west watkins - hff

E X E C U T I V E S U M M A R Y

A Stabilized Three Building, 139,000 SF, NNN Leased High-End Office & Lab PortfolioGaithersburg, MD

WEST WATKINSP O R T F O L I O

CONFIDENTIALITY AND CONDITIONS

Holliday Fenoglio Fowler, L.P. (“HFF”) a Maryland licensed real estate broker.

This Offering Memorandum has been prepared by HFF for use by a limited number of parties and has been obtained from sources believed reliable.

While we do not doubt its accuracy, we have not verified it, and make no guarantee, warranty or representation about it. It is your responsibility to

confirm, independently, its accuracy and completeness. All projections have been developed by HFF, Owner and designated sources, are based upon

assumptions relating to the general economy, competition, and other factors beyond the control of Owner, and therefore are subject to variation. No

representation is made by HFF or Owner as to the accuracy or completeness of the information contained herein, and nothing contained herein is or

shall be relied on as a promise or representation as to the future performance of the property. Although the information contained herein is believed

to be correct, Owner and its employees disclaim any responsibility for inaccuracies and expect prospective purchasers to exercise independent due

diligence in verifying all such information. Further, HFF, Owner and its employees disclaim any and all liability for representations and warranties,

expressed and implied, contained in, or for omissions from, the Offering Memorandum or any other written or oral communication transmitted or

made available to the recipient.

The Offering Memorandum does not constitute a representation that there has been no change in the business or affairs of the property or Owner

since the date of preparation of the Offering Memorandum. Analysis and verification of the information contained in the Offering Memorandum is solely

the responsibility of the prospective purchaser. Additional information and an opportunity to inspect the property will be made available upon written

request to interested and qualified prospective investors. Owner and HFF each expressly reserve the right, at their sole discretion, to reject any or all

expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice. Owner shall

have no legal commitment or obligations to any entity reviewing this Offering Memorandum or making an offer to purchase the property unless and

until such offer is approved by Owner, a written agreement for the purchase of the property has been fully executed, delivered and approved by Owner

and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

This Offering Memorandum and the contents, except such information, which is a matter of public record or is provided in sources available to the

public, are of a confidential nature. By accepting this Offering Memorandum, you agree that you will hold and treat it in the strictest confidence, that

you will not photocopy or duplicate it, that you will not disclose this Offering Memorandum or any of the contents to any other entity (except to outside

advisors retained by you, if necessary, for your determination of whether or not to make a proposal and from whom you have obtained an agreement

of confidentiality) without the prior written authorization of Owner or HFF and that you will use the information in this Offering Memorandum for the

sole purpose of evaluating your interest in the property and you will not use the Offering Memorandum or any of the contents in any fashion or manner

detrimental to the interest of Owner or HFF If you have no interest in the property, please return the Offering Memorandum forthwith.


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EXECUTIVE SUMMARY

35 WEST WATKINS

HFF, as exclusive representative for the Owner, is pleased to present this offering for the fee simple interest in the West Watkins Portfolio (the “Portfolio”), a 3-building, 138,938 square foot office and high-end lab portfolio located at 25, 35, & 45 West Watkins Mill Road in Gaithersburg, Maryland. Stabilized with triple net leases to three tenants, the Portfolio is located in the heart of Montgomery County’s I-270 Corridor, a region that is widely regarded as one of the nation’s most important and dynamic life sciences hubs.

The design and location of these assets has made them well suited to the space and expansion plans of the many biotechnology firms based in – and relocating to – this region. This has been borne out by the history of the Portfolio’s in-place tenants, the largest of which has expanded four times since its initial occupancy 23 years ago and most recently renewed in June 2013. Notable credit tenants include two leading biotechnology firms – MedImmune (global biologics research and development division of AstraZeneca, NYSE: AZN), and Amplimmune (MedImmune/AstraZeneca subsidiary, NYSE: AZN) – who lease over 105,000 square feet (76.0% of the Portfolio) of highly sophisticated and expensive lab space through 2020 and beyond, providing investors exceptional credit and secure near-term cash flow.

