Midway 2017 annual report

2017 MPACT REPORT

50th Anniversary Edition

OUR PURPOSE IS TO CREATE ENDURING INVESTMENTS AND REMARKABLE PLACES THAT ENRICH PEOPLE’S LIVES

MIDWAY IS BUILT ON OUR CORE VALUES:

PASSION INTEGRITY ADAPTABILITY QUALITY INITIATIVE TEAMWORK GENEROSITY OUR ACTIONS FOLLOW OUR BELIEFS.

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ADAPT: TO MODIFY OR CHANGE TO SUIT NEW USES, CHANGING TIMES OR NEW CONDITIONS

As Midway celebrates its 50th anniversary, we are grateful to our Creator who makes all things possible and to our Founder, Jim Moran, whose leap of faith started this firm.

We honor people who embrace our vision, work with selfless dedication, and make a lasting, positive impact. Thanks to all of them, the positive impact of Midway reaches farther and touches more people than we can include in one report, so we will tell you just a few of the recent highlights on some of our active developments, and share insight on how “adaptability,” a core value from Midway’s very beginning, drives our strategic focus and investment strategy.

“Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders not average people. They got to where they are by seeking challenges and taking risks.”

Daniel Kahneman, Nobel Prize-winning Economist.

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WHAT WE DO

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Our focus at Midway Midway creates places that deliver unique and valuable experiences. We specialize in mixed-use developments and we typically create all asset classes within our projects. With this focus, we can ensure all of the individual elements achieve a consistent brand and the entire development achieves its creative vision.

O FFI C E

R E TAI L

R E S TAU R ANT

E NTE R TAI N M E NT

G R E E N S PAC E

S I N G LE- FA M I LY

MU LTI FA M I LY

H OS P ITALIT Y

M E E TI N G + E VE NT

HOMECOMING

C E NTU RY SQ UAR E

A new threshold for Texas A&M University Century Square, a 60-acre walkable mixed-use district, welcomes returning Aggies, locals of all ages, and visitors from across the Texas Brazos Valley. The 100 Park multifamily residential community creates a new lifestyle for professionals wanting quality homes and ample amenities with the freedom of renting. The community discovered its new gathering place on The Green. Big game days and everyday, a changing lineup of activity is creating a new center of gravity in Bryan/College Station.

Coming in 2018: Star Cinema Grill, Hey Sugar, SubZero Nitrogen Ice Cream, Mess Waffles, Sweet Paris, Harvest Coffee, Galleria Day Spa, Breakaway Ministries, Hemline, Mo’s Irish Pub, Porters Dining + Butcher, Premier Health Care, and Share Tea.

60

25

total acres

acres (phase one)

200,000

60,000

square feet of retail, restaurant, and entertainment space (phase one)

square feet of Class-A office space (phase one)

249

2

modern apartments (phase one)

full-service hotels (phase one)

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HOSPITALITY

C AVALRY CO U R T

Retro perfection Cavalry Court at Century Square blends a timeless retro military style from the ‘50s and ‘60s, with touches of luxury and resort-style amenities. A full-service hotel, with bonus features of live music, outdoor fire pits, and a pool reminiscent of a fresh water swimming hole, Cavalry Court wins travelers’ hearts and ranked #1 on Trip Advisor.

Making every stay at Cavalry Court an experience to remember, The Canteen bar and restaurant serves up breakfast, lunch, dinner and drinks with live music under the stars, while The Stables has become one of the Brazos Valley’s favorite venues for meetings and events.

141

2

guest rooms

full time hotel dogs

TH E G EO RG E

Where rustic meets refined Luxury and hospitality harken back to College Station’s days as a rail stop, before the area was synonymous with Texas A&M University. The George hotel at Century Square is steeped in an atmosphere of authentic Texas charm, bringing a sophisticated flair all its own to the Brazos Valley.

The George quickly became a regional draw for memorable meetings and special events.

With its farm-to-table restaurant Poppy and 1791 Whiskey Bar, The George curates cocktails and fine foods for a fresh and knowledgeable take on modern Texas regional cuisine.

