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OF F E R I N G S U M M ARYASHFORD OAKSSAN ANTONIO
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EXECUTIVE SUMMARY3
EXECUTIVE SUMMARYJones Lang LaSalle (“JLL”), as exclusive advisor, is pleased to present the opportunity to purchase AshfordOaks (the “Property”), a 190,820 square foot, thirteen-story, high-rise office building located at 8122 DatapointDrive in San Antonio, Texas. Positioned along the highly traveled Fredericksburg Road directly adjacent to theSouth Texas Medical Center District, the Property is proximate to some of the City’s most popular shopping/entertainment hubs, substantial restaurant options, and some of the most desirable residential areas in SanAntonio. Currently 88% occupied, Ashford Oaks presents potential investors with an incredible opportunityto acquire a strong, cash flowing, fully renovated, Class A office building with substantial potential upsideand long-term value appreciation in one of the most resilient cities in the Nation.PROPERTY SUMMARY4PROPERTY ADDRESS8122 Datapoint Drive San Antonio, TX 78229SUBMARKETNorthwestYEAR BUILT1984/2017OCCUPANCY88.0%WALT4.0 YearsBUILDING AREA 190,820 SFLAND AREA 2.7030 AcresNUMBER OF FLOORSThirteen (13)ZONINGC-3 (General Commercial)PARKING3.30:1,000 SF with structured garage parking
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INVESTMENT HIGHLIGHTSCORE PLUS OPPORTUNITY WITH STRONG CASH FLOW ANDUPSIDE POTENTIAL6 88% occupancy with a WALT of 4.0 years and no more than 20% of potential rolloveroccurring in one year during the hold period 45% of total NRA consists of deeply imbedded medical tenancy with a ground floorsurgical center 57,000 SF (30% of total NRA) leased to GSA/IRS (32,000 SF for a 10-year term) andCox Radio (25,000 SF since 1993) Four recently completed spec suites (12,000 SF) ready for occupancy Can be purchased at a strong basis at 50% below replacement cost
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VALUE-ENHANCEMENT OPPORTUNITY8 Flexibility to convert to primarily healthcare tenancy over the hold period resulting in a lower exit cap rate In-place rents of 24.00 PSF are nearly 16% below the competitive set average ( 27.75 BY PSF) offering potential investors a substantial mark-to-market opportunity Lease-up of the remaining 23,729 SF of vacancy to increase NOI by approximately 658,480 Opportunity to convert tenants to a NNN rent structure to increase returns and simplify operations Add select low cost amenities (building conference room, fitness area, tenant lounge) to further quicken lease-up and improve tenant retention/satisfaction
UNIVERSITY HOSPITAL SYSTEMMETHODIST HEALTHCARE SYSTEMSOUTH TEXASUNIVERSITY OF TEXASRESEARCH FACILITYHEALTH SCIENCE CENTERSTERLING OAK HILLSUT HEALTH MEDICAL ARTSCLASS A MULTIFAMILY 300 UNITS& RESEARCH CENTERST. LUKE'S BAPTIST HOSPITALMETHODIST HOSPITALSPECIALTY AND TRANSPLANTGALEN COLLEGE OF NURSINGFREDERICKSBURGRDFREDERICKSBURG NORTHSHOPPING CENTERFUTURE MULTIFAMILYDEVELOPMENT SITEHIGHPOINT TOWERSSOUTH TEXASASHFORD OAKSRENAL CARE GROUPDATAPO300,000 SF MID-RISE OFFICEINTDRBAPTIST HEALTH SYSTEMSCHOOL OF HEALTH PROFESSIONSOXFORD AT MEDICAL CENTERMALEDICDRCLASS A MULTIFAMILY 245 UNITS9
RECENTLY RENOVATED CLASS A OFFICE BUILDING 10Ownership has recently spent over 10M in substantial buildingupgrades including: 12 floors of fully renovated restrooms, corridors, ceilings andLED lighting A complete Trane centrifugal HVAC system replacement thatprovides redundancy, flexibility, and increased building efficiency Full Thyssenkrup elevator mechanical, control and motormodernization New EDPM roof and wet sealed exterior with full warranty Fully renovated entry lobby with Class A granite and marblefinishes New fire monitoring and security systems Numerous other improvements that will decrease need for futurecapital Below grade garage with LED lighting and surface parking to servea variety of tenant’s needs Fully granite clad exterior with covered tenant balconies on mostfloors Constructed at one of the highest elevations in San Antonio, offeringtenants and guests with breathtaking views of the Downtown skylineand the Texas Hill Country
