport

ADDISON FARMERS BRANCH

RICHARDSON

GARLAND

y

Las Colinas

Preston Hollow

Dallas/Fort Worth International Airport

IRVING EULESS

Telecom Corridor

Tollwa

HURST

PLANO

LEWISVILLE

North

As development has continued north, “The Platinum Corridor”TM became bifurcated as the region has varying characteristics along its path. At the northern end, the Legacy region gains significant publicity with its land availability for major corporate relocations of

Legacy

Dallas

The success of the area over the past 20 years has led both local and national users and investors to name the Tollway spine as “The Platinum Corridor”™. Far North Dallas runs north along the Dallas North Tollway from the LBJ Freeway intersection through Dallas and West Plano to Frisco. Far North Dallas is the only region that spans into several of Dallas’ neighboring cities, including Addison, Farmers Branch, Plano and Frisco, all of which are among the Top 20 fastestSOUTHLAKE growing cities in the metro area since 1990. This rapid northern expansion over the past several years has driven many businesses to these outlying cities, spurring residential development along with complimenting retail.

McKINNEY neighborhoods – both affordable and executive and retail developments. The highway system makes the region easily accessible from all points of the Metroplex and thus a popular locale y llwa FRISCO o T n for corporate tenants. Consequently, the Lower Tollway boasts Dallas bur Ray Cowboys Sam Frisco excellentBridges demographics and continues to flourish with the increasing Hall Office Park demand and diminishing supply of high quality available space ALLEN across allGranite product types putting upward pressure on rents. Park

Dallas Love Field Airport

University Park Highland Park Uptown

Lakewood

White Rock Lake

AREA OVERVIEW

33


34

AREA OVERVIEW


BUSINESS ENVIRONMENT

INFRASTRUCTURE

The Lower Tollway continues to attract numerous

Quick and easy access to highways makes the location convenient for employers as they can recruit talent from a wide geographic

regional and national companies due to the

area. Additionally the sophisticated highway infrastructure makes other major economic nodes of the Metroplex and all major airports

access to a wide employee base with the

are accessible in minutes.

highway system and also strong, proximate abundance of both executive and affordable

DALLAS NORTH TOLLWAY – A 22-mile controlled-access toll road, which runs from I-35E

housing, two key characteristics sought by many

near Downtown Dallas, past SH 121 in Frisco to U.S. Highway 380.

corporations. Additionally, the composition of Class A office space, fine hotels, high-end retail,

I 635 (LBJ FREEWAY) – a 37-mile-long partial loop around Dallas, Texas, in the United

and numerous restaurants also adds to the

States between I-20 in Balch Springs and SH 121 at the north entrance of the Dallas-Fort

attractiveness of the Lower Tollway. Employment

Worth International Airport in Grapevine.

along the Lower Tollway is flourishing with all of the new construction deliveries in the micro-

SH 190/161 (PRESIDENT GEORGE BUSH TURNPIKE) – A 30.5-mile toll road running

market and its surrounding areas. Within a

east-west through the northern suburbs of Dallas.

5-mile radius of Briargrove Place, there are nearly 300,000 employees and 23,000 total businesses. With the addition of new businesses in Legacy, the Dallas North Tollway will continue to be a major employment artery as these

RECREATION

corporate relocations add support businesses

PRESTON TRAIL GOLF CLUB

BENT TREE COUNTRY CLUB

that create thousands of additional jobs across

3.0 miles fromBriargrove Place

2.6 miles from Briargrove Place

Dallas.

NORTHWOOD COUNTRY CLUB

PRESTONWOOD COUNTRY CLUB

7.0 miles from Briargrove Place

4.1 miles from Briargrove Place

TRANSPORTATION Addison Airport is a public airport owned by the City of Addison and is one of the busiest general aviation airports in Texas. As of today, it is home to more than 700 based aircraft with over 90,000 annual departures and arrivals. The airport is situated on approximately 366 acres and maintains a single runway that measures 7,202’ in length and is 100’ wide. The Addison Airport is located just under four miles, a ten minute drive via Midway Road, from Briargrove Place.

AREA OVERVIEW

35


QUALITY OF LIFE The Lower Tollway is particularly attractive to employers with a variety of residential options, restaurants, retail shops and office space in several different unique cities. It has become home to thousands of new residents the past several years, as well as hundreds of regional and national companies. The Lower Tollway features world-class shopping at a variety of malls including Galleria Dallas Mall and an abundance of high-end hotels and restaurants.

36

AREA OVERVIEW


EDUCATION Far North Dallas and specifically the Lower Tollway area is host to some of Dallas’ finest private school as well as higher education. The Greenhill School is a co-educational, nondenominational school that enrolls about 1,270 students from Pre-Kindergarten through grade 12. The school is divided into four sections: Preschool, Lower School, Middle School and the Upper School which houses about 433 students (9-12) with about 100 in each grade. In 2001, the school was ranked top 40 in public and private schools in Worth Magazine by the number of students who attend Harvard, Princeton and Yale. The school accepts about 25% of all applicants.

