ABSOLUTE NET LEASE S. SAM HOUSTON · 2018. 9. 14. · OFFERING SUMMARY CHARLOTTE NNN INVESTMENT OVERVIEW ABSOLUTE NET LEASE S. SAM HOUSTON OVERVIEW David Fisher, CCIM and Marcus &
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$4,986,000
7.20% Cap Rate
10-Year New Lease
Corporate Guarantee
Strong Financials
ABSOLUTE NET LEASE S. SAM HOUSTON
Offering Memorandum
10103 S. Sam Houston Pkwy. Houston, TX
2
ABSOLUTE NET LEASE S. SAM HOUSTON
Offering Memorandum
David B. Fisher, CCIMFuel & Convenience Center Investments
D. (832) 442-2828C. (936) 320-3737
david.fisher@marcusmillichap.com
License TX: 691654Activity ID: Z0860151
1450 Lake Robbins Drive, Suite 300The Woodlands, TX 77380
10103 S. Sam Houston Pkwy.Houston, TX 77075
INVESTMENT SUMMARY…Location Summary
Investment Overview
FINANCIAL ANALYSIS…
Financial Summary
REGIONAL MAP…Regional Location
Site Map
MARKET OVERVIEW…Branded Franchise
Comparable Sales
Additional Pictures
Market Overview
Demographic Analysis
TABLE OF CONTENTS
5,725 SF| NET INTERIOR AREA |
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ABSOLUTE NET LEASE S. SAM HOUSTON
S U B J EC T
Hwy 8 – 60,000 APD
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OFFERING SUMMARY
CHARLOTTE NNN
LOCATION SUMMARY
ABSOLUTE NET LEASE S. SAM HOUSTON
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OFFERING SUMMARY
CHARLOTTE NNN
INVESTMENT OVERVIEW
ABSOLUTE NET LEASE S. SAM HOUSTON
OVERVIEW
David Fisher, CCIM and Marcus & Millichap have been retained on an exclusive basis andare pleased to present the opportunity to acquire a net leased investment where Zip In -Zip Out Inc. will be the tenant under a brand new 10-year absolute net lease. Zip In Zip OutInc. is a company that has over 80-years of collective experience in developing “next-generation” fuel and convenience center investments. The subject property is located at10103 S. Sam Houston Pkwy., Houston, TX. and was constructed in 2018 withimprovements consisting of a spacious “next-generation” convenience center ofapproximately 5,725 SF, a primary fuel canopy @ 3,000 SF, and a second diesel canopy ofapprox. 750 SF that are of exceptional design and new construction.
The center consists of (5) MPDs providing 10 separate gas and diesel stations, moderndesigned convenience store with 15’ high ceilings, spacious café & deli, large prep and coldstorage areas with extensive office and dry storage space.
The property consists of approximately 58,370± SF of land (1.36± acres), the marquee signstands over 25’ high and is visible from Beltway 8 by over 62,000 westbound travelersevery day. Beltway 8 is a major arterial roadway that circles downtown Houston connectingmany communities North, South, East and West.
This exceptional net leased investment opportunity requires zero landlord responsibilitiesand is a result of the developers many years of experience in developing, opening andstabilizing successful fuel and convenience center projects. Zip In Zip Out Inc. is offering asale-leaseback arrangement with an initial 10-year obligation with six (6) 5-year options torenew and 10% rental payment increases every 5-years. The lease is backed by strongfinancials from Zip In Zip Out Inc. (See page 13 for additional corporate information.)
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OFFERING SUMMARY
CHARLOTTE NNN
INVESTMENT OVERVIEW
ABSOLUTE NET LEASE S. SAM HOUSTON
MINI-MART
The convenience store includes a Mini-Mart with an off-site beer and wine sales license,a Quick Service Restaurant (QSR) “Dickey’s Barbecue Pit”, an unbranded deli & foodcounter, and a spacious place to sit, relax and enjoy quality food in a clean and safeenvironment.
The building envelope is approximately 5,725± square feet and has stucco over steelframe construction over a concrete foundation and slab floor. The roof cover is buildupcomposition. The interior ceiling has a 15± feet elevation above slab with the top of theroof deck being 17± feet above grade. The building contains a four foot high parapetextending the exterior South and East facing walls to a 21± foot elevation above grade.The building also contains a convenient vehicle drive-through for Dickey’s BBQ café.
DISPENSER CANOPIES
The facility contains two fuel canopies containing 3,000 and 750 square feet ofarea. Both canopies have high-luminescence lighting supported by metal frameconstruction strengthened by metal poles and reinforced attractive brick façade.
The larger canopy at the South side of the property fronting the conveniencestore has an area of 3,000± square feet and covers five (5) double-sided MultipleProduct fuel Dispensers (“MPD’s) i.e., 10 fueling stations offering customersthree grades of gasoline (regular, midgrade and premium) with diesel.
The smaller canopy at the northeast side of the property has an area of 750±square feet and covers two (2) MPDs double-sided gas and diesel fuel dispensers(four fueling stations) for trucks and vehicles requiring diesel fuel.
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OFFERING SUMMARY
CHARLOTTE NNN
INVESTMENT OVERVIEW
ABSOLUTE NET LEASE S. SAM HOUSTON
UNDERGROUND FUEL TANKS
The property contains four underground fuel tanks with leak monitor systems,containment basins and related safety and EPA required improvements, whichwere all installed new in 2018. The underground tank installations conform to2018 government requirements.