162

10,000

guest rooms

books make up the Texas flag art installation

AT CENTURY SQUARE 11

HITTING IT OUT OF THE PARK

K I R BY G ROVE

Award-winning impact In the 11-year history of the Urban Land Institute’s prestigious Development of Distinction Awards, no project has won both the jury award and the People’s Choice. Levy Park, a green oasis framed by Midway’s Kirby Grove Office to the north, and Avenue Grove upscale lofts to the south, took both awards in 2017. An innovative public-private partnership that has become a model for future P3 opportunities, the park + commercial development packs a big impact into a small footprint.

Kirby Grove Office was chosen by international collaborative workplace company, Spaces, for its Houston market entry. Kiran’s, a fine-dining Indian restaurant, opened to rave reviews.

With tenants like world-leading energy trading firm, Vitol and Houston business and litigation law firm BoyarMiller, Kirby Grove Office is poised to be fully leased in 2018.

16

25,000

floors of Class-A, LEED-Gold office space

square feet of ground floor restaurant and retail space

13

MULTIFAMILY

1 0 0 PAR K

A higher degree of living 100 Park offers upscale living for residents over 21 in the heart of Century Square as the first walkable, mixed-use environment in Brazos Valley. The dynamic open green spaces, entertainment and engaging events create a unique lifestyle for 100 Park residents and the Bryan/College Station area.

249

10,000

modern apartments

square feet of ground floor restaurant and retail space

AVE N U E G ROVE

Lofty luxury Avenue Grove offers renters-by-choice a never-ending adventure with concerts, food trucks, fitness and yoga classes, a play place that delights all ages. The happy bustle of Levy Park and neighborhood restaurants and retail at Kirby Grove office are the perfect accent to Avenue Grove. Airy and contemporary, its light-filled homes open onto spellbinding views of dramatic evening lights of Downtown and the Texas Medical Center, or stately oaks on the park’s grand lawn.

270

10,000

residences

square feet amenity deck

AT ITS BEST

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URBAN VILLAGE ON THE GREEN

M E MO R IAL G R E E N

Walkable lifestyle meets posh neighborhood “When I was approached to do this new store, I was like, ‘Memorial? No,’” he said. “Then I drove by and my mind exploded.” Cerón to the Houston Business Journal, on his first impression of Memorial Green.

Seeing things with fresh eyes can be mind-blowing, but opening a second studio in Memorial Green was a simple decision for Houston’s high priest of style, Cerón. Memorial Green also welcomed instantly popular Dish Society, Define Body + Mind, and the Lash Lounge, and looks forward to Clean Juice, Vine Wine Room, 18|8 Eighteen Eight men’s salon, Jonathan’s The Rub, Isle Pedi Spa, Lam Bespoke and BBVA Compass Bank opening in 2018.

Office tenants include Heritage Texas Properties and Old Republic Title.

41,300

36,700

square feet of Class-A office space

square feet of retail and restaurant space

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RELAXING RETREAT

M E MO R IAL G R E E N

Memorial’s new must-have address In an enviable location off Memorial Drive, a community of luxury homes by respected builders flanks a green yard and quiet fountains. The residential neighborhood of Memorial Green blends comfortably with high-end retail, chef-inspired restaurants, health and beauty services, plus boutique offices. The pairing of Memorial Green residential and commercial development delivers a uniquely walkable lifestyle unavailable in this posh neighborhood, until now.

91

~1

timelessly elegant homes

acre park

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MAKING HER GRAND ENTRANCE

H OTE L ALE S SAN D R A

Elevating the hotel experience With Hotel Alessandra now open at GreenStreet, Downtown Houston offers the travel savvy an elevated boutique hotel and spa experience. A sophisticated ambiance and warm hospitality welcome her guests upon entering Alessandra’s lofty grand lobby. From boardroom to ballroom, the hotel accommodates VIP events and private celebrations in high style. A chorus of rave reviews for dÊcor, hotel restaurant, Lucienne and bar, Bardot, are proof that old-world elegance never goes out of style.

20

223

story upscale boutique hotel

elegantly appointed guest rooms and suites

5,300

6,000

square feet of meeting and event space

square feet of retail space

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URBAN INNOVATION CAMPUS

G R E E N S TR E E T

An entrepreneurial ecosystem Super Bowl LI brought the world to Houston, and we threw a party like nobody’s business.

As official Super Bowl volunteer HQ, GreenStreet pulsed with activity. The NFL House, Legends Lounge and Gatorade’s VIP high-tech fitness facility, as well as pop-up shops for lululemon and Mizzen+Main spiced up the mix. The lively street scene gave a glimpse of the vibrant downtown pedestrian districts in Houston’s future.

