portfolio sale can be sold together or separate · presented by: cody payne 820 towers market...

820 TOWERSPresented by: Cody Payne

Market Positioning and Pricing Analysis

305 NE Loop 820 • Hurst, TX 76053

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Portfolio SaleCan be Sold Together or Separate

820 TOWERS

Hurst, TX

ACT ID Z0410131

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

Non-EndorsementsMarcus & Millichap is not affiliated with, sponsored by, or endorsed by any commercial tenant or lessee identified in this marketing package. The presence of any

corporation's 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.

DisclaimerTHIS IS A BROKER PRICE OPINION OR COMPARATIVE MARKET ANALYSIS AND SHOULD NOT BE CONSIDERED AN APPRAISAL. In making any decision that relies

upon my work, you should know that we have not followed the guidelines for development of an appraisal or analysis contained in the Uniform Standards of Professional

Appraisal Practice of the Appraisal Foundation. This information has been secured from sources we believe to be reliable, but we make no representations or warranties,

express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for

any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. Â© 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

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P R E S E N T E D B Y

Cody Payne

Associate Director

National Office and Industrial Properties Group

Fort Worth Office

Tel: (817) 932-6100

Fax: (817) 932-6110

[email protected]

License: TX 551177

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PROPERTY OVERVIEW

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PROPERTY OVERVIEW

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Marcus and Millichap is pleased to present the opportunity to acquire a stunning multi-tenant, two building office complex located at 301/305 NE

Loop 820 in the thriving city of Hurst, Texas. Tower 1 was built in 1979 and measures 57,256 square-feet, while Tower II was built in 1980 and

measures 37,870 and collectively sits on a 4.68-acre lot. Building 305 is currently leased out as a multi-tenant office building with strong historical

occupancy. Building 301 is currently vacant and offers a range of opportunities through either redevelopment or leasing out as general office. The

buildings can be purchased together or separately.

Nestled prominently in the mid-cities of the DFW Metroplex 820 Towers is strategically situated on Loop 820 delivering a traffic count exceeding

162,000 vehicles per day with easy access to 183, 121 and 377, making transportation convenient and the entire DFW easily accessible. Hurst is a

dynamic and growing community that offers a unique atmosphere and many shopping, restaurant and office amenities. The location provides a

dense population corridor with more than 265,000 people within a five-mile radius. This property is ideally located for a service hub or destination

location due to easy access to Dallas-Fort Worth International Airport and a high parking ratio.

820 Towers is an excellent prospect for potential investors and owner users with tremendous value add opportunity and offers aggressive rental

rates. The 305 Building is currently 78 percent occupied and is an excellent opportunity for potential investors looking for great cash flow, and the

ability to create value through increasing rental rates and lasing remaining vacant spaces. This type of asset is appealing to banks and financial

institutions, and debt quotes are available.

▪ Stunning Multi-Tenant Two Building Office Complex with Incredible Value-

Add Opportunity - CAN BE SOLD SEPARATELY!

▪ Numerous Renovations to Building 305 Since 2010

▪ Phenomenally Situated on Loop 820 Offering Unparalleled Exposure and

Delivering a Traffic Count Exceeding 162,000 Vehicles per Day

▪ Copious Amount of Parking with a Shared Ratio of 6.00 per 1000-Square

Feet

▪ Dense Population Corridor: 265K+ People Within Five Miles

▪ Easy Access to Multiple Highway Including: Loop 820, 183, 121 and 377

Making Transportation Throughout the Dallas/Fort Worth Metroplex

Convenient

REGIONAL MAP

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LOCAL MAP

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AERIAL PHOTO

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Downtown Fort Worth

SubjectProperty305

301

PROPERTY PHOTO

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PROPERTY PHOTO

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PROPERTY PHOTO

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Marcus & Millichap closes

more transactions than any

other brokerage firm.

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PROPERTY PHOTO

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MARKET

OVERVIEW

MARKET OVERVIEW

OVERVIEW

FORT WORTH

The Fort Worth metro is a part of the Dallas/Fort Worth Metroplex and

consists of Tarrant, Hood, Johnson, Parker, Wise and Somervell

counties. The most populous cities in the metro are Fort Worth and

Arlington, which are also some of the largest cities in the state. The

metro is home to several higher-educational institutions, including the

University of Texas at Arlington, which supplies an educated labor force

for the large and diverse employment base.