Four underground tanks have a combined 30,000-gallon gasoline/diesel capacity.The primary gasoline tank with a 20,000 gallon capacity, and two additionalgasoline tanks at 5,000-gallon capacities each.
A fourth underground tank for diesel is at 15,000-gallon capacity. The gasolinetanks are partitioned into three compartments providing regular, midgrade andpremium grades of gasoline. All tanks are designed with double wall, fiber-coatedmetal construction
YARD IMPROVEMENTS
The site has a concrete surface throughout including the fuel canopy areas andabove the underground tank areas. The site has 10 automobile parking spaces inaddition to two handicapped spaces.
o Trash enclosure.o Air and water station.o 25-foot high monument sign.o Drive-through service lane supporting Dickey’s BBQ restaurant operations that
includes signage and intercoms.
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OFFERING SUMMARY
CHARLOTTE NNN
INVESTMENT OVERVIEW
ABSOLUTE NET LEASE S. SAM HOUSTON
FEATURES
o Expansive merchandise display with the cashier counter centrally located toward the rear of the floor area with ample unrestricted space for customer movement from all sides.
o Spacious deli food preparation area at the Northwest area of the interior.
o Dickey’s BBQ Pit restaurant (see menu on page 21) with convenient interior tables and chairs at the southwest corner of the interior space with drive-through service.
o Spacious top rated stainless steel walk-in coolers with 22 reach-in shelves serving both the convenience store and the restaurant franchise operation.
o Labor conscious gravity flow re-stock-dispensing shelves behind each cooler door.
o Separate men’s and women’s restrooms with extensive use of marble on walls and floor exemplify the owners commitment to quality in design details and construction.
o Large uncongested back-of-house prep and kitchen area for the Café and Deli.
o Large stainless steel walk-in freezer.
o Climate controlled “door ajar” alert system in walk-in cooler & freezer.
o Dry storage area and large private office.
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OFFERING SUMMARY
CHARLOTTE NNN
FINANCIAL SUMMARY
ABSOLUTE NET LEASE S. SAM HOUSTON
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Input for Pricing Matrix
Price $4,986,000
Pricing Variable Price
Pricing Increments $50,000
Date of Analysis 9/5/2018
Property Description Input
Property SubtypeNet Leased Auto Service -
Gas/Conv
Property Name Absolute Net S Sam Houston
Address 10103 S. Sam Houston
City Houston
State TX
Zip Code 77089
Year Built/Renovated 2018
Lot Size (Acres) 1.34 Acres
Gross Leasable Area (SF) 5,725
Zoning Retail / Commercial
Type of Ownership Fee Simple
Lease Summary
Tenant Zip In Zip Out Inc
Guarantor Corporate Guarantee
Credit Rating: Regionalk
Sale/Leaseback Yes
Lease Type Absolute Net
Lease Commencement At Close of Escrow
Initial Lease Term 10.00
Rent Increases 10% each 5-Years
Renewal Options (Summary) Six (5) Year Options
Renewal Options 5 Yr Option with 10% increase
PROPERTY SUMMARY
THE OFFERING ANNUALIZED OPERATING INFORMATION
Property Absolute Net Lease S Sam Houston INCOME
Property Address 10103 S Sam Houston Pkwy.
Houston, TX 77075
Net Operating Income $358,992
Price $4,986,000 RENT SCHEDULE
Capitalization Rate 7.20% YEAR ANNUAL RENT MONTHLY RENT RENT/SF CAP RATE
Price/SF $870.92 Current $358,992 $29,916 $62.71 7.20%
Years 1 - 5 $358,992 $29,916 $62.71 7.20%
PROPERTY DESCRIPTION Years 6 - 10 $394,891 $32,908 $68.98 7.92%
Year Built / Renovated 2018
Gross Leasable Area 5,725 SF
Zoning Retail / Commercial $0
Type of Ownership Fee Simple $0
Lot Size 1.34 Acres $0
$0
LEASE SUMMARY $0
Property Subtype Net Leased Auto Service - Gas/Conv $0
Tenant Zip In Zip Out Inc.
Rent Increases 10% Every Five Years
Guarantor Corporate Guarantee
Lease Type Absolute Net $0
Lease Commencement At Close of Escrow $0.00
Initial Lease Term 10-Years 1: Assumes Total Expenses remain constant. Please see agent for details.