GreenStreet welcomed new office tenant Spencer Ogden, a London-based, global recruiting firm that was drawn to collaboration-ready spaces, a perfect 100 transit score, and walk/bikeability to downtown residential, entertainment, parks and sports venues.

Preparations are underway to amenitize GreenStreet with local, unique, foodie-favorite eateries, more experiential retail like the make(her) boutique, and rotating art installations.

Combining attractive exteriors and reconfigured spaces, GreenStreet will answer Houston’s call for a more innovation-friendly, entrepreneurial ecosystem.

4

180,000

downtown city blocks

square feet of retail space

420,000

1,460

square feet of office space

attached parking spaces

100 perfect transit score

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KEEPING UP WITH THE JONES

TH E J O N E S O N M AI N

Historically hip and of-the-moment Two big announcements thrilled the Houston office market in 2017, and both focused on one city block of Main Street. WeWork entered Houston by leasing the entire building at 708 Main. The Jones on Main in the JPMorgan Chase Bank Building at 712 Main was cooking up Houston’s hippest food hall. Finn Hall was named for architect Albert Finn, designer of iconic historic structures, from the Rice Hotel and Gulf Oil Building to the San Jacinto Monument. Trendsetting once again, The Jones on Main is making an impressive encore.

10

37

stories (708 Main)

stories (712 Main)

860,000

30,000

square feet of office space

square feet of retail space

25

KINGWOOD STRONG

K I N GS HAR B O R

The heart of a community The forerunner of CITYCENTRE, Kings Harbor was Midway’s first mixed-use development.

During the aftermath of Hurricane Harvey, Kings Harbor was hardest hit of Midway’s properties, and for the first time in its history, it sustained flood damage. The community showed its attachment to “their place,” and urged Kings Harbor to come back. Second-floor office tenants resumed operations by the end of the year. Ground floor tenants are returning, even expanding. One business owner leased a second location for a different business, believing more than ever, Kings Harbor was the right place for both of her enterprises.

20

39,500

acre mixed-use destination with waterfront amenities

square feet of boutique office space

35,600 square feet of restaurant and retail space

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BREAKING GROUND

B U FFALO H E I G HT S

First of its kind Buffalo Heights phase one, a first-of-its-kind development owned by the Russell Gordy family, commenced construction. H-E-B President Scott McClelland joked about having to convince Mr. Gordy to include a prototype urban H-E-B in the upscale apartment and boutique office development at South Heights Blvd. and Washington Ave. In truth, the restlessly innovative grocer and understated tycoon share a bold vision and common passion for exploration, innovation and relentless business improvement. The St. Andrie residences and One Buffalo Heights offices will elevate the mixed-use experience of living and working in the heart of Houston, near downtown, arts and entertainment, chef-driven dining, and of course, H-E-B.

4

96,000

acres (phase one)

square feet H-E-B Washington Market

2,000

37,000

square feet of retail space

square feet of Class-A office space

936

232

parking spaces

upscale apartment homes

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A CLEAR VIEW OF

C IT YC E NTR E

Center of attention Celebrity chef Ayesha Curry and superstar restaurateur Michael Mina created a stir by announcing their Houston market entry with International Smoke at CITYCENTRE. Also keeping CITYCENTRE top of mind, a bevy of new retail offerings included Lily Rain, Hemline, Altar’d State, and Social Status. Coming in 2018: The Escape Game, Hopdoddy and the corporate headquarters of Par Pacific Holdings, Inc. (NYSE:PARR).

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625,000

acres

square feet Class-A office space

394,000

140,000

square feet of retail and restaurant space

square feet of state-of-the-art fitness and spa

C IT YC E NTR E N O R TH

Creative destruction Demolishing outdated buildings on the northern edge of CITYCENTRE gave prospective partners and tenants a clear vision of the site’s enormous potential. After removing the old buildings, a major corporate tenant expressed interest in locating a world headquarters here, and plans began to take shape for an exciting new chapter in the CITYCENTRE story.

BRIGHT POSSIBILITIES 31

FUTUREFACING

E A S T R IVE R

Transformational potential The 150-acre diamond-in-the-rough offers amazing possibilities. While Midway was refining the master plan during 2017, East River was suggested as a possible HQ2 for Amazon, and the possibility of a world-leading company making its home here sparked our imaginations.

