Stonehollow Portfolio by Ramon Rodriguez

STON EHOLL OW 3 8 4 , 1 7 4

S F

•

C L A S S

•

INDUSTRIAL PORTFOLIO

M U L T I - T E N A N T

D E S I G N

•

A U S T I N ,

T E X A S

EXCLUSIVE MARKETING ADVISORS JACK FRAKER Vice Chairman 214.979.6300 jack.fraker@cbre.com

JOSH MCARTOR Executive Vice President 214.979.6303 josh.mcartor@cbre.com

TODD MILLS Executive Vice President 512.499.4906 todd.mills@cbre.com

JONATHAN BRYAN First Vice President 214.979.6304 jonathan.bryan@cbre.com

HEATHER MCCLAIN-VENEGONI Senior Associate 214.979.6307 heather.mcclain@cbre.com

RYAN THORNTON Capital Markets Manager 214.979.5661 ryan.thornton@cbre.com

DEBT & STRUCTURED FINANCE PROFESSIONAL

LOCAL MARKET EXPERT

SCOTT LEWIS Senior Vice President 214.979.5605 scott.lewis@cbre.com

ANDY THOMAS Industrial Partner 512.835.4455 thomas@hpitx.com

www.cbre.com/igdallas-houston For additional information regarding this opportunity, please visit: www.cbremarketplace.com/stonehollow

ÂŠ2014 CB Richard Ellis, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction. CBRE, CB RICHARD ELLIS and the CBRE CB RICHARD ELLIS logo are service marks of CB Richard Ellis, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.

CONFIDENTIALITY AND CONDITIONS

This is a confidential Memorandum intended solely for your limited use and benefit in determining whether you desire to express further interest in investing in the Stonehollow Industrial Portfolio. This Memorandum contains selected information pertaining to the Portfolio and does not purport to be a representation of the state of affairs of the Owner or the Property, to be all-inclusive, or to contain all or part of the information which prospective investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and CB Richard Ellis. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation. All references to acreages, square footages and other measurements are approximations. Additional information and an opportunity to inspect the Portfolio will be made available to interested and qualified prospective purchasers. Neither the Owner nor CB Richard Ellis, nor any of their respective directors, officers, affiliates or representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of this Memorandum or any of its contents and no legal commitment or obligation shall arise by reason of your receipt of this Memorandum or use of its contents. The Owner expressly reserves the right, at its sole discretion, to reject any or all expressions of interest or offers to purchase the Portfolio, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Memorandum. The Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum or making an offer to purchase the Portfolio unless and until written agreement(s) for the purchase of the Portfolio have been fully executed, delivered and approved by the Owner and any conditions to the Ownerâ&#x20AC;&#x2122;s obligations therein have been satisfied or waived. By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will not disclose this Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or CB Richard Ellis. You also agree that you will not use this Memorandum or any of its contents in any manner detrimental to the interest of the Owner or CB Richard Ellis. In this Memorandum, certain documents, including leases and other materials, are described in summary form. These summaries do not purport to be complete nor necessarily accurate descriptions of the full agreements referenced. Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.

STONEHOLLOW

INDUSTRIAL PORTFOLIO

EXECUTIVE SUMMARY.............................................................................. 1 PROPERTY INFORMATION........................................................................ 7 ECONOMIC OVERVIEW........................................................................... 25 FINANCIAL ANALYSIS.............................................................................. 37 TENANT NARRATIVES.............................................................................. 45

STONEHOLLOW

INDUSTRIAL PORTFOLIO

E X E C U T I V E S U M M A RY

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY CBRE is pleased to present the exceptional opportunity to acquire the Stonehollow Industrial Portfolio, a 384,174 square foot, Class A, light industrial portfolio. The six (6) building portfolio is 96% leased to 19 national, regional and local credit tenants. The Portfolio is strategically located in one of the nation’s premier growth markets – Austin, Texas. Each building in the portfolio has the functional specifications, physical features, aesthetics and an irreplaceable, in-fill location that segment them in the top tier of industrial properties within the Austin industrial market.