Renewable Options Six (5) Year Options
Landlord Responsibility Zero
Tenant ResponsibilityAll Expenses including Roof, Structure
and Subteranian
Right of First
Refusal/OfferNo
OFFERING SUMMARY
CHARLOTTE NNN
FINANCIAL SUMMARY
ABSOLUTE NET LEASE S. SAM HOUSTON
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OFFERING SUMMARY
CHARLOTTE NNN
FINANCIAL SUMMARY
ABSOLUTE NET LEASE S. SAM HOUSTON
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CAP Rate Price Price/SFInitial
Cash-on-Cash
LEASE SUMMARY7.35% $4,886,000 $853.45 8.12%
7.27% $4,936,000 $862.18 7.87%
7.20% $4,986,000 $870.92 7.63% Tenant: Absolute Net S Sam Houston
7.13% $5,036,000 $879.65 7.39% Guarantor: Corporate Guarantee
7.06% $5,086,000 $888.38 7.16% Credit Rating: Regionalk
Rent Commencement: At Close of Escrow
Operating Information Initial Lease Term 10 Years
NOI as of 2023 $358,992
Options:
5 Yr Option with 10% increase
2023
2028
2033
2038
2043
Rent/SF $62.71
Gross Leasable Area 5,725 SF
Financing Lease Type: Absolute Net
New Acquisition Financing $3,490,200
Loan To Value 70.00%$62.71/SF
$5.23/SF/Month
$358,992 Annual Rent
Interest Rate 5.00% Base Rent:
Amortization Period 25 Years
Loan Constant 7.02%
Annual Debt Service Payment $244,840Rent Increases: 10% each 5-Years
Year 1 Debt Service Coverage 1.47
Year 1 Debt Yield 10.29%
Year 1 Net Cash Flow After Debt Service $114,152
OFFERING SUMMARY
CHARLOTTE NNN
REGIONAL MAP
ABSOLUTE NET LEASE S. SAM HOUSTON
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ABSOLUTE NET LEASE S. SAM HOUSTON
OFFERING SUMMARY
CHARLOTTE NNN
NEIGHBORHOOD LOCATION
ABSOLUTE NET LEASE S. SAM HOUSTON
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ABSOLUTE NET LEASE S. SAM HOUSTON
OFFERING SUMMARY
CHARLOTTE NNN
SITE MAP
ABSOLUTE NET LEASE S. SAM HOUSTON
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60k APD
STRONG LOCAL & NATIONAL BRANDING
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ABSOLUTE NET LEASE S. SAM HOUSTON
o In 1941, Travis Dickey founded Dickey’s Barbecue Pit in Dallas, Texas with itsoriginal location still in operation. The restaurant began franchising in 1994.Technomic named Dickey’s Barbecue Pit the “Fastest-growing restaurant chainin the country” in 2012. That year, QSR Magazine included Dickey’s BarbecuePit on its list of "Best Franchise Deals.
o Chevron Corporation is an American multinational energy corporation.One of the successor companies of Standard Oil, it is headquartered in SanRamon, California, and active in more than 180 countries. Chevron is oneof the world's largest oil companies; as of 2017, it ranked nineteenth inthe Fortune 500 list of the top US closely held and public corporations.
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o Zip In Zip Out Corporation is a Texas Corporation formed in 2018 andbased in Houston, Texas. Founded by three brothers with a combined 80+years of Fuel & C-Store industry experience successfully developing andhaving owned and operated over 30 fuel and convenience centerproperties. In 2016 they developed the Zip In Zip Out new generation C-Store concept that addresses the changing needs of the travelling publicand local communities where the stores are located. The owners haveretained six Zip In Zip Out branded stores within the Houston area andintend to offer franchise opportunities moving forward. Funds from thissale-leaseback will assist in their direct development and franchiseopportunity expansion plans.
o The Zip In Zip Out brand has become the “Next-Generation” fuel andconvenience center standard by which other similar asset types aremeasured. Quality design, construction, and strong management willgenerate safe passive-investment returns backed by a strong balance sheetwith zero management responsibilities. The new lease will indemnifyinvestor 100% from any environmental concerns as the tenant will remain100% accountable. Note: Owners have a perfect environmental record!
MARKET
COMPARABLESCOMPARABLES
OFFERING SUMMARY
CHARLOTTE NNN
HOUSTON – SOUTHBELT ELLINGTON
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ABSOLUTE NET LEASE S. SAM HOUSTON
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ABSOLUTE NET LEASE SOUTH SAM HOUSTON
COMPARABLES MAP
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ABSOLUTE NET LEASE SOUTH SAM
HOUSTON
(SUBJECT)
7–Eleven and Shell Gas
and Convenience Station
Stripes
7-11 VALLEY RIDGE
Murphy Express Ground
Lease
7-Eleven
Circle K
Stripes Convenience Store
Jiffy Lube
Jiffy Lube
SALES COMPARABLES
1
2
3
4
5
7
8
6
9
18
Avg. 6.22%
0.0
0.8
1.6
2.4
3.2
4.0
4.8
5.6
6.4
7.2
8.0
ABSOLUTENET LEASESOUTH SAMHOUSTON
7–Elevenand ShellGas and
ConvenienceStation
Stripes 7-11 VALLEYRIDGE
MurphyExpressGroundLease