As planning work progressed behind the scenes, Midway planted a nursery of 300 rescued trees on East River’s northern edge. We saw that its one mile of riverfront performed well during historic flooding, and the prime property firmed up its position as a key piece of the innovation ecosystem city leaders have vowed to create in Houston.

150

<1

acres

mile from downtown Houston

1+

~17

mile of waterfront on Houstonâ&#x20AC;&#x2122;s signature waterway

acres of parks and green space planned

3+

7+

miles of walk, jog and bike paths planned

synergistic uses planned

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OUR STRATEGY AT 50 AND BEYOND

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Over 50 years, Midway has grown from an industrial developer in Dallas to open in Houston and build successfully in 23 states and northern Mexico. Today, we are an investment and development firm that creates mixed-use, urban infill projects in major Texas markets.

Midway evolved to capture new opportunities for our investors and our people, and continued to thrive over the decades and through market fluctuations. While our core values remained unchanged, we continue to evolve our strategic focus and product type and to explore new markets.

We are developing places for the way people want to live and work todayâ&#x20AC;&#x201D;focused on quality of life, collaboration, wellbeing, and seamlessly connecting the built and natural environments to emphasize social interaction and physical activity.

Although you may see our message via Instagram or view our videos on your handheld devices, the heart of what we do has not changed. We are connecting with you who share our vision of making better places. Our experience shows quality and differentiation are the most certain way to create investments that will endure and enrich peopleâ&#x20AC;&#x2122;s lives. We are greeting our next half-century equipped with a strategic focus, design philosophy, and a value creation process all built to adapt and thrive.

OUR STRATEGIC FOCUS Investment & Development Approach Midway focuses on Generational Real Estate: locations that can retain long-term value through market cycles. These locations are ideally positioned for Remarkable Places: differentiated, mixed-use environments that deliver a high-quality experience.

GENERATIONAL REAL ESTATE

REMARKABLE PLACE

Design Philosophy Creating Remarkable Places protects investments against becoming a commodityâ&#x20AC;&#x201D; delivering high quality experiences in urban mixed-used developments is more difficult and takes more time, but sustaining value throughout market fluctuations rewards effort and patience.

MIXED-USE 3 OR MORE BRAND INTEGRITY SYNERGIES, INTEGRATION

EXPERIENCE UNIQUE, AUTHENTIC PUBLIC SPACE; URBAN + NATURAL

CONNECTIVITY MULTI-MODAL, WALKABILITY, COMMUNITY, SOCIAL

INNOVATION HEALTHY, SUSTAINABLE, FLEXIBLE PRODUCT

DIFFERENTIATED PREFERENCES, DESIGN, BRANDING SERVICE

DESIGN TIMELESS, QUALITY, VALUE, CUSTOMIZED

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MIDWAY VALUE CREATION PROCESS

THE MIDWAY SOLUTIONS TOOLKIT SERVED US WELL FOR 10 YEARS. NOW, WE ARE ADAPTING TO THE FUTURE WITH A NEW EVOLUTION, THE MIDWAY VALUE CREATION PROCESS:

IDENTIFY EVALUATE CREATE REFINE PRODUCE ACTIVATE MONETIZE THIS NEW PROCESS TRANSFERS KNOWLEDGE ACROSS THE TEAM WHILE TRANSMITTING INFORMATION THAT IS CRITICAL TO SUCCESS. OUR TOOLS ARE EVOLVING TO TAKE US FARTHER, FASTER AND EQUIP A GROWING TEAM TO DEPLOY INVESTMENTS MORE EFFICIENTLY.

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GIVING BACK AND LOOKING FORWARD

“I have never been more impressed with the character of the Midway team.” - Jonathan Brinsden 2017 brought Midway one of the biggest challenges we have faced, as Hurricane Harvey hit our area with the largest single rain event in recorded history. In a message to investors, partners and concerned friends around the world, our CEO, Jonathan Brinsden wrote: “You may never know the caliber of the people working shoulder to shoulder with you until they are put to the test. I can humbly tell you today that I have never been more impressed with the character of the Midway team.”