▪ Lockheed Martin Aeronautics Co. is headquartered in Air Force Plant 4 in the city of Fort Worth. It serves the Naval Air Station, also based in the metro.

▪ Healthcare is a strong economic driver, assisted by students graduating from the area’s many colleges and universities. Large employers include Texas Health Resources and University of Texas.

▪ General Motors’ assembly plant has been operating in the metro since 1954 and currently manufactures large SUVs for various divisions such as Chevrolet, GMC and Cadillac, providing numerous jobs.

▪ Local amenities include the Kimbell Art Museum, Modern Art Museum of Fort Worth, the National Cowgirl Museum and Hall of Fame, as well as rodeos at the Fort Worth Stockyards.

DEMOGRAPHICS

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ECONOMY

METRO HIGHLIGHTS

* Forecast

Sources: Marcus & Millichap Research Services; BLS; Bureau of Economic Analysis; Experian; Fortune; Moody’s Analytics; U.S. Census Bureau

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CORPORATE BASE

Major companies located in the metro include American Airlines Group, D.R.

Horton, Pier 1 Imports, Halliburton and BNSF Railway.

MILITARY PRESENCE

Naval Air Station Joint Reserve Base Fort Worth employs more than 11,000

personnel and generates a $1.3 billion annual impact to the local economy.

WORLD-RENOWNED EDUCATION SYSTEM

The many local universities include the University of Texas at Arlington, which

is the largest university in North Texas; Texas Christian University; Tarrant

County College; and Texas Wesleyan University.

2.4M

2017POPULATION:

880K

2017HOUSEHOLDS:

35

2017MEDIAN AGE:

$59,900

2017 MEDIAN HOUSEHOLD INCOME:

U.S. Median:

37.8U.S. Median:

$56,3009.6%

Growth2017-2022*:

7.5%

Growth2017-2022*:

MARKET OVERVIEW

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Metroplex hiring continues to build momentum. Dallas job creation accelerated in the

past four quarters. Toyota, Liberty Mutual, State Farm and JPMorgan Chase are

expected to add 20,000 positions this calendar year. Not surprisingly, build-to-suit

and speculative projects are under construction as developers fill the need and

capitalize on this momentum. Marketwide, nearly 11 million square feet of office

space will be completed throughout 2017, a decade high. Nevertheless, the steady

stream of corporate expansion announcements and the 4.5 percent gain in office-

using jobs registered in the last 12 months offer a strong counterbalance in demand.

Despite pockets of development, marketwide supply will match demand. As a result,

year-end 2017 vacancy will match the late-2016 rate. While submarkets such as Las

Colinas and Far North Dallas will receive significant new space, pent-up demand will

help ameliorate the short-term overhang. For example, 81 percent of active projects

are pre-leased across the two submarkets, well above the overall average of 67

percent. With four out every five feet of new office space accounted for, Class A

office vacancy is expected to remain below the average in the Metroplex’s two

largest office submarkets.

Robust Job Market Propelling

Development, Investment in Metroplex

DALLAS/FORT WORTH METRO AREA

* Trailing 12 months through 1Q17

Sources: CoStar Group, Inc.; Real Capital Analytics

Investment Trends

Office 2017 Outlook

11 million sq. ft. will be

completed

2.6% increase in

asking rents

0 basis point

change in vacancy

Construction:

Rents:

Vacancy:

After builders added 5.3 million square feet

of office space in 2016, the pace of

completions will surge 108 percent this year.

Healthy office demand contributes to an

overall rise in asking rents to $24.19 per

square foot in 2017. Last year, the average

increased 4.2 percent.

Marketwide vacancy is forecast to reach

18.3 percent at the end of the fourth quarter,

even with the prior year-end rate.

• Sturdy office-space demand in key submarkets continues to offset

development concerns. Despite substantial deliveries slated for 2017 in Las

Colinas, a steady investment appetite supported a 32 percent rise in deal

flow over the past year. Acquisitions accelerated 5 percent in the Far North

Dallas area.