7-Eleven Circle K StripesConvenience
Store
Jiffy Lube Jiffy Lube-2
PROPERTY NAMEABSOLUTE NET LEASE SOUTH SAM HOUSTON
SALES COMPARABLES
Average Cap Rate
SALES COMPARABLES SALES COMPS AVG
19
Avg. $956.07
$0.00
$300.00
$600.00
$900.00
$1,200.00
$1,500.00
$1,800.00
$2,100.00
$2,400.00
$2,700.00
$3,000.00
ABSOLUTENET LEASESOUTH SAMHOUSTON
7–Elevenand ShellGas and
ConvenienceStation
Stripes 7-11 VALLEYRIDGE
MurphyExpressGroundLease
7-Eleven Circle K StripesConvenience
Store
Jiffy Lube Jiffy Lube-2
PROPERTY NAMEABSOLUTE NET LEASE SOUTH SAM HOUSTON
SALES COMPARABLES
Average Price Per Square Foot
SALES COMPARABLES SALES COMPS AVG
PROPERTY NAME
MARKETING TEAM
ABSOLUTE NET LEASE SOUTH SAM HOUSTON
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
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SALES COMPARABLES
SUBJECT PROPERTY
Asking Price $4,986,000
Price/SF $870.92
CAP Rate 7.20%
GLA 5,725 SF
Lot Size 1.34 acre(s)
Year Built 2018
Lease Term Remaining 2048.0 Years
ABSOLUTE NET LEASE SOUTH SAM HOUSTON
10103 S Sam Houston Pkwy E, Houston, TX, 770891
Close Of Escrow 3/4/2016
Sales Price $2,882,296
Price/SF $480.38
CAP Rate 5.75%
GLA 6,000 SF
Year Built 1990
7–ELEVEN AND SHELL GAS AND CONVENIENCE STATION26730 East Highway 380, Little Elm, TX, 76227
2
Close Of Escrow 2/18/2016
Days On Market 129
Sales Price $4,195,000
Price/SF $840.51
CAP Rate 6.43%
GLA 4,991 SF
Lot Size 1.15 Acres
STRIPES708 US Hwy 77, Schulenburg, TX, 78956
PROPERTY NAME
MARKETING TEAM
ABSOLUTE NET LEASE SOUTH SAM HOUSTON
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
21
SALES COMPARABLES
3
Close Of Escrow 12/30/2016
Sales Price $3,100,000
Price/SF $1,033.33
CAP Rate 4.72%
GLA 3,000 SF
Year Built 1998
7-11 VALLEY RIDGE900 Valley Ridge Blvd, Lewisville, TX, 75077
4
Close Of Escrow 7/3/2018
Days On Market 91
Sales Price $2,912,621
Price/SF $2,427.18
CAP Rate 5.15%
GLA 1,200 SF
Lot Size 1.24 acre(s)
Year Built 2018
MURPHY EXPRESS GROUND LEASEAlt Highway 90 & University Blvd, Sugar Land, TX, 77478
5
Close Of Escrow 4/26/2018
Days On Market 356
Sales Price $3,402,709
Price/SF $719.69
CAP Rate 6.40%
GLA 4,728 SF
Lot Size 1.39 acre(s)
Year Built 2006
7-ELEVEN5500 West MIle 7 Road , Mission, TX, 78574
PROPERTY NAME
MARKETING TEAM
ABSOLUTE NET LEASE SOUTH SAM HOUSTON
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
22
SALES COMPARABLES
6
Close Of Escrow 11/8/2017
Sales Price $2,570,000
Price/SF $854.10
CAP Rate 6.00%
GLA 3,009 SF
Lot Size 0.55 acre(s)
Year Built 1999
CIRCLE K1701 S 10th St, McAllen, TX, 78503
7
Close Of Escrow 3/20/2015
Days On Market 281
Sales Price $3,100,000
Price/SF $770.00
CAP Rate 7.05%
GLA 4,026 SF
Lot Size 1.387 Acres
Year Built 2002
STRIPES CONVENIENCE STORE4420 West University Drive, Edinburg, TX, 78539
8
Tenants Lease Type
Close Of
Escrow:12/20/2005
Days On
Market:111
Sales Price: $1,443,890
Price/SF: $832.69
CAP Rate: 7.20%
Year Built: 1997
JIFFY LUBE13102 Louetta Rd, Cypress, TX, 77429
PROPERTY NAME
MARKETING TEAM
ABSOLUTE NET LEASE SOUTH SAM HOUSTON
SALES COMPARABLES
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
rentpropertyname1
rentpropertyaddress1
23
SALES COMPARABLES
9
Tenants Lease Type
Close Of
Escrow:12/9/2005
Days On
Market:100
Sales Price: $1,159,048
Price/SF: $646.79
CAP Rate: 7.25%
Year Built: 1997
JIFFY LUBE4835 Louetta Rd, Spring, TX, 77388
OFFERING SUMMARY
CHARLOTTE NNN
ADDITIONAL PICTURES
ABSOLUTE NET LEASE S. SAM HOUSTON
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OFFERING SUMMARY
CHARLOTTE NNNABSOLUTE NET LEASE S. SAM HOUSTON
MISCELANEOUS PICTURES
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MARKET
OVERVIEW
MARKET OVERVIEW
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ABSOLUTE NET LEASE S. SAM HOUSTON
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Hobby Airport 3-Mi From Subject
HOUSTONOVERVIEW
1
As the fifth most populous metro area in the U.S., Houston houses
nearly 6.9 million people in southeastern Texas. The market is
composed of nine counties: Harris, Galveston, Brazoria, Fort Bend,
Chambers, Montgomery, Austin, Liberty and Waller. The Gulf of
Mexico, which borders the metro to the southeast, provides access to
markets around the world via the Port of Houston, making it a prime
location for exports. Local industries have diversified from oil to
technology and healthcare. Many companies provide goods and
services for the large population growth, which has sprawled, primarily
to the north and west. The city of Houston is the largest in the metro
with 2.3 million residents.
METRO HIGHLIGHTS
CORPORATE GROWTH
Houston will remain a top destination for corporate
relocations due to its business-friendly environment.
Twenty Fortune 500 companies are headquartered
in the metro.