Parish Episcopal School is a co-educational, independent pre-kindergarten through 12th grade Episcopal school with two campuses. Third through twelfth grades are located on the Midway Campus. Located between Alpha Road and Spring Valley Road along Midway Road, the Midway Campus is a state-of-the-art facility, designed by world-renowned architect I.M. Pei. Breathtaking in architecture and design, the Midway Campus creates an environment that provides the perfect backdrop for older students to develop academically and socially. Parish offers a traditional, academic college-prep curriculum with a variety of vigorous and diverse course offerings, college guidance counseling, athletics and visual and performing arts. Total enrollment at Parish Episcopal School is approximately 1,100 students.

Trinity Christian Academy was founded in 1968 and is a conservative multi-denominational Christian School in Addison, Texas. Located just west of the Dallas North Tollway on Addison Road, TCA is one of the largest Christian schools in the United States with over 1,500 students. The school maintains a diversity program and non-discrimination policy to include all kinds of students regardless of their origin, as long as they are “believers”. The campus includes a lower or elementary school, middle school and a high school and is over 40 acres in size. There are 132 faculty, and the financial budget is $16,000,000. 6.8% of the students receive financial aid which totals $900,000 in awards annually. The school claims that 100% of graduates attend college. TCA is accredited by the Southern Association of Colleges and Schools.

AREA OVERVIEW

37


RETAIL

MIDTOWN Adjacent to the Dallas Galleria, the mixed-use, master-planned Midtown development is

DALLAS GALLERIA

poised to continue to cause the Lower Tollway to flourish. As a catalyst for the project, Beck

Galleria Dallas was built in 1982 by Hines Interest and renovated in

Ventures purchased Valley View Mall in 2011 with plans for a $3.5 billion redevelopment.

2005. The 1.7 million square foot Galleria Mall is centered around an

The master plan includes upwards of 440 acres with the following components amidst a

ice skating rink with a glass-vaulted ceiling and anchored by Nordstrom,

park-like setting.

Macy’s, Belk and the 448-room Westin Galleria Hotel which recently

850,000 SF of retail and restaurant space

underwent a $50 million renovation. Both the retail and hotel component

9,000 residential units

of the Dallas Galleria are owned by UBS.

1,000 hotel rooms 4,000,000 SF of office space ADDISON CIRCLE One of the premier, 24/7 urban live/work/play environments for both millennials and empty nesters, with four parks, almost 500,000 square feet of office space, over 2,100 multifamily units and over 300 condominiums/ townhomes plus over 10 restaurants and 25 retailers.

Under separate ownership, Galleria Towers I, II & III are the office component totaling 1.4 million square feet. In need of upgrades and coming vacancy, CBREI has recently purchased Galleria Towers I, II & III for approximately $310 million. They have plans to spend over $16 million in cosmetic upgrades and have pushed rates to $22.00-$25.00 NNN. 38

AREA OVERVIEW

Addison Circle has something for everyone. The multifamily has a weighted average occupancy of 96% with an average effective rate of $1.50 PSF. Addison Circle One and Two Addison Circle are 94% and 100% leased, respectively. Addison Circle One has an asking rent of $24.00-27.50 NNN.


VILLAGE ON THE PARKWAY Village on the Parkway is a 30-acre outdoor Mediterranean-style shopping center that recently underwent a major makeover. The upscale repositioned project encompasses 381,000 square feet on approximately 25 acres with a new Whole Foods and AMC. Village on the Parkway was purchased by UBS for over $70 million following the repositioning. SHOPS AT WILLOW BEND The Shops at Willow Bend is an upscale shopping mall located just north of President George Bush Turnpike and along the west side of the Dallas North Tollway. The regional mall boasts 1.3 million square feet of retail space, including well-known tenants such as J. Crew, Neiman Marcus and Coach to name a few. Starwood Retail Partners has planned $100 million in renovations that will include a class A office tower, a hotel and an entertainment district with six to eight restaurants. The project will begin early 2017 with the razing of the 125,000 square foot Saks Fifth Avenue.

PRESTONWOOD TOWN CENTER Prestonwood Town Center is a 62-acre shopping center that features retailers such as Best Buy, DSW and Office Depot and popular dining options such as Corner Bakery and McAlister’s. The retail shopping center, anchored by a Wal-Mart Supercenter and Barnes & Noble, opened in 2006 and is located at the northeast corner of Beltline Road and Montfort Drive. RESTAURANT ROW “Restaurant Row” features over 170 restaurants on Addison’s four square mile segment along Belt Line Road, just minutes south of the Property. Restaurant Row offers residents a variety of dining options that are easily accessible including an Outback Steakhouse, Texas de Brazil, Cantina Laredo and Houston’s.

AREA OVERVIEW

39


BRIAR GROVE

OFFICE MARKET 40

AREA OVERVIEW


DFW OFFICE MARKET OVERVIEW The DFW office market has benefited from bullish economic conditions and greater job creation than the rest of the U.S. The corporate attraction to the region remains staggering and is expected to continue.