THE DOMAIN

IBM CAMPUS

TOP GOLF

RAILROAD

5 2

BLD. 4 PARKING

METRIC BLVD

Property Stonehollow I Stonehollow II Stonehollow III Stonehollow IV Stonehollow V Stonehollow VI Portfolio Totals

Address 11525 A Stonehollow Drive 11525 B Stonehollow Drive 2105 Gracy Farms Lane 11701 Stonehollow Drive 11801 Stonehollow Drive 11800 Stonehollow Drive

Square Footage (SF) 69,035 64,925 92,500 75,600 50,464 31,650 384,174

GRACY FA RMS LN

STONEHOLLOW DR

Clear Height 24’ 26’ 27’ 24’ 24’ 21’ 21’ - 27’

Percentage Leased (%) 100% 77% 100% 100% 100% 100% 96%

Year Built 1997 1997 1997 1997 1997 1997 1997

Land Area (Acres) 5.91 6.26 6.13 5.56 4.03 3.43 31.32

O F F E R I N G M E M O R A N D U M //

STONEHOLLOW

INDUSTRIAL PORTFOLIO

TROPHY QUALITY LOCATION The Portfolio is strategically located in the inner core of the highly desirable and development restricted North Austin Industrial Submarket with excellent accessibility to MoPac Highway 1, SH 183, Braker Lane, US 290, US 360, The Domain, and the Austin Arboretum. Additionally, restrictive zoning

LEANDER

INTERSTATE

N KEY DISTANCES

requirements and improving market dynamics in Austin make it an excellent

Austin CBD

market for light industrial product.

Austin-Bergstrom Intl. Airport 17.8 Miles PARK

PRESTIGIOUS AUSTIN LOCATION

San Antonio

89 Miles

Houston

162 Miles

Dallas

188 Miles

Located on the rim of the 32,000 square-mile Texas Hill Country, Austin is

JOLLYVILLE

the capital of Texas and home to The University of Texas at Austin. Austin

ROUND ROCK

BRUSHY CREEK

10.8 Miles CEDAR

PFLUGERVILLE

is the 11th largest city in the nation, located centrally within 200 miles of three of the 10 largest U.S. cities (Dallas, Houston and San Antonio). The

THE DOMAIN

Austin MSA has an estimated population of 1,883,051 (2013) and is one of the fastest growing metropolitan areas in the country because of its draw

STONEHOLLOW INDUSTRIAL PORTFOLIO

as a destination for migrating talent.

NORTH 183

TEXAS § Consistently ranked as one of the nation’s most favorable business climates (low tax burden & competitive regulatory environment). § Aggregate costs for real estate, energy, wages and taxes below most states in the country. § Centrally located and recognized for having the best roads in the nation for trucking. AUSTIN § Austin’s progressive, entrepreneurial and pro-business atmosphere is driving the economy to one of the top in the nation. § A young and well educated workforce is renewed annually by the University of Texas at Austin, Austin Community College, as well as other universities and highly rated public school systems in the area. § Forbes recently ranked Austin #1 on its list of the best big cities for jobs § Austin secured the 6th spot in the nation for a US Destination City according to U-Haul. § Austin is one of the best US cities to find work according to Adecco Staffing.

290

WEST LAKE HILLS

AUSTIN INTERSTATE

290

SHADY HOLLOW

INTERSTATE

ONION CREEK

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

183

AUSTIN-BERGSTROM INTL. AIRPORT

EXECUTIVE SUMMARY

INVESTMENT HIGHLIGHTS BOOMING AUSTIN MARKET Austin’s abundant, highly educated work force and superior quality of life are indicative

Additionally, nearly every in-place tenant in the portfolio has contractual rental increases

of the city’s exceptional economic growth. Austin’s current unemployment rate of 4.2% is

resulting in an NOI which is projected to grow approximately 71% over an investor’s 10

significantly lower than the statewide rate of 5.3% and the national rate of 6.1%.

year hold period to $5.75 M. This is a result of increased demand combined with limited new supply and contractual rent bumps.

Austin was the first U.S. city to recover from the recession, according to a national report from HIS Global Insight and is projected to grow more than 20% in population by 2020.