• Prices surged for Class A office space occupied by top-tier tenants. Among

single-tenant office assets with 100,000 square feet or more, the average

price advanced 132 percent to $344 per square foot in the past 12 months.

The jump in values is attributable to the large number of corporate-campus

acquisitions involving strong credit tenants such as State Farm, Verizon and

Ericsson.

• Resurgent activity among local investors and owner-users in the Class C

segment provided a measured boost to medical office acquisition activity.

Overall medical office transaction velocity surged 68.4 percent in the past

12-month span.

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MARKET OVERVIEW

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• Headcounts surged by 127,500

jobs, or 3.7 percent, in the past

four quarters. The trade,

transportation and utilities and

professional and business

services sectors added 28,700

and 27,700 jobs, respectively.

• Office-using employment sectors

expanded by 41,900 workers in

the past four quarters, following

28,900 new hires during the

preceding one-year span.

EMPLOYMENT

• Builders completed 2.5 million

square feet of office space

during the first three months

of 2017, the second-largest

quarterly addition since the

start of the recovery.

• Supply in the Far North Dallas

submarket leaped by 962,000

square feet so far this year,

while Las Colinas office stock

rose by 679,000 square feet.

CONSTRUCTION

• Although marketwide vacancy

ticked up 50 basis points

since the beginning of

January, the 18.8 percent first-

quarter vacancy rate was 80

basis points below year-ago

levels.

• Net absorption of more than

5.3 million square feet in the

past year tamped down Class

A vacancy 110 basis points to

21.1 percent in March.

VACANCY

• After three years of outsize

rent gains, owners advanced

rents at a more sustainable

pace. First-quarter asking

rents of $23.98 per square foot

were up 3.8 percent annually,

after averaging 5 percent

gains yearly since 2014.

• Demand for Class A space

helped lift submarket asking

rents 4.8 percent to $24.60 per

square foot in the Las Colinas

area.

RENTS


increase in the

average asking rent

Y-O-Y

3.8%basis point decrease

in vacancy Y-O-Y80square feet

completed

Y-O-Y

6 millionincrease in total

employment Y-O-Y3.7%

* Forecast

YEAR OVER YEAR

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MARKET OVERVIEW

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Demographic Highlights

2017 FORECAST

JOB GROWTH

* POPULATION

AGE 20-34

Metro 21%U.S. Average 21%

**SQ. FT. PER OFFICE

WORKER

Metro 297U.S. Average 210

2017 OFFICE-

USING JOB

GROWTH

POPULATION OF

AGE 25+

* PERCENT WITH

BACHELOR

DEGREE+

Metro 32%U.S. Average 29%

13% Urban

87% Suburban

**OFFICE SQUARE FOOTAGE

Job Growth, Steady Cap Rates to Maintain Investment Demand

Outlook: While supply will give some

investors pause, resilient white-collar job

creation will allay short-term concerns

and underpin healthy investment demand

locally.

Vacancy

Rate

Y-O-Y

BasisPoint

Change

SubmarketAsking

Rent

Y-O-Y%

Change

Southwest Dallas 10.5% -260 $16.66 -0.2%

South Ft Worth 11.6% -30 $23.68 3.4%

Fort Worth CBD 12.2% -70 $24.98 0.2%

Lewisville/Denton 12.2% -50 $20.93 1.2%

Central Expressway 13.2% -140 $27.08 4.3%

Preston Center 13.2% -180 $35.56 6.5%

East Dallas 13.7% -10 $17.25 -0.5%

Uptown/Turtle Creek 13.7% -300 $38.30 2.1%

North Fort Worth 14.0% -200 $21.97 1.6%

Overall Metro 18.8% -80 $23.98 3.8%

Submarket Trends

Lowest Vacancy Rates 1Q17

Sales Trends


• Investment demand remained steady across the Metroplex as deal flow over the past

12 months was unchanged from the previous year. The average price appreciated

13.7 percent to $210 per square foot in the past four quarters.

• Cap rate compression eased due to rising interest rates and moderating rent gains.

Going-in yields hovered in the low-7 percent range for the last 24 months.