ABSORPTION

VACANCY ■■

■■

■■

■■

2012 - 2015 saw a return to levels prior to the recession with absorption averaging 2.7 million square feet per year 2016 YTD D/FW absorption sits at almost 1.5 million square feet

■■

Through the end of 2016 3Q, Far North Dallas absorbed over 787,000 square feet ■■

D/FW has one of the lowest vacancy rates in over seven years at 18.9% which is approaching the historical low of 15% in 2000 Preston Center and Uptown are the tightest infill office submarkets hovering around 10% vacancy which pushes leasing demand towards Far North Dallas. Over 10.9 million square feet is currently under construction and is 68% preleased

RENTS ■■

Full-service rents in every submarket are up year after year and average $25.74 PSF

■■

Between 2013 and 2015, rents rose approximately 13% in D/FW

■■

Far North Dallas Class A & B full service rents have increased to $27.44 PSF, which equates to 9% year-over-year growth

■■

Class A rents currently sit at $31.05 PSF in Far North Dallas

AREA OVERVIEW

41


Market Composition INVENTORY (SF)

DALLAS/FORT WORTH SUBMARKETS CLASS A & B YTD NET ABSORPTION AVERAGE DIRECT PERCENTAGE OF DIRECT ASKING RENT TOTAL (SF) INVENTORY VACANCY % (PSF)

SINGLE & MULTI-TENANT CONSTRUCTION YTD UNDER COMPLETIONS (SF) CONSTRUCTION (SF)

CLASS A & B CBD

26,904,055

-713,313

-2.7%

24.0%

$24.87

0

261,400

Uptown/Oak Lawn

11,141,963

416,213

3.7%

12.4%

$38.49

671,330

1,500,471

Far North Dallas

38,517,462

787,557

2.0%

15.6%

$27.44

1,743,049

7,389,951

Las Colinas

29,682,841

183,528

0.6%

13.3%

$24.31

466,219

1,000,402

LBJ Freeway

19,217,951

484,656

2.5%

24.0%

$21.78

0

0

North Central Expressway

10,187,979

453,258

4.4%

12.2%

$26.49

0

0

4,032,073

3,602

0.1%

9.5%

$34.42

0

186,257

17,776,223

39,680

0.2%

19.7%

$23.55

459,186

608,901

8,070,975

-113,981

-1.4%

27.2%

$17.12

0

0

165,531,522

1,541,200

0.9%

18.0%

$25.74

3,339,784

10,947,382

Preston Center Richardson/Plano Stemmons Freeway Totals

Total Construction Multi-Tenant 41% 5,473,285 SF

42

OFFICE MARKET

Multi-Tenant Spec 79% 4,347,594 SF Build-to-Suit 59% 7,879,364 SF

Preleased 21% 1,125,285 SF


LOCATION/OWNERSHIP

PROPERTY

TOLLWAY ACQUISITIONS YEAR BUILT

SIZE (SF)

DATE

PRICING

PSF

LEGACY Intercontinental

Legacy Tower

2014

342,066

2016

$139,500,000

$408

Heady Investments Partnership

Headquarters I

2013

158,702

2015

$35,000,000

$221

KBS REIT II

Legacy Towne Centre I-II-III

2001-2006

600,000

2012

$113,380,000

$189

Franklin Street

One Legacy Circle

2008

212,594

2011

$53,600,000

$252

L&B

Legacy Place I-II

1998

297,758

2011

$62,800,000

$211

$404,280,000

$251

Total/ Weighted Average

1,611,120

LEGACY TO HWY 190 Heady Investments Partnership

Parkway Centre V

2009

203,213

2013

$36,000,000

$177

Goldman Sachs

Parkway Centre IV

2006

152,914

2013

$27,600,000

$180

TA Associates/Fund IX

Park Center

2000

236,428

2013

$53,910,000

$228

$117,510,000

$198

Total/ Weighted Average

592,555

HWY 190 TO BELT LINE Property Advisors

The Madison

1984

288,920

2016

$36,700,000

$127

Champion Partners

Tollway Towers

1984

320,914

2016

$37,875,000

$118

Buchanan Street

Tollway Plaza I,II

1998-1999

367,815

2015

$86,450,000

$235

LPC Advisors

Two Addison Circle

2009

198,484

2014

$45,250,000

$228

PM Realty

One Hanover Park

1998

195,194

2014

$33,500,000

$172

Gaedeke Group

Millennium Tower

1999

351,683

2013

$88,500,000

$252

Fortis Property

Colonnade I, II, III

1983-1998

984,254

2013

$215,000,000

$218

$543,275,000

$201

Total/ Weighted Average

2,707,264

BELT LINE TO LBJ Long Wharf/Goff Capital

International Plaza III

2002

354,182

2016

$72,300,000

$204

CBREI

Galleria Towers I, II & III

1982-1991

1,426,718

2015

$310,000,000

$217

Deutsche Bank

Galleria North Tower II

1999

325,000

2015

$77,125,000

$237

Deutsche Bank

Galleria North Tower I

1999

378,519

2014

$86,450,000

$228

Total/ Weighted Average

2,484,419

$545,875,000

$220

Total/ Weighted Average*

7,395,358

$1,610,940,000

$228

*PSF calculation excludes Dominium Office Center square footage

OFFICE MARKET

43


THE PLATINUM CORRIDOR The Briargrove building is located in the Platinum Corridor micro submarket, which hugs the Dallas North Tollway from Interstate 635 to State Highway 121. The appealing inventory, attractive fundamentals, strong demographics, accessibility from a highly connected network of highways and east west neighborhood streets, all complimented by an amenity base of restaurants and hotels have earned the Platinum Corridor office micro submarket the designation of being a quality and affordable business environment for local and national firms. The Dallas North Tollway is the backbone through the center of the Platinum Corridor and the draw for large and small businesses. This six lane toll road provides easy access north through Dallas’ premier residential communities of Addison, Bent Tree (Dallas), West Plano and Frisco.