PREMIER LOCATION ADJACENT TO THE SOUTH TEXAS MEDICAL CENTERDISTRICT AND PREFERRED RESIDENTIAL AREAS An excellent thriving location adjacent to the South Texas Medical Center and I-10 Trade Area Located just northwest of the Loop 410/IH-10 interchange, one of San Antonio’s busiest crossroads,Ashford Oaks is positioned directly adjacent to the catalytic South Texas Medical Center District Convenient ingress/egress points with direct access and less than a mile from IH-10 provideconvenient drive times to some of the most desirable residential areas for both principals andclients, such as Hill Country Village, Castle Hills, Shavano Park, and Olmos Park Tenants are attracted to the convenient 5-10 minute drive to some of San Antonio’s best shoppingcenters, hotels, medical services, restaurants and entertainment optionsROBUST NORTHWEST OFFICE MARKET Average occupancy rates across the Northwest office submarket are currently 90.7% despiteapproximately 200,000 square feet of office product being delivered to the submarket during thelast two years Since 2012, base rental rates in this submarket have increased nearly 16% from 17.43 PSF to 20.21PSF today which represents a substantial discount to the overall average market rate of 29.04 PSF The Northwest submarket has attracted and retained many tenants looking for more affordablerates than the CBD/PearlRESILIENT SAN ANTONIO AND TEXAS ECONOMY As the 3rd fastest growing City in the nation (from 2010-2019), in large part due to the presence ofnon-cyclical industries, business friendly climate, and low cost of living, San Antonio is consideredto be one of the strongest and most resilient cities in the nation11
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ECONOMIC OVERVIEW13
ECONOMIC OVERVIEWFLOURISHINGSAN ANTONIOECONOMYWhile it has consistently led the nation in economic growthand stability, the Alamo City is undergoing an urban revivalthat has picked up significant pace in recent years. San Antoniois experiencing rapid urbanization as young professionals andbusinesses are taking notice of the abundant opportunities ithas to offer. Among Texas’ big four metro areas, San Antoniostands out for its diversified economy, attractive quality of life,a growing technology ecosystem, and favorable cost of living.Rich History & Urban Renaissance14 Traditionally known for its rich multi-cultural history, theRiverwalk, Alamo & family tourist destinations Celebrated for its emerging culinary and arts scene,entertainment destinations, outdoor activities, and newlyrevitalized areas such as The Pearl and Southtown Explosive urban growth: recently announced 450 millionAlamo Plaza redevelopment and 90 million UTSAdowntown tech & security focused expansion
ACCOLADESNO. 1AMERICA’S NEXT BOOM TOWNForbesTECH HOTSPOTInc.NATION'S 2ND HIGHESTGROWTH OF MILLENNIALSBrookingsTOP 5 FOR“If there’s a city of opportunity in Texas, it’sSan Antonio. There aren’t many times in ageneration when you can actually build a city.It’s becoming one of the country’s really greatcities right now. Something is happening. It’sdefinitely happening.”Graham WestonFounder and Former CEO of RackspaceECONOMIC PERFORMANCEBrookingsTOP 10 MUST-VISITDESTINATIONSForbesTOP 25 MARKET FORREAL ESTATE INVESTMENT 2020ULI's Emerging Trends in Real Estate 15
NOTABLE EMPLOYERSJOINT BASESAN ANTONIO80,165 JOBS50,000 JOBS2,800 JOBS1620,000 JOBS3,300 JOBS18,305 JOBS1,653 JOBS5,000 JOBS500 JOBS