** Trailing 12 months through 1Q17

Pricing trend sources: CoStar Group, Inc.; Real Capital Analytics

* 2017-2022

**1Q17

U.S. Average 1.4%

Metro 1.3%

Metro 1.3%

U.S. Average 2.2%

U.S. Average 32%

U.S. Average 68%

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MARKET OVERVIEW

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• Monetary policy in transition. Despite the Fed raising its benchmark short-term rate three

times in seven months and signaling another rise before the end of the year, long-term rates

have remained stable. The yield on the 10-year U.S. Treasury bond remained in the low- to

mid-2 percent range throughout the second quarter of 2017. The Federal Reserve wants to

normalize monetary policy and, in addition to rate hikes, will start paring its balance sheet.

While short- and long-term rates do not always move in tandem, both actions by the Fed have

the potential to lift long-term rates.

• Sound economy a balancing act for Fed. With unemployment at the lowest level since 2007

at 4.3 percent, the Federal Reserve will remain vigilant regarding the possible rapid increase

in inflation if wage growth takes off. Additionally, business confidence sits close to its all-time

high. Businesses finally have the confidence to expand their footprint after years of tepid

growth following the Great Recession. Office properties stand to gain significantly from this

expansion with increased hiring adding to occupancy, plus expanding economic growth. The

Fed, however, must now balance economic growth and job creation against wage growth and

inflationary pressures.

• Underwriting discipline persists; ample debt capital remains. Overall, leverage on

acquisition loans has continued to reflect disciplined underwriting, with LTVs typically

ranging from 60 percent to 75 percent for most office properties. At the end of 2016, the

combination of higher rates, conservative lender underwriting and fiscal policy uncertainty

encouraged some investor caution that slowed deal flow, a trend that has extended into

2017. A potential easing of regulations on financial institutions, though, could liberate

additional lending capacity and higher interest rates may also encourage additional lenders