ver the pa on o s

1.4 Million

Rent c om

o

ti rp

u po

ndin

g annua

lg

r

3.5% Five-Year

ate th r

44 Bldgs Comprising of 63% of Inventory

Net a bs

Sq

ss A Inventor y

ow

17.3 Million

Cla

s

OFFICE MARKET

t

year

44

Feet of Inven

y

110 Bldgs over 50,000 SF

re ua

t5

ant Class Te n A&

or

lti-

B

Mu

Investors have to look across the micro-market and the competitive set to understand the strength of the demand for this area. Consisting of Quorum/Bent Tree Office Micro-submarket


COMPETITIVE SET ANALYSIS The primary competitive set for Briargrove is 92% occupied by a diverse business group who enjoy its proximity to homes and entertainment. The lack of available space and new construction have driven rents north of $30 + E and buildings with strong ownership have maintained better than market occupancy. The location is convenient, energetic, close to the employee base’s residences and it’s economical.

BUILDING NAME Briargrove Place

ADDRESS 17855 N Dallas Pky

CLASS A

LOWER AND UPPER TOLLWAY SUBMARKET COMPETITIVE SET Knoll Trail Plaza 16400 N Dallas Pky Tollway Center 14675 Dallas Pky Two Addison Circle 15725 Dallas Pky Colonnade III 15305 Dallas Pky Corporate Centre 14911 Quorum Dr Centura Tower I 14185 N Dallas Pky One Hanover Park 16633 N Dallas Pky The Aberdeen 14841 N Dallas Pky International Plaza III 14241 Dallas Pky Addison Circle One 15601 Dallas Pky Quorum Place 14901 Quorum Dr Tollway Plaza North & South 15950-16000 N Dallas Pky Millennium Tower 15455 Dallas Pky Galleria North Tower I & II 13727-13737 Noel Rd Providence Towers 5001 Spring Valley Rd Spectrum Center 5080 Spectrum Dr TOTALS/WEIGHTED AVERAGES

A A A A A A A A A A A A A A A A

UPPER TOLLWAY International Business Park Phase 15 International Business Park XVI Park Center Parkway Centre V Parkway Centre II & III Parkway Centre IV Interchange Office Center Parkway Centre I TOTALS/WEIGHTED AVERAGES

A A A A A A A A

TOTALS/WEIGHTED AVERAGES

6100 W Plano Pky 6111 W Plano Pky 2400 N Dallas Pky 2500 N Dallas Pky 2745-2805 Dallas Pky 2701 Dallas Pky 19111 N Dallas Pky 2901 N Dallas Pky

COMPETITIVE SET PERCENT SF STORIES LEASED 128,620 4 100%

123,167 197,740 198,686 407,577 187,852 412,248 195,754 308,325 354,182 293,787 181,737 370,073 357,102 685,722 510,529 598,250 5,382,731

4 6 6 16 6 15 8 9 13 10 9 8 14 15 12 12

174,143 180,500 236,740 200,800 305,342 152,914 150,596 87,112 1,488,147

3 3 5 6 6 6 3 4

6,870,878

YEAR BUILT 1998

PARKING RATIO 4.0

AVG. ASKING RENT -

2014 2016 2009 1998 1998 1999 1998 1986 2002 1999 1981 1999 1999 1999 1986 1982

4.0 4.0 3.7 3.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 3.6 4.0 3.6 3.0 3.3

Withheld Withheld $30.00 $27.00 $25.00 $33.50 $33.00 $23.50 $32.50 $32.00 $31.50 $31.00 $27.00

3.7

$30.05 + E

4.3 6.0 3.8 8.0 4.1 4.0 3.5 4.0

$23.75 $32.00 $29.50 $27.00 $26.50 $26.00 $24.00

91%

4.8

$27.46 + E

92%

3.9

$29.44 + E

100% 100% 100% 100% 95% 97% 94% 96% 78% 94% 71% 95% 89% 96% 99% 74% 92%

100% 99% 93% 93% 93% 90% 78% 74%

2009 2014 2000 2009 2000 2006 1997 1998

OWNER Property Advisers

Knoll Trail Office Partners Cawley Lincoln Fortis Property Glazer Investments Garden Centura PM Realty JP Realty Long Wharf / Goff Capital Franklin Street DRA Advisors Buchanan Street Gaedeke RREEF KBS Realty Granite

Billingsley Company Billingsley Company TA Realty Randy Heady AEW Goldman Sachs Brookwood Financial Sun Life Assurance