STABLE/CREDIT TENANCY

Austin is known world-wide for its knowledge-based economy, built on outstanding

The Stonehollow Industrial Portfolio is currently 96% leased to 19 quality tenants. The top

university based research, entrepreneurial culture, venture capital funding, broad array

five tenants in the Portfolio (ranked by square footage) include:

of support services and a rich pool of intellectual talent and leadership. The MSA’s economy thrives on a balance of industries and business sectors including technology, government, health services and education. AUSTIN INDUSTRIAL MARKET Even though Austin’s industrial market is relatively small in comparison to some of the nation’s largest markets that also reside in Texas, Austin boasts a talented employment base, affordable housing, stable economy, quality of life, and favorable business climate. The total existing inventory is just below 50 million square feet (as of the third quarter 2014) and can be categorized into 14 primary submarkets. AUSTIN MARKET STATISTICS AT A GLANCE 3Q 2014

CDM SERVICE, INC. Q-o-Q

Vacancy

11.30%

Asking Rates, NNN

$0.70 SF

FUNCTIONAL MULTI-TENANT DESIGN

234,182 SF

The Portfolio includes demised suite sizes ranging from 4,050 to 92,500 square feet,

allowing future ownership tremendous flexibility in organically growing in-place tenants

and customizing spaces for market demand. The diversity of suite size is well suited for

Net Absorption Delivered Construction

the northern Austin submarkets and is ideal for achieving rental rate growth. INCREASING MARKET FUNDAMENTALS & IN-PLACE NOI GROWTH The Stonehollow Portfolio is positioned to generate above benchmark returns through

The wide-range of suite sizes also allows an owner to “incubate” tenants within

increased economic rent which is a result of the improving national economy as well as the

the Portfolio’s smaller suites providing a pipeline of tenants for the larger spaces.

strengthening of local Austin market fundamentals. CBRE Econometric Advisors currently

The size ranges provide a more diversified rollover and predictable income which

projects market rent inflation of 7.3% and 9.1% for 2015 and 2016, respectively.

includes upside potential.

O F F E R I N G M E M O R A N D U M //

STONEHOLLOW

INDUSTRIAL PORTFOLIO

IRREPLACEABLE BUSINESS PARK SETTING §

The Portfolio’s buildings are concentrated within a half a mile radius.

Attractive, mature landscaping within the park and the proximity to MoPac Expressway, Highway 183, and I-35 brings high-quality long-term tenants to the assets.

Business Park provides both immediate access to I-35 and insulation from traffic congestion.

NORTH BURNET/GATEWAY PLANNING AREA

The Portfolio is also located within the North Burnet/Gateway Planning Area (“NBG”) in the north part of Austin’s urban core. The North Burnet/Gateway LEGEND

zoning district is unique to the City of Austin, due to the city’s long term vision

North Burnet/Gateway Planning Area

associated with that area. The North Burnet/Gateway master plan was

The Domain

approved in 2007 and presents a long-term vision for the area to redevelop

North Burnet/Gateway Planned Streets

the existing low density, auto-oriented, and industrial uses into a higher density mixed-use neighborhood that is pedestrian friendly and takes advantage of the links to commuter rail transit and the area’s key position within Austin’s urban core. The intent of the project is to allow a significant number of new residents to move into the area to accommodate some of the expected population growth in the region. The NBG redevelopment plan is market driven and will factor in to the next twenty to thirty years of Austin urban expansion.

Stonehollow Industrial Portfolio

An additional benefit of Stonehollow’s location within the North Burnet/ Gateway Planning Area is the increased height and FAR standards (with and without a residential component). All future redevelopment in the area is required to meet the NBG Plan requirements which encourage greater density and mixed use. On the Portfolio’s 31.32 acres, it is possible to build up to 60 feet with a 2:1 FAR. THE DOMAIN Stonehollow is strategically located in Austin’s direct path of growth, providing long term value and rental rate growth opportunities for future ownership. The ideal location provides access to exceptional amenities, restaurants, Top Golf and The Domain. The Domain has been extremely successful and features 100 upscale and mainstream retail stores and restaurants, almost half of which are exclusive within the market. The dotted lines in the map to the left show a future street which will directly connect Stonehollow to the Domain.

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

EXECUTIVE SUMMARY

OFFERING TERMS The Stonehollow Industrial Portfolio is being offered without an asking price. Buyers should base their offers on an “as is and where is” condition of the properties. Square Footage:

384,174 SF

Percentage Leased (as of March of 2015):

96%

Projected Year 1 NOI @ 96% Occupancy: $3.356 Million TRANSACTION