Accordingly, it is these core-like characteristics of the Portfolio, coupled with the substantial commercial and residential growth occurring in the immediate Gaithersburg area, that present investors with a compelling investment opportunity today. Investors

will immediately benefit from the Portfolio’s highly attractive cash yields and strong total overall return, while positioning themselves for long-term capital appreciation in a rapidly improving and historically well-performing submarket of Washington, DC – one of the most desired real estate investment markets in the nation.


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270

CLOPPER

ROAD

WEST WATKINS MILL ROAD

FUTURE WATKINS MILL INTERCHANGE

270

METROPOLITAN GROVE STATION

LAKEFOREST MALL

MONTGOMERY VILLAGE AVENUE

QUINCE ORCHARD ROAD

MEDIMMUNE HQ

WATKINS MILL TOWN CENTER

LONGDRAFT ROAD

NISTADVENTIST HQ

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3

1

1 25 West Watkins Mill Road



WEST WATKINS PORTFOLIO

Three Quality Office/Lab Buildings Flexible office/lab buildings that have been institutionally owned and maintained and directly meet the configuration requirements of the office, R&D, and laboratory tenant users that are common throughout the I-270 Life Sciences Corridor.

Stabilized Occupancy; NNN Leases Currently 90% leased on a triple net basis to three tenants (with an LOI for another 5%), providing investors exceptional credit and secure near-term cash flow.

Irreplaceable Life Sciences Location Montgomery County, and Gaithersburg in particular, is a preferred location for biotechnology companies, making it one of the leading life sciences centers in the nation.

Watkins Mill Town Center Proximity Steps to Watkins Mill Town Center, a 200-acre, mixed-use development located directly to the northeast of the Portfolio. At full build-out, it is slated to include nearly 4.5 million square feet of Class A office, hotel, restaurants, retail and residential product surrounded by significant forest preserves and stream valley buffers.

Excellent Accessibility Access is provided via several major road systems, including I-270, Route 355 (Rockville Pike), Route 117 (Clopper Road), Route 124 (Montgomery Village Avenue), and the Intercounty Connector. Completion of the $165 million Watkins Mill Interchange will further improve access by providing direct access to I-270 and the many residential communities located throughout Suburban Maryland and the broader Washington, DC metropolitan region.

INVESTMENT HIGHLIGHTS


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STABILIZED OCCUPANCY; EXCEPTIONAL CREDIT; SECURE CASH FLOW

• 90% leased to three tenants on a triple net basis with an LOI for an additional 5%. 76.0% of the Portfolio is leased to two leading biotechnology firms –MedImmune and Amplimmune – offering investors an ideal mix of exceptional credit, surety of cash flow, and substantial remaining lease term.

• MedImmune leases both 25 and 35 West Watkins Mill Road in their entirety under leases that expire in 2020. MedImmune is the global biologics research and development division of AstraZeneca (NYSE: AZN), the 8th largest drug maker in the world with $25.7 billion in annual sales. MedImmune has leased these facilities for 23 years, most recently renewing in 2013, and already has a significant presence within the Gaithersburg submarket via its 1.3 MM RSF headquarters located 2 miles from the Portfolio along Great Seneca Highway (Rt. 119).

• Amplimmune occupies 20,570 square feet (38.0%) of 45 West Watkins Mill Road under a lease that expires in 2022. Acquired by MedImmune/AstraZeneca in 2013, the company develops immune-based biologics to treat patients in the areas of cancer, autoimmunity, transplantation and infectious diseases and works directly with several notable organizations such as Johns Hopkins University and GlaxoSmithKline.

OUTSTANDING LIFE SCIENCES CORRIDOR LOCATION; ACCESS TO AMENITIES

• Montgomery County, and the I-270 Corridor in particular, is the Washington, DC metropolitan area’s premiere location for life sciences companies and one of the nation’s leading biotechnology centers. There is over 4 million square feet of life science research companies within a 3 mile radius of the Portfolio.

• Located within a high-quality, well-established business park which is home to 15 office and flex buildings totaling over 1 million rentable square feet and occupied by several other high-profile biotechnology companies such as Qiagen, GenVec, Wellstat Therapeutics, and Human Biosciences.