OFFICE MARKET

45


CASH FLOW PROJECTIONS For the Years Ending In-place Rent (+ E) Market Rent (+ E) Rent Growth Potential Gross Revenue Base Rental Revenue Absorption & Turnover Vacancy Base Rent Abatements Scheduled Base Rental Revenue Total Reimbursement Revenue Covered Parking Fitness Center Tenant Lounge In-Place Contract Parking Revenue Ruth's Chris Steak House Parking Total Potential Revenue General Vacancy Effective Gross Revenue Operating Expenses R&M HVAC R&M Electrical R&M Cleaning Expense Grounds R&M Security Property Management Fees Admin Cost Real Estate Taxes Texas Margin Tax Insurance Electricity Water & Sewer Fitness Center Tenant Lounge NR - Misc Total Operating Expenses Net Operating Income Leasing & Capital Costs Tenant Improvements Leasing Commissions CAPEX Total Leasing & Capital Costs Cash Flow Before Debt Service & Taxes 46

FINANCIAL INFORMATION

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Jun-2018 $21.20 $27.00

Jun-2019 $22.22 $28.00 3.7%

Jun-2020 $25.01 $28.84 3.0%

Jun-2021 $25.86 $29.71 3.0%

Jun-2022 $27.04 $30.60 3.0%

Jun-2023 $29.37 $31.51 3.0%

Jun-2024 $30.49 $32.46 3.0%

Jun-2025 $32.40 $33.43 3.0%

Jun-2026 $32.87 $34.44 3.0%

Jun-2027 $33.70 $35.47 3.0%

$2,729,988 (2,828) (2,357) 2,724,803 439,270 23,172 22,564 3,240 9,000 3,222,049 (222,915) 2,999,134

$3,001,170 (272,174) (83,025) 2,645,971 363,228 11,025 23,867 23,241 2,725 9,000 3,079,057 3,079,057

$3,227,967 (33,222) (6,917) 3,187,828 341,055 25,275 24,585 23,939 1,650 9,000 3,613,332 (222,036) 3,391,296

$3,363,940 (69,607) (27,244) 3,267,089 363,384 31,500 25,320 24,657 400 9,000 3,721,350 (195,759) 3,525,591

$3,502,912 (172,047)

$4,043,228 (307,999) (96,476) 3,638,753 257,961 58,500 27,670 26,943 9,000 4,018,827 4,018,827

$4,176,158 (25,660) (8,019) 4,142,479 264,548 58,500 28,498 27,753 9,000 4,530,778 (293,291) 4,237,487

$4,257,192 (101,068) (22,853) 4,133,271 295,954 58,500 29,355 28,584 9,000 4,554,664 (224,832) 4,329,832

$4,342,658

3,330,865 364,867 38,100 26,083 25,399 9,000 3,794,314 (105,600) 3,688,714

$3,867,667 (89,339) (81,683) 3,696,645 294,048 53,100 26,864 26,157 9,000 4,105,814 (204,321) 3,901,493

89,949 8,470 7,137 137,762 40,962 61,938 89,973 126,906 569,098 9,927 27,898 163,706 29,887 23,172 22,564 12,862 1,422,211 1,576,923

90,939 8,566 7,214 139,284 41,415 59,564 92,371 130,711 586,172 10,192 28,736 160,541 29,309 23,867 23,241 12,862 1,444,984 1,634,073

95,233 8,968 7,555 145,860 43,368 65,236 101,740 134,633 603,756 11,225 29,599 172,769 31,541 24,585 23,939 12,862 1,512,869 1,878,427

97,867 9,217 7,765 149,893 44,568 66,636 105,767 138,673 621,870 11,670 30,485 176,891 32,294 25,320 24,657 12,862 1,556,435 1,969,156

100,167 9,433 7,945 153,415 45,616 67,057 110,661 142,833 640,525 12,210 31,401 179,187 32,713 26,083 25,399 12,862 1,597,507 2,091,207

103,728 9,770 8,230 158,870 47,238 70,450 117,045 147,117 659,740 12,914 32,343 187,199 34,176 26,864 26,157 12,862 1,654,703 2,246,790

105,471 9,933 8,367 161,540 48,032 69,170 120,565 151,531 679,534 13,302 33,313 186,336 34,019 27,670 26,943 12,862 1,688,588 2,330,239

110,484 10,405 8,764 169,218 50,314 75,827 127,125 156,077 699,919 14,026 34,313 200,673 36,636 28,498 27,753 12,862 1,762,894 2,474,593

113,324 10,673 8,991 173,568 51,609 76,929 129,894 160,760 720,917 14,331 35,341 204,454 37,326 29,355 28,584 12,862 1,808,918 2,520,914

117,385 11,055 9,311 179,786 53,457 80,874 133,656 165,581 742,545 14,747 36,401 213,709 39,015 30,235 29,443 12,862 1,870,062 2,585,137

6,285 3,800 19,293 29,378 $1,547,545

1,040,865 551,232 19,293 1,611,390 $22,683

86,717 45,910 19,293 151,920 $1,726,507

341,552 180,511 19,293 541,356 $1,427,800

19,293 19,293 $2,071,914

1,024,025 540,424 19,293 1,583,742 $663,048

1,209,474 637,474 19,293 1,866,241 $463,998

100,529 52,975 19,293 172,797 $2,301,796

286,499 150,756 19,293 456,548 $2,064,366

109,453 57,581 19,293 186,327 $2,398,810

(8,731) 4,333,927 329,432 58,500 30,235 29,443 9,000 4,790,537 (335,338) 4,455,199


Cash Flow Assumptions Argus: 15.0.1.26 Analysis Period:

July 1, 2017 – June 30,2027

Income Base Rent New and renewing tenants are signed at the then-current market rental rate as outlined with the cash flows. Office rental rates reflect a “+E” lease structure, with $0.50 annual rent bumps and reimbursement of Operating Expenses over a base year, grossed up to 95% occupancy. No termination options are assumed to be enacted. The in-place rent accounts for absorption and turnover vacancy as well as rent abatements.