HIGHER EDUCATION
Over 40 post-secondary educational institutions are
located in the metro. Nearly 30 percent of residents
have attained a bachelor’s degree, with 11 percent
also holding a graduate or professional degree.
LOW COST OF LIVING, DOING BUSINESS
Houston has a lower cost of living than many major
metros, no state income tax and a median home
price below the national level.
MARKET OVERVIEW
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ABSOLUTE NET LEASE S. SAM HOUSTON
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MARKET OVERVIEW
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ABSOLUTE NET LEASE S. SAM HOUSTON
ECONOMY▪ The economy is diversifying to include biotechnology, distribution, nanotechnology and
logistics; the metro is the center of the energy production with roughly 260,000 workers.
▪ Local product manufacturing is a large segment of the economy and includes paper,
electrical and electronic machinery, iron, steel and petrochemicals.
▪ Healthcare is gaining economic prominence. Specialized medical education and training
institutions boost the local economy and supply a growing hospital system.
▪ The Port of Houston is one of the country’s busiest for exports, supplying thousands of jobs
and generating billions of dollars in revenue.
SHARE OF 2017 TOTAL EMPLOYMENT
MAJOR AREA EMPLOYERS
Memorial Hermann Healthcare System
University of Texas
The Kroger Co.
Exxon Mobil Corp.
Shell Oil Co.
Houston Methodist
United Continental Holdings
Baker Hughes Inc.
CHI St. Luke’s Health
Hewlett Packard Enterprise* Forecast
MANUFACTURING8%
GOVERNMENT
HEALTH SERVICES
EDUCATION AND
OTHER SERVICES AND MINING
+NATURAL RESOURCES
3%
LEISURE AND HOSPITALITY FINANCIAL ACTIVITIES
20%
AND UTILITIES
TRADE, TRANSPORTATION CONSTRUCTION
PROFESSIONAL AND
BUSINESS SERVICES
4%INFORMATION AND
16%
7%
14% 10% 5%
13%
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MARKET OVERVIEW
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ABSOLUTE NET LEASE S. SAM HOUSTON
DEMOGRAPHICS
▪ The Houston metro is expected to add 506,600 people through 2022 and roughly
111,500 of these residents will be millennials in the 20- to 34-year-old cohort.
▪ During the same period, nearly 229,500 households will be formed, generating
demand for housing.
▪ The homeownership rate of 61 percent is below the national rate of 64 percent. The
median home price of $247,200 is also below that the U.S.
Outdoor activities abound in Houston as a result of the city’s favorable location and climate.
More than a dozen state parks and recreation areas lie within a short drive of Houston, as
well as more than 500 parks and open spaces and various cultural venues and museums.
Johnson Space Center is a popular tourist and educational destination. The metro is also
known internationally for its medical community and is home to the Texas Medical Center,
the largest of its kind in the world. Houston is home to four professional sports teams: the
Houston Texans, the Houston Astros, the Houston Rockets and the Houston Dynamo.
* Forecast
Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s
Analytics; U.S. Census Bureau
QUALITY OF LIFE
2017 Population by Age
0-4 YEARS
7%5-19 YEARS
22%20-24 YEARS
7%25-44 YEARS
29%45-64 YEARS
24%65+ YEARS
10%
SPORTS
EDUCATION
ARTS & ENTERTAINMENT
34.1
2017MEDIAN AGE:
U.S. Median:
37.8
$60,300
2017 MEDIAN HOUSEHOLD INCOME:
U.S. Median:
$56,300
6.9M
2017POPULATION:
Growth2017-2022*:
7.4%
2.4M
2017HOUSEHOLDS:
9.6%
Growth2017-2022*:
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MARKET OVERVIEW
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ABSOLUTE NET LEASE S. SAM HOUSTON
HOUSTON METRO AREAPost-Hurricane Recovery Boosts Retail
Spending, Draws Investors
Local residents rebuilding after floods, sales rise. Economic growth is returning to Houston as the metro
emerges from the damage created by Hurricane Harvey and struggles stemming from the decline in energy
prices in previous years. In 2018, job additions will rise, with local organizations creating more positions than
the previous three years combined. Strengthening employment and recovery efforts related to the hurricane
will provide an additional boost to retail consumption this year, and retail sales are expected to rise faster than
the national pace. Local households replacing goods lost during the flooding will help lift spending, while
residents temporarily relocating to assist with rebuilding efforts raise sales at restaurants, grocery stores and
other needs-based retailers. As a result, retailers continue to expand in the metro this year, and grocers such
as Kroger and H-E-B will open multiple locations on the west and north sides of Houston. Fitness centers,
dollar stores, plus numerous restaurant and entertainment options will open this year, helping keep vacancy
60 basis points below the 10-year average.
Development in West Houston attracts investors. The increasingly diverse population propelled the Houston
retail segment in recent years, keeping buyers interested in the local market. The metro is poised for an
increase in trading volume this year, however, as staffing in the oil and gas industry has stabilized and new
opportunities are presented in western submarkets. This side of the metro will receive an influx of new
properties as development continues along the Grand Parkway. Grocery-anchored retail centers are in high
demand, often trading in the mid-6 percent area. Meanwhile, strip-center assets with service-oriented tenants
pique buyer interest, often changing hands in the low-7 percent span. Properties in West Houston submarkets
such as Katy, Sugar Land out toward the Grand Parkway, and up to The Woodlands will draw strong buyer
demand this year.