Population Trends San Antonio is among the fastest-growing cities in the U.S. adding 221,092 new residentsbetween 2010-2020 2.5 million MSA residents: second most populous city in Texas, 7th largest in the U.S. One of the Nation’s fastest growing Millennial populations in the U.S.2ND FAST GROWING CITY IN THECOUNTRYIncrease of 20,824 residents between 2017-2018Employment Trends Healthy job market credited to diverse industries: established financial services, rapidlygrowing life sciences, new energy, and a booming IT and cybersecurity presence Educated, young workforce, low business costs, and city-backed financial incentivescontinue to attract startups and corporate relocations Top market for job seekers: steady employment growth and low unemployment levels120 PEOPLE MOVING TO SANANTONIO PER DAYPopulation of 1.6M expected to double by 2040MILLENNIAL POPULATION AMONGFASTEST-GROWING IN THE NATIONPOPULATION GROWTH2010-2020COMPETITIVE COST OF LIVING,13.1% LESS THAN U.S. AVERAGESANANTONIO21%TEXASUSA17%7%INTERNATIONALLY RECOGNIZEDAS A LEADING PROVIDER OFCYBERSECURITYEMPLOYMENT GROWTHFebruary 2020Jobs (T-12)29,400Employment Growth in the U.S.5thSan Antonio Unemployment Rate3.1%Texas3.5%U.S.3.8%LARGEST ACTIVE & RETIREDMILITARY POPULATIONS IN THE U.S.17
37MILLIONANNUAL VISITORS“Clearly, San Antonio offers businessesa very high quality lifestyle, lowcost of living, abundance of highereducation institutions, and availabilityof skilled labor. The decision to retainour headquarters in San Antonio wasinfluenced by these factors, as well asthe future potential for growth andcontinued prosperity.”Jim LaffoonSSFCU President and CEO 15 BillionANNUAL ECONOMIC IMPACT FROMVISITOR SPENDING10.3MILLION ANNUALPASSENGERS 201818
International Trade Center Ideally positioned along the NAFTA corridor, handling50% of Mexico-U.S. trade flow Logistical functionality bolstered by 1,900-acremultimodal Port San Antonio hub Large multinational corporate presence includingBoeing, Lockheed Martin and XeroxIT & Cybersecurity Hub Recognized by the NSA as one of the nation’s leadingcities for cybersecurity activity Global employers including EY, PwC, Booz AllenHamilton, Lockheed Martin and The Hut Group areexpanding cybersecurity operations in San AntonioStrong Military Presence Known as “Military City” due to its long history ofmultiple military and defense installations Home to one of the greatest concentrations of activeand retired military populations in the nation: 283,000 military & military service employees in the MSA Four major military bases comprise Joint Base SanAntonio (JBSA): Randolph Air Force Base, Fort SamHouston, Lackland Air Force Base and Camp Bullis19
DEAL TEAMANALYTICAL SUPPORTJOHN TAYLORManaging Director210.293.6869John.taylor@am.jll.comJOSH l.comKELSEY ROOP SHEBAYManaging Y EW FULLERSenior Director512.532.1931Drew.fuller@amjlll.comCLAY TON ASHFORD OAKSSAN ANTONIOFINANCING SPECIALISTSJEREMY WOMACKSenior Managing Director210.839.2012Jeremy.womack@am.jll.comLAUREN DOWDirector469.232.1950Lauren.dow@am.jll.com9601 McAllister Fwy #100San Antonio, TX 78216www.us.jll.com/capitalmarketsHEALTHCARE SPECIALISTBRIAN BACHARACHManaging us.jll.com/capitalmarketsCopyright Jones Lang LaSalle IP, Inc. 2021Jones Lang LaSalle Americas, Inc. or its state-licensed affiliate (“JLL”) has been engaged by the owner of the property to market it for sale. Information concerning the property [properties] described hereinhas been obtained from sources other than JLL, and neither Owner nor JLL, nor their respective equity holders, officers, directors, employees and agents makes any representations or warranties, express orimplied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions,assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser. JLL andowner disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers should conduct their own independent investigation and rely on those results.The information contained herein is subject to change. The Property may be withdrawn without notice. If the recipient of this information has signed a confidentiality agreement regarding this matter, thisinformation is subject to the terms of that agreement. 2021. Jones Lang LaSalle IP, Inc. All rights reserved.
SAN ANTONIO 5,000 JOBS 2,800 JOBS 3,300 JOBS 1,653 JOBS 500 JOBS TEXAS SAN ANTONIO USA Population Trends San Antonio is among the fastest-growing cities in the U.S. adding 221,092 new residents between 2010-2020 2.5 million MSA residents: second most populous city in Texas, 7th largest in the U.S.