Market vs In-place Rent $40.00

65,000

$36.00

52,000

$32.00

39,000

$28.00

26,000

$24.00

13,000

$20.00

Year 1

Year 2

Year 3

Expiring Square Feet

Year 4

Year 5

Year 6

Year 7

In-place Rent (+ E)

Year 8

Year 9

Year 10

-

Market Rent (+ E)

MARKET RENT In-place Rent (+ E) Market Rent (+ E)

Year 1 $21.20 $27.00

Rent Growth Expiring Square Feet

-

Year 2 $22.22 $28.00

Year 3 $25.01 $28.84

Year 4 $25.86 $29.71

Year 5 $27.04 $30.60

Year 6 $29.37 $31.51

Year 7 $30.49 $32.46

Year 8 $32.40 $33.43

Year 9 $32.87 $34.44

Year 10 $33.70 $35.47

3.7%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

60,381

3,550

13,650

32,756

16,526

55,776

8,155

13,650

32,756

FINANCIAL INFORMATION

47


Other Income YEAR 1 OTHER INCOME REVENUE

AMOUNT

PSF

Total Reimbursement Revenue

403,695

$3.14

All tenants are base year plus electricity and reimburse their pro-rata share of electricity and all other expenses over their base year stop

9,000

$0.07

Flat rate of $750 per month and held constant throughout valuation

-

$0.00

Assumed to roll covered canopy parking to market rent of $75 per space as tenants with covered parking roll

Fitness Center

23,031

$0.18

Reimbursed by tenants by an annual amount of $25 PSF

Tenant Lounge

21,334

$0.17

Reimbursed by tenants by an annual amount of $25 PSF

3,240

$0.03

Current lease contract obligations.

403,695

$3.14

Ruth's Chris Steak House Parking Covered Parking

Parking Revenue Total

COMMENTS

General Vacancy A general vacancy factor of 7% is applied to the scheduled base rental revenue.

48

FINANCIAL INFORMATION


Operating Expenses The building expense assumptions are based on the Property’s 2016 actual expenses through October or as otherwise noted. Expenses are inflated 3% annually. YEAR 1 PROJECTED EXPENSES EXPENSE

AMOUNT

PSF

89,949

$0.70

Based on client's annualized August 2016 YTD actuals and 75% of the cost is fixed

HVAC R&M

8,470

$0.07

Based on client's annualized August 2016 YTD actuals and 75% of the cost is fixed

Electrical R&M

7,137

$0.06

Based on client's annualized August 2016 YTD actuals and 75% of the cost is fixed

137,762

$1.07

Based on client's annualized August 2016 YTD actuals and 75% of the cost is fixed

Grounds R&M

40,962

$0.32

Based on client's annualized August 2016 YTD actuals and 75% of the cost is fixed

Security

61,938

$0.48

Based on client's annualized August 2016 YTD actuals and 10% of the cost is fixed

Property Management Fees

89,973

$0.70

3% of Effective Gross Revenue

Admin Cost

126,906

$0.99

Based on client's annualized August 2016 YTD actuals and 100% of the cost is fixed

Property Taxes

579,025

$4.50

Assessed by the Dallas County Central Appraisal District. Assumed taxes per assessment available on dcad.org. JLL has not adjusted real estate taxes to reflect a potential reassessment upon sale or a 2017 reassessment and also includes the Texas Margin Tax which is equal to 0.331% of Effective Gross Revenue and may or may not have been passed through by previous ownerships

R&M

Cleaning Expense

COMMENTS

HISTORICAL PROPERTY TAXES YEAR

ASSESSED VALUE

MILAGE

AD VALORUM TAXES

2016

$22,048,607

$2.54

$560,687

2015

$18,770,000

$2.54

$477,314

2014

$18,250,000

$2.56

$467,558

2013

$15,937,226

$2.57

$409,769

2012

$15,400,000

$2.50

$384,492

Insurance

27,898

$0.22

Based on client's annualized August 2016 YTD actuals and 100% of the cost is fixed

Electricity

163,706

$1.27

Based on client's annualized August 2016 YTD actuals and 35% of the cost is fixed

Water & Sewer

29,887

$0.23

Based on client's annualized August 2016 YTD actuals and 35% of the cost is fixed

Fitness Center

23,172

$0.18

All expenses are 100% fixed and 100% is reimbursed by tenants. Not included in Base Year stops

Tenant Lounge

22,564

$0.18

All expenses are 100% fixed and 100% is reimbursed by tenants. Not included in Base Year stops

NR - Misc

12,862

$0.10

Miscellaneous expense for professional, marketing and other fees not reimbursable by the tenants. Held at $0.10 PSF and 0% inflation

1,422,211

$11.06

Total

FINANCIAL INFORMATION

49


Capital Expenditures Capital Reserves An annual reserve of $0.25 per square foot is assumed to begin in 2016 and expected to grow 3% per year. SECOND GENERATION LEASING Retention Ratio