Midway’s portfolio fared remarkably well and as a team, we were strengthened. One outcome of the storm—a crowd-funding campaign for four team members whose homes were flooded—became a permanent part of our culture— MidwayCares. This program, created and funded by Midway team members, will assist individual team members in times of crisis. This year also saw the launch of Brighter Branches, a Christmas donation drive for children in SEARCH’s House of Tiny Treasures and for children of moms in the Dress for Success Houston job-readiness program. All team members also receive 12 paid volunteer days each year to share their God-given gifts serving with the charity of their choice in our community. In 2017, the opportunities to serve seemed almost as unlimited as the mercy and grace we have received.

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WE THANK YOU AND LOOK FORWARD TO OUR NEXT HALF-CENTURY TOGETHER

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2017 Advisory Board Adam Finn | D. Fort Flowers, Jr. | James Furr | James F. Jackson, Jr. | Christopher M. Job | Ron Nixon | Dan Pickering

2017 Partners & Clients (partial list) Alaska Permanent Fund Corporation | Amay Inamdar - AAI Affordable Housing | Brownstone Group | Cathexis Holdings | City of Houston | Cornerbrook Development | Dallas Police & Fire Pension System | Harrison Street Real Estate Capital LLC | Hudson Housing Capital | JPMorgan Chase | L&B Realty Advisors | Landover Development | LaSalle Investment Management | Lionstone Investments | Medvest Incorporated (Methodist) | Municipal Employees’ Retirement System (of Michigan) | NextSeed | Raimon Land | RGA Reinsurance Company | Sentinel Real Estate Corporation | SG Interests | Stockbridge | TDHCA | Texas A&M University System | Upper Kirby Redevelopment Authority | Valencia Group

Moran Award Recipients Amegy Bank | Bob Brindley | L&B Realty Advisors | Valencia Group | Jones Lang LaSalle Capital Markets | UHY Advisors | Upper Kirby Redevelopment Authority | LaSalle Investment Management | BoyarMiller | Colvill Office Properties | Cadence Bank (2017 Recipient)

2017 Foundation Recipients 12th Man Foundation | ACE Scholarships | Alzheimer’s Research Foundation | American Cancer Society | American Heart Association | ArCH Foundation | Avenue CDC | BARC Animal Shelter & Adoptions | Beyond Batten Disease Foundation | Boys & Girls Club of Greater Houston | Boys and Girls Country of Houston, Inc. | Buffalo Bayou Partnership | Building New Foundations | Canstruction Houston, Inc. | Casa De Esparanza | Champions Kids Camp | Child Advocates, Inc. | Club Outreach Ministries Inc. | Conscious Capitalism, Inc. | Covenant House Texas | Cristo Rey Corporate Work Study Program | Cystic Fibrosis Foundation | Dress for Success | Family Point | George Bush Foundation | Gracewood, Inc. | Greater Houston Community Foundation | Greater Houston Partnership, Inc. | Greater Houston Prayer Breakfast | Halo House Foundation | Handbid Silent Auction | Houston Livestock Show & Rodeo | Houston Parks Board, Inc. | Houston Public Media Foundation | Houston Zen Center | Humble Area Assistance Ministries | Humble ISD Education Foundation | JH Ranch | Kids’ Meals, Inc. | LifeHouse of Houston, Inc. | Lil Wranglers | Living Water International | Memorial Assistance Ministries, Inc. | Memorial Hermann Foundation | Mission Centers of Houston | National Military Family Association | National Multiple Sclerosis Society | Nazareth Convent | Nick Finnegan Counseling Center | Refuge Foundation | Rummel Creek PTA | Sam Houston Area Council | Scenic Texas, Inc. | SEARCH | Sports Authority Foundation | Sports Quest Inc. | Spring Branch Education Foundation | SpringSpirit Baseball | St. Jude Children’s Hospital, Inc. | Star of Hope Mission | Stoney | Creek Foundation | Susan G. Komen for the Cure | Texas A&M Foundation | The Amyotrophic Lateral Sclerosis Assoc. | The Center | The Harbor Light Choir | The Leukemia & Lymphoma Society | The Methodist Hospital Foundation | The Wikimedia Foundation | The WorkFaith Connection | TX Med Center | UH Bauer Real Estate Program | University of Houston | University of Houston Foundation | UTMDACC | Walnut Bend PTO - Spark Park | Washington QBC | West Houston Assistance Ministries Inc. | Yellowstone Academy

Approximately $4 million given to date

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