* Forecast
Sources: Marcus & Millichap Research Services; BLS; CoStar Group, Inc.
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MARKET OVERVIEW
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ABSOLUTE NET LEASE S. SAM HOUSTON
HOUSTON METRO AREA
2018 Market Forecast
Higher vacancy than a large share of markets plus slow rent gains pull
Houston down four spots this year.
Employers will create 75,000 positions in 2018 following the addition of
45,000 jobs in 2017.
Delivery volume slows after the completion of nearly 5.6 million square feet
in 2017. Sugar Land and Conroe each welcome more than 400,000 square
feet of new supply in 2018.
Vacancy rises for a second year, reaching 6.0 percent in 2018 as 2 million
square feet of retail space is absorbed.
The average asking rent advances to $17.12 per square foot, increasing for
a second consecutive year.
Retail assets in heavily flooded areas of Houston could be value-add targets
this year. Owners in these locales may choose to dispose of properties in
lieu of renovating, while others may divest as some tenants are unable to
reopen stores.
* Forecast
Sources: Marcus & Millichap Research Services; CoStar Group, Inc.;
Real Capital Analytics
NRI Rank
30, down 4 places
Employment
up 2.5%
Construction
2.9 million sq. ft.
Vacancy
up 20 bps
Rent
up 1.5%
Investment
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ABSOLUTE NET LEASE S. SAM HOUSTON
DEMOGRAPHICS
Source: © 2017 Experian
Created on May 2018
POPULATION 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Population 18,004 134,747 259,201
▪ 2017 Estimate
Total Population 16,465 121,467 240,732
▪ 2010 Census
Total Population 14,501 107,223 216,103
▪ 2000 Census
Total Population 9,933 71,183 161,294
▪ Current Daytime Population
2017 Estimate 11,956 98,661 212,510
HOUSEHOLDS 1 Miles 3 Miles 5 Miles
▪ 2022 Projection
Total Households 5,202 43,935 85,571
▪ 2017 Estimate
Total Households 4,663 38,829 77,817
Average (Mean) Household Size 3.39 3.09 3.05
▪ 2010 Census
Total Households 4,176 34,688 70,493
▪ 2000 Census
Total Households 3,122 24,643 55,546
▪ Occupied Units
2022 Projection 5,202 43,935 85,571
2017 Estimate 4,737 40,588 82,421
HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles
▪ 2017 Estimate
$150,000 or More 7.95% 7.27% 8.06%
$100,000 - $149,000 17.09% 14.72% 14.52%
$75,000 - $99,999 18.92% 14.52% 13.62%
$50,000 - $74,999 24.17% 19.90% 18.04%
$35,000 - $49,999 13.22% 15.35% 14.93%
Under $35,000 18.66% 28.23% 30.82%
Average Household Income $80,163 $72,486 $73,689
Median Household Income $67,210 $56,934 $55,044
Per Capita Income $22,701 $23,188 $23,836
HOUSEHOLDS BY EXPENDITURE 1 Miles 3 Miles 5 MilesTotal Average Household Retail Expenditure
$75,117 $66,993 $65,212
▪ Consumer Expenditure Top 10 Categories
Housing $19,578 $17,576 $17,048
Transportation $15,597 $13,686 $13,319
Shelter $10,398 $9,388 $9,109
Food $8,418 $7,476 $7,249
Personal Insurance and Pensions $7,215 $5,982 $5,753
Health Care $5,045 $4,375 $4,247
Utilities $4,759 $4,302 $4,201
Entertainment $2,841 $2,467 $2,402
Household Furnishings and Equipment
$2,306 $2,008 $1,933
Cash Contributions $1,903 $1,628 $1,606
POPULATION PROFILE 1 Miles 3 Miles 5 Miles
▪ Population By Age
2017 Estimate Total Population 16,465 121,467 240,732
Under 20 32.72% 32.13% 31.86%
20 to 34 Years 21.51% 23.42% 23.25%
35 to 39 Years 7.60% 7.74% 7.46%
40 to 49 Years 13.59% 12.72% 13.03%
50 to 64 Years 16.16% 14.99% 15.40%
Age 65+ 8.41% 8.99% 8.99%
Median Age 32.18 31.60 31.79
▪ Population 25+ by Education Level
2017 Estimate Population Age 25+ 9,896 73,662 146,511
Elementary (0-8) 6.71% 9.20% 10.16%
Some High School (9-11) 10.23% 11.01% 11.31%
High School Graduate (12) 30.31% 28.15% 27.28%
Some College (13-15) 22.68% 22.81% 22.76%
Associate Degree Only 7.25% 6.22% 6.16%
Bachelors Degree Only 14.32% 14.60% 14.39%
Graduate Degree 4.96% 5.57% 5.64%
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1#
ABSOLUTE NET LEASE S. SAM HOUSTON
Income
In 2017, the median household income for your selected geography is
$67,210, compare this to the US average which is currently $56,286.
The median household income for your area has changed by 22.27%
since 2000. It is estimated that the median household income in your
area will be $75,817 five years from now, which represents a change
of 12.81% from the current year.
The current year per capita income in your area is $22,701, compare
this to the US average, which is $30,982. The current year average
household income in your area is $80,163, compare this to the US
average which is $81,217.