75%

Financial Terms

7 years

Rent

Market 2.5 months

Tenant Improvements

TENANTING COSTS NEW DEAL $30.00 PSF

Expense Recovery

Base Stop + E

Leasing Commissions

6.75%

Rent Changes

$0.50 annually

Downtime

Rent Abatement

50

FINANCIAL INFORMATION

6.75% 9 months

Historical Operating Expenses HISTORICAL AND PROJECTED OPERATING EXPENSES RECOVERABLE EXPENSES AMOUNT PSF AMOUNT PSF Repair & Maintenance $38,955 $0.30 $68,895 $0.54 HVAC Repair & Maintenance 11,403 $0.09 20,169 $0.16 Electrical Repair & Maintenance 9,802 $0.08 5,335 $0.04 Cleaning Expense 117,667 $0.91 144,105 $1.12 Grounds Maintenance & Repair 59,552 $0.46 37,710 $0.29 Security 61,915 $0.48 67,734 $0.53 Administrative Cost 270,640 $2.10 281,121 $2.19 Tax Expense 478,148 $3.72 502,821 $3.91 Insurance 24,851 $0.19 21,444 $0.17 Electricity 206,365 $1.60 173,375 $1.35 Water & Sewer 27,964 $0.22 27,880 $0.22 Total Recoverable Expenses $1,307,262 $10.16 $1,350,588 $10.50

RENEWAL $10.00 PSF

AMOUNT $88,636 8,347 7,032 135,755 40,365 61,067 262,140 523,108 27,487 161,371 29,461 $1,344,768

PSF $0.69 $0.06 $0.05 $1.06 $0.31 $0.47 $2.04 $4.07 $0.21 $1.25 $0.23 $10.46


BRIARGROVE PLACE VIEW RENT ROLL TENANT Harvest Partners

BSB Design

Tenant Lounge MGA Healthcare Texas

Interim Physicians

Jordan & Skala

Dicker Staffing Services

The Clement Firm/Todd Clement

Electronic Arts

SF PRO-RATA SHARE LEASE LEASE SUITE BUILDING SF COMMENCEMENT TERMINATION CURRENT RENT1 100 4,443 Apr-13 Aug-18 $23.25 3.47% 128,092 1. Renewal Option: 1, 5 year renewal at market rent with a minimum of 180 but no more than 360 day notice 2. Termination Option: No Longer Valid 3. Employee ratio of 4 per 1,000 RSF or lower otherwise charged 150% of monthly basic rent 105 4,726 Mar-03 Feb-21 $24.00 3.69% 128,092

FUTURE RENT Sep-17 $24.00

REIMB METHOD 2013 BY + E 6% Cap Controllables 95% GU

Mar-17 $24.50 2014 BY + E Mar-18 $25.00 6% Cap Controllables Mar-19 $25.50 95% GU Mar-20 $26.00 1. Renewal Option: 1, 5 year renewal option with a minimum of 270 but no more than 365 days notice at fair market rent 110 847 Jul-14 $25.00 No Reimbursement 1. Reimbursed by tenants 120 2,869 Jan-13 Jun-18 $28.00 2013 BY + E 2.24% 7% Cap Controllables 128,092 95% GU 1. Security Deposit $7,145.45 2. Renewal Option: 1, 5 year renewal at market rent with a minimum of 270 but no more than 360 day notice 3. Employee ratio of 4 per 1,000 RSF or lower otherwise charged 150% of monthly basic rent 130 2,793 Jul-12 Dec-18 $24.50 2012 BY + E Dec-17 $25.00 2.18% 95% GU 128,092 1. Renewal Option: 1, 3 year renewal option with a minimum of 180 but no more than 270 days notice at fair market rent 140 2,885 Jul-16 Feb-23 $25.50 Mar-17 $25.50 2016 BY + E 2.25% 2 months Mar-18 $26.00 7% Cap Controllable 128,092 abated Mar-19 $26.50 Mar-20 $27.00 Mar-21 $27.50 Mar-22 $28.00 1. Termination Option voided (Amendment 1) 2. R OFR on third floor of a space same size or larger than Suite 140 and contiguous with space, then Suite 140 terminates and moves space to third floor. Tenant is responsible for all costs 150 3,550 Jun-05 Apr-20 $20.00 Jun-17 $20.25 2013 BY + E 2.79% Jun-18 $20.50 6% Cap Controllable 127,082 Jun-19 $20.75 95% GU 1. Renewal Option: 1, 5 year renewal option with a minimum of 300 but no more than 390 days notice at fair market rent 155 1,905 Jul-14 Jun-19 $25.50 Jul-17 $26.00 Base Year + E 1.49% Jul-18 $26.50 128,092 95% GU 1. Renewal Option: 1, 3 year renewal option with a minimum of 270 but no more than 365 days notice at fair market rent 160 2,700 Oct-03 May-19 $23.00 Dec-17 $23.50 2013 BY + E 2.12% 95% GU 127,082 1. Renewal Option: 1, 5 year renewal option with a minimum of 270 but no more than 365 days notice at fair market rent 2. Exercised 2 renewal options