• Adjacent to the 200-acre, mixed-use Watkins Mill Town Center. Additional amenities include nearby Lake Forest Mall, several restaurants, hotels, banks, and other retail and service centers.

PORTFOLIO OVERVIEW

PORTFOLIO SUMMARYPROPERTY 25 W WATKINS MILL RD 35 W WATKINS MILL RD 45 W WATKINS MILL RD

Rentable Area 32,317 RSF 52,351 RSF 54,270 RSF

Land Area 12.7 acres (shared between 25/35/45 W Watkins Mill Road)

Year Built/Renovated 1989 1989 1989

Parking Ratio 3.3/1,000 3.3/1,000 3.3/1,000

Tenancy MedImmune MedImmune Amplimmune & Montgomery County

Lease Structure NNN NNN NNN


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EXCELLENT MARKET FUNDAMENTALS & DEMAND DRIVERS

• At approximately 7.6 million square feet, the I-270 Life Sciences Corridor has grown to become one of Montgomery County’s most consistent and historically well-performing markets.

• Notable federal government agencies with a significant presence in the I-270 Corridor include the National Institutes of Health (NIH), the Food and Drug Administration (FDA), the National Institutes of Standards and Technology (NIST), National Cancer Institute (NCI), and the U. S. Census Bureau.

• Renowned educational facilities, to include Johns Hopkins University, University of Maryland’s Center for Advanced Research in Biotechnology, and the Howard Hughes Medical Institute, also create tenant demand through related entities and companies desiring proximity to these campuses.

• The Portfolio is also one mile from the new headquarters of the rapidly expanding Adventist HealthCare.

AMPLIMMUNE


Baltimore

Ashburn

Chantilly

Centreville

Herndon

Sterling

Clifton

Ashton

Brookeville

Laytonsville

Clarksburg

Buckeystown

Adamstown

Green�eldMills

Columbia

Glenelg

Dayton

Clarksville

Glenwood

Lisbon

Elkridge

Catonsville

Brooklyn

Shipley

Severn

Ridgeway

Odenton

Riva

�eDowns

Harwood

Mount Zion

Churchton

Darnall

Davidsonville

Harmans

MontgomeryVillage

Poolesville GlenBurnie

SevernaPark

Crownsville

Alexandria

Suitland

Bethesda

CarmondyHills

Arlington

LakewoodEstates

GreatFalls

Fairview

Greenbelt

Lanham Bowie

Crofton

Glenn Dale

Laurel

SilverSpring

Hyattsville

Oakton

Murray Hills

DistrictHeights

Calverton

Spencerville

Rockville

Potomac

Vienna

McLean

AnnandaleFairfax

Burke

Gaithersburg

Pasadena

Reagan Nat'l

Airport

WashingtonDulles

Int’l Airport

BaltimoreWashington

International Airport

AndrewsAir Force

Base

Fort Meade

Univ of MarylandBaltimore County

Curtis BayGSA Depot

Dundalk Marine

Terminal

Loudon ParkCemetery

WoodlawnCemetery

MarylandWholesale

Food CenterMARYLAND

WASHINGTON, DC

VIRGINIA

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95

195

695

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895

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270

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190

107

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355

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124108

650

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144

185

586

650

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390

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193185

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28

108

108100

100

175

144

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32

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32

295

295

704

208

202

193450

197178

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2

2

177

710

151

214214

468424

214

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27

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267

267

674

7100

7100

236

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210

123

259

408

408

193

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29

1

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301

30150

CONTACTSJAMES A. MEISELSenior Managing [email protected]

STEPHEN “DEK” POTTS, JR.Senior Managing [email protected]

ANDREW M. WEIRSenior Managing [email protected]

STEPHEN C. CONLEYExecutive Managing [email protected]

MATTHEW T. NICHOLSONAssociate [email protected]

1775 Pennsylvania Ave, NW 5th FloorWashington, DC 20006

202.533.2500

WEST WATKINS PORTFOLIO


west watkins - hff

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