Population
In 2017, the population in your selected geography is 16,465. The
population has changed by 65.76% since 2000. It is estimated that the
population in your area will be 18,004.00 five years from now, which
represents a change of 9.35% from the current year. The current
population is 49.50% male and 50.50% female. The median age of the
population in your area is 32.18, compare this to the US average
which is 37.83. The population density in your area is 5,245.03 people
per square mile.
Households
There are currently 4,663 households in your selected geography. The
number of households has changed by 49.36% since 2000. It is
estimated that the number of households in your area will be 5,202
five years from now, which represents a change of 11.56% from the
current year. The average household size in your area is 3.39
persons.
Employment
In 2017, there are 1,618 employees in your selected area, this is also
known as the daytime population. The 2000 Census revealed that
64.52% of employees are employed in white-collar occupations in this
geography, and 35.28% are employed in blue-collar occupations. In
2017, unemployment in this area is 5.11%. In 2000, the average time
traveled to work was 30.00 minutes.
Race and Ethnicity
The current year racial makeup of your selected area is as follows:
51.40% White, 12.62% Black, 0.03% Native American and 14.17%
Asian/Pacific Islander. Compare these to US averages which are:
70.42% White, 12.85% Black, 0.19% Native American and 5.53%
Asian/Pacific Islander. People of Hispanic origin are counted
independently of race.
People of Hispanic origin make up 56.26% of the current year
population in your selected area. Compare this to the US average of
17.88%.
Housing
The median housing value in your area was $135,862 in 2017,
compare this to the US average of $193,953. In 2000, there were
2,531 owner occupied housing units in your area and there were 591
renter occupied housing units in your area. The median rent at the
time was $594.
Source: © 2017 Experian
DEMOGRAPHICS
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1
DEMOGRAPHIC MAP
#
ABSOLUTE NET LEASE S. SAM HOUSTON
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N E T L E A S E D D I S C L A I M E R
Marcus & Millichap hereby advises all prospective purchasers of Net Leased property as follows:
The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has
not and will not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap
makes no guarantee, warranty or representation whatsoever about the accuracy or completeness of any information provided.
As the Buyer of a net leased property, it is the Buyer’s responsibility to independently confirm the accuracy and completeness of all material
information before completing any purchase. This Marketing Brochure is not a substitute for your thorough due diligence investigation of this
investment opportunity. Marcus & Millichap expressly denies any obligation to conduct a due diligence examination of this Property for Buyer.
Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for example only and do not represent the current or future
performance of this property. The value of a net leased property to you depends on factors that should be evaluated by you and your tax, financial
and legal advisors.
Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, independent investigation of any net leased property to
determine to your satisfaction with the suitability of the property for your needs.
Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully
review all legal and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an
important consideration, it is not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or
newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the
area. Returns are not guaranteed; the tenant and any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other
material terms of the lease; cash flow may be interrupted in part or in whole due to market, economic, environmental or other conditions.
Regardless of tenant history and lease guarantees, Buyer is responsible for conducting his/her own investigation of all matters affecting the intrinsic
value of the property and the value of any long-term lease, including the likelihood of locating a replacement tenant if the current tenant should
default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential replacement tenant considering the
location of the property, and Buyer’s legal ability to make alternate use of the property.
By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and hold it harmless from any kind
of claim, cost, expense, or liability arising out of your investigation and/or purchase of this net leased property.
35
Confidentiality and Disclaimer
The information contained in the following Marketing Brochure is proprietary and strictly confidential. It is intended to be reviewed only by the
party receiving it from Marcus & Millichap Real Estate Investment Services, Inc. ("Marcus & Millichap") and should not be made available to any
other person or entity without the written consent of Marcus & Millichap. This Marketing Brochure has been prepared to provide summary,
unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information
contained herein is not a substitute for a thorough due diligence investigation. Marcus & Millichap has not made any investigation, and makes no
warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the
property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB's or
asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon, or the financial condition or
business prospects of any tenant, or any tenant's plans or intentions to continue its occupancy of the subject property. The information contained
in this Marketing Brochure has been obtained from sources we believe to be reliable; however, Marcus & Millichap has not verified, and will not
verify, any of the information contained herein, nor has Marcus & Millichap conducted any investigation regarding these matters and makes no
warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take
appropriate measures to verify all of the information set forth herein. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate
Investment Services, Inc. © 2018 Marcus & Millichap. All rights reserved.
THE TEXAS REAL ESTATE COMMISSION (TREC) REGULATES REAL ESTATE BROKERS AND SALES AGENTS, REAL ESTATE
INSPECTORS,HOME WARRANTY COMPANIES, EASEMENT AND RIGHT-OF-WAY AGENTS AND TIMESHARE INTEREST PROVIDERS.