FINANCIAL INFORMATION

51


BRIARGROVE PLACE VIEW RENT ROLL TENANT Independence Title AccentCare

Gateway Mortgage sublease from Ryan Law

Fitness Center AutoNation

Jordan & Skala

Cambium Learning

*** Vacant ***

52

FINANCIAL INFORMATION

SUITE 195 200

SF PRO-RATA SHARE BUILDING SF 2,996 2.34% 128,092 32,756 25.78% 127,082

LEASE COMMENCEMENT Nov-12

LEASE TERMINATION Jan-17

CURRENT RENT1 $20.00

May-11

Apr-22

$20.25

FUTURE RENT

May-18

$21.00

1. Signage rights on the building faรงade if Cambium gives up their current rights 2. ROFR on Suite 100 and Suite 130 3. Renewal Option: 1, 5 year renewal option with a minimum of 360 days but no more than 450 days notice at Fair Market Rent 4. Parking ratio is 4.0 per 1,000 RSF and if renewal option is exercised then will be charged fair market rent for all spaces 300 9,919 Feb-11 Jul-18 $20.00 7.81% 127,083 1. Forfeits all options under original lease given to Ryan Law 305 910 Dec-10 $25.00 1. Reimbursed by tenants 310 8,924 Jan-03 Dec-20 $23.00 Jan-18 $23.50 7.02% Jan-19 $24.00 127,082 Jan-20 $25.00 1. Parent Company AutoNation, Inc. is the Guarantor on the lease (S&P: BBB- Stable Outlook 9/16/2016) 2. ROFR on third floor space 3. During training tenant may use upto 60 visitor parking spaces 320 13,222 May-12 Feb-23 $20.25 Mar-17 $20.50 10.32% Mar-19 $20.75 128,092 Mar-20 $25.00 Mar-21 $25.50 Mar-22 $26.00 1. Termination Option voided (Amendment 1) 2. Renewal Option: 2, 5 year renewal options at market rent with a minimum of 3. Density Ratio must be no more than 5 employees per 1,000 RSF or MTM rent will be 150% of Base Rent Section 5.07 4. Signage rights on the building faรงade 400 32,756 Nov-10 Dec-18 $20.25 Jan-17 $20.75 25.78% Jan-18 $21.00 127,082 1. Signage rights on the front of the Building at no cost 107 419

Vacancy (SF) Leased (SF) Total (SF)

419 128,201 128,620

0% 100%

REIMB METHOD 2012 BY + E 6% Cap Controllables 95% GU 2011 BY + E 95% GU

2011 BY + E

100% GU No Reimbursement 2013 BY + E 7% Cap Controllables

2012 BY + E

7% Cap Controllables 95% GU

2011 BY + E 7% Cap Controllables

95% GU


DISCLAIMER This Brochure is provided for the sole purpose of allowing a potential investor to evaluate whether there is interest in proceeding with further discussions regarding a possible purchase of or investment in Briargrove Place located at 17855 N. Dallas Parkway, Dallas, Texas (the “Property”). The potential investor is urged to perform it own examination and inspection of the Property and information relating to same, and shall rely solely on such examination and investigation and not on this Brochure or any materials, statements or information contained herein or otherwise provided. Neither Jones Lang LaSalle Americas, Inc. nor the Owner, nor any of their respective partners, directors, officers, employees, shareholders and agents (collectively, “Agents”), make any representations or warranties, whether express or implied, by operation of law or otherwise, with respect to this Brochure or the Property or any materials, statements (including financial statements and projections) or information contained herein or relating thereto, or as to the accuracy or completeness of such materials, statements or information, or as to the condition, quality or fitness of the Property, or assumes any responsibility with respect thereto. Such materials, statements and information have in many circumstances been obtained from outside sources, and have not been tested or verified. Projections, in particular, are based on various assumptions and subjective determinations as to which no guaranty or assurance can be given. Without limiting the foregoing, in the event this Brochure contains information relating to asbestos or any other hazardous, toxic or dangerous chemical, item, waste or substance (“Hazardous Materials”) in relation to the Property, such information shall in no way be construed as creating any warranties or representations, expressed or implied, by operation of law or otherwise, by Agents or the Owner, as to the existence or non-existence or nature of Hazardous Materials in, under, on or around the Property. This Brochure is provided subject to errors, omissions, change of price or terms and other changes to the materials, statements and information contained herein or relating to the Property, and is subject to withdrawal, all without notice. The contents hereof are confidential and are not to be reproduced or distributed to any person or entity without the prior written consent of Agents or used for any purpose other than initial evaluation as indicated above.

FINANCIAL INFORMATION

53


CAPITAL MARKETS CONTACTS Sales Contacts Jack Crews Managing Director (214) 438-6150 jack.crews@am.jll.com Brendan Demuth Analyst (214) 438-6380 brendan.demuth@am.jll.com

Financing Contact Lauren Zimmer Vice President (214) 438-6147 lauren.zimmer@am.jll.com

Jason Piering Executive Vice President (214) 438-6546 jason.piering@am.jll.com Adam Mengacci Vice President (214) 438-6548 adam.mengacci@am.jll.com

8343 Douglas Avenue Suite 100 Dallas, Texas 75225 www.jll.com/Dallas


Briargrove place om v4