to participate. * Forecast

Sources: CoStar Group, Inc.; Real Capital Analytics


Capital Markets

820 TOWERS

PROPERTY NAME

MARKETING TEAM

820 TOWERS

DEMOGRAPHICS

Source: © 2017 Experian

Created on March 2018

POPULATION 1 Miles 3 Miles 5 Miles

▪ 2022 Projection

Total Population 9,393 89,939 262,037

▪ 2017 Estimate


▪ 2010 Census


▪ 2000 Census


▪ Current Daytime Population

2017 Estimate 13,787 91,957 236,721

HOUSEHOLDS 1 Miles 3 Miles 5 Miles

▪ 2022 Projection

Total Households 4,169 36,035 105,439

▪ 2017 Estimate


Average (Mean) Household Size 2.29 2.50 2.50

▪ 2010 Census


▪ 2000 Census


HOUSEHOLDS BY INCOME 1 Miles 3 Miles 5 Miles

▪ 2017 Estimate

$200,000 or More 2.34% 2.91% 3.09%

$150,000 - $199,999 2.35% 3.70% 4.15%

$100,000 - $149,000 12.12% 12.32% 12.58%

$75,000 - $99,999 11.72% 12.85% 13.01%

$50,000 - $74,999 22.20% 20.88% 20.47%

$35,000 - $49,999 15.22% 15.41% 15.03%

$25,000 - $34,999 10.97% 11.10% 11.31%

$15,000 - $24,999 12.35% 11.36% 11.04%

Under $15,000 14.96% 13.14% 12.47%

Average Household Income $63,623 $69,443 $71,537

Median Household Income $50,695 $53,030 $53,674

Per Capita Income $27,617 $27,357 $28,246

POPULATION PROFILE 1 Miles 3 Miles 5 Miles

▪ Population By Age

2017 Estimate Total Population 8,889 86,803 256,332

Under 20 23.89% 26.09% 26.05%

20 to 34 Years 21.54% 21.20% 21.66%

35 to 39 Years 6.56% 6.43% 6.47%

40 to 49 Years 12.69% 12.87% 12.92%

50 to 64 Years 17.85% 18.42% 19.11%

Age 65+ 17.47% 14.97% 13.82%

Median Age 38.47 37.04 36.73

▪ Population 25+ by Education Level

2017 Estimate Population Age 25+ 6,250 58,779 173,179

Elementary (0-8) 4.12% 4.47% 4.63%

Some High School (9-11) 7.88% 8.03% 8.23%

High School Graduate (12) 25.90% 27.68% 27.06%

Some College (13-15) 27.60% 26.59% 26.35%

Associate Degree Only 9.41% 8.98% 8.09%

Bachelors Degree Only 18.39% 17.11% 17.27%

Graduate Degree 5.32% 6.11% 7.04%

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PROPERTY NAME

MARKETING TEAM

820 TOWERS

DEMOGRAPHICS


Created on March 2018

POPULATION BY

TRANSPORTATION TO WORK1 Miles 3 Miles 5 Miles

▪ 2017 Estimate Total Population

Bicycle 0.06% 0.15% 0.13%

Bus or Trolley Bus 0.68% 0.11% 0.33%

Carpooled 13.62% 10.99% 9.65%

Drove Alone 80.65% 82.22% 83.50%

Ferryboat 0.00% 0.00% 0.00%

Motorcycle 1.06% 0.43% 0.28%

Other Means 0.83% 1.75% 1.84%

Railroad 0.17% 0.41% 0.29%

Streetcar or Trolley Car 0.00% 0.00% 0.02%

Subway or Elevated 0.00% 0.00% 0.01%

Taxicab 0.00% 0.06% 0.09%

Walked 0.91% 1.16% 0.97%

Worked at Home 2.00% 2.72% 2.88%

POPULATION BY TRAVEL TIME TO

WORK1 Miles 3 Miles 5 Miles

▪ 2017 Estimate Total Population

Under 15 Minutes 23.83% 24.08% 22.06%

15 - 29 Minutes 38.25% 38.42% 39.47%

30 - 59 Minutes 21.30% 26.10% 26.49%

60 - 89 Minutes 5.08% 3.71% 4.06%

90 or More Minutes 0.53% 0.78% 1.22%

Worked at Home 2.00% 2.72% 2.88%

Average Travel Time in Minutes 27 26 27

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Income

In 2017, the median household income for your selected geography is

$50,695, compare this to the US average which is currently $56,286.

The median household income for your area has changed by 23.87%

since 2000. It is estimated that the median household income in your

area will be $57,809 five years from now, which represents a change

of 14.03% from the current year.

The current year per capita income in your area is $27,617, compare

this to the US average, which is $30,982. The current year average

household income in your area is $63,623, compare this to the US

average which is $81,217.

Population

In 2017, the population in your selected geography is 8,889. The

population has changed by 4.07% since 2000. It is estimated that the

population in your area will be 9,393.00 five years from now, which

represents a change of 5.67% from the current year. The current

population is 47.48% male and 52.52% female. The median age of

the population in your area is 38.47, compare this to the US average

which is 37.83. The population density in your area is 2,829.86 people

per square mile.

Households

There are currently 3,843 households in your selected geography. The

number of households has changed by 9.02% since 2000. It is

estimated that the number of households in your area will be 4,169

five years from now, which represents a change of 8.48% from the

current year. The average household size in your area is 2.29 persons.

Employment

In 2017, there are 5,247 employees in your selected area, this is also

known as the daytime population. The 2000 Census revealed that

66.48% of employees are employed in white-collar occupations in

this geography, and 33.27% are employed in blue-collar occupations.

In 2017, unemployment in this area is 4.02%. In 2000, the average

time traveled to work was 27.00 minutes.

Race and Ethnicity

The current year racial makeup of your selected area is as follows:

74.42% White, 8.90% Black, 0.34% Native American and 3.97%

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 23.35% of the current year

population in your selected area. Compare this to the US average of

17.88%.

PROPERTY NAME

MARKETING TEAM

820 TOWERS

Housing

The median housing value in your area was $143,072 in 2017,

compare this to the US average of $193,953. In 2000, there were

1,636 owner occupied housing units in your area and there were

1,889 renter occupied housing units in your area. The median rent at

the time was $542.


DEMOGRAPHICS

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8

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DEMOGRAPHICS

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www.MarcusMillichap.com

Cody Payne

Associate Director

National Office and Industrial Properties Group

Fort Worth Office

Tel: (817) 932-6100

Fax: (817) 932-6110

[email protected]

License: TX 551177

P R E S E N T E D B Y

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portfolio sale can be sold together or separate · presented by: cody payne 820 towers market...

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