YOU CAN FIND MORE INFORMATION AND CHECK THE STATUS OF A LICENSE HOLDER AT WWW.TREC.TEXAS.GOV. YOU CAN SEND
A COMPLAINT AGAINST A LICENSE HOLDER TO TREC. A COMPLAINT FORM IS AVAILABLE ON THE TREC WEBSITE. TREC
ADMINISTERS TWO RECOVERY FUNDS WHICH MAY BE USED TO SATISFY A CIVIL COURT JUDGMENT AGAINST A BROKER, SALES
AGENT, REAL ESTATE INSPECTOR, OR EASEMENT OR RIGHT-OF-WAY AGENT, IF CERTAIN REQUIREMENTS ARE MET. IF YOU HAVE
QUESTIONS OR ISSUES ABOUT THE ACTIVITIES OF A LICENSE HOLDER, THE COMPLAINT PROCESS OR THE RECOVERY FUNDS,
PLEASE VISIT THE WEBSITE OR CONTACT TREC AT:
TEXAS REAL ESTATE COMMISSION
P.O. BOX 12188
AUSTIN, TEXAS 78711-2188
(512) 936-3000
Non-Endorsement Notice
Marcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The
presence of any corporations logo or name is not intended to indicate or imply affiliation with, or sponsorship or endorsement by, said corporation
of Marcus & Millichap, its affiliates or subsidiaries, or any agent, product, service, or commercial listing of Marcus & Millichap, and is solely
included for the purpose of providing tenant lessee information about this listing to prospective customers.
ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY.
PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.
ABSOLUTE NET LEASE SAM HOUSTON
ACT ID Z0860151
N O N - E N D O R S E M E N T A N D D I S C L A I M E R N O T I C E
36
TEXAS BROKERAGE | SERVICES FORM
INFORMATION ABOUT BROKERAGE SERVICESTexas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.
TYPES OF REAL ESTATE LICENSE HOLDERS:• A BROKER is responsible for all brokerage activities, including acts performed by sales agents sponsored by the broker.• A SALES AGENT must be sponsored by a broker and works with clients on behalf of the broker.
A BROKER’S MINIMUM DUTIES REQUIRED BY LAW (A client is the person or party that the broker represents):• Put the interests of the client above all others, including the broker’s own interests;• Inform the client of any material information about the property or transaction received by the broker;• Answer the client’s questions and present any offer to or counter-offer from the client; and• Treat all parties to a real estate transaction honestly and fairly.
A LICENSE HOLDER CAN REPRESENT A PARTY IN A REAL ESTATE TRANSACTION:
AS AGENT FOR OWNER (SELLER/LANDLORD): The broker becomes the property owner's agent through an agreement with the owner, usually in a written listing to sell or property management agreement. An owner's agent must perform the broker’s minimum duties above and must inform the owner of any material information about the property or transaction known by the agent, including information disclosed to the agent or subagent by the buyer or buyer’s agent.
AS AGENT FOR BUYER/TENANT: The broker becomes the buyer/tenant's agent by agreeing to represent the buyer, usually through a written
representation agreement. A buyer's agent must perform the broker’s minimum duties above and must inform the buyer of any material information about the property or transaction known by the agent, including information disclosed to the agent by the seller or seller’s agent.
AS AGENT FOR BOTH - INTERMEDIARY: To act as an intermediary between the parties the broker must first obtain the written agreement of each party to the transaction. The written agreement must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker's obligations as an intermediary. A broker who acts as an intermediary:Must treat all parties to the transaction impartially and fairly;
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Information available at www.trec.texas.govRegulated by the Texas Real Estate Commission
IABS 1-0
Marcus & Millichap 9002994 tim.speck@marcusmillichap.com 972-755-5200Licensed Broker /Broker Firm Name or Primary Assumed Business Name License No. Email Phone
Tim A. Speck 432723 tim.speck@marcusmillichap.com 972-755-5200Designated Broker of Firm License No. Email Phone
Ford Noe 709695 ford.noe@marcusmillichap.com 713-452-4200Licensed Supervisor of Sales Agent/Associate License No. Email Phone
David Fisher 691654 David.fisher@marcusmillichap.com 832-442-2828
▪ May, with the parties' written consent, appoint a different license holder associated with the broker to each party (owner and buyer) to communicate with, provide opinions and advice to, and carry out the instructions of each party to the transaction.
▪ Must not, unless specifically authorized in writing to do so by the party, disclose:• that the owner will accept a price less than the written asking price;• that the buyer/tenant will pay a price greater than the price submitted in a written offer; and• any confidential information or any other information that a party specifically instructs the broker in writing not to disclose, unless
required to do so by law.
AS SUBAGENT: A license holder acts as a subagent when aiding a buyer in a transaction without an agreement to represent the buyer. A subagentcan assist the buyer but does not represent the buyer and must place the interests of the owner first.
TO AVOID DISPUTES, ALL AGREEMENTS BETWEEN YOU AND A BROKER SHOULD BE IN WRITING AND CLEARLY ESTABLISH:The broker’s duties and responsibilities to you, and your obligations under the representation agreement. Who will pay the broker for services provided to you, when payment will be made and how the payment will be calculated.
LICENSE HOLDER CONTACT INFORMATION: This notice is being provided for information purposes. It does not create an obligation for you to use the broker’s services. Please acknowledge receipt of this notice below and retain a copy for your records.
____________/____________/____________/____________ __________Buyer / Tenant / Seller / Landlord Initials Date
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Activity ID: Z0860151
www.MarcusMillichap.com
David Fisher, CCIM
Fuel | Convenience Center Investments
Tel: (832) 442-2828
Fax: (832) 442-2810
Marcus & Millichap
1450 Lake Robbins Rd. Suite 300
The Woodlands, TX 77380
david.fisher@marcusmillichap.com
Licenses: CA 691654, TX 691654
P R E S E N T E D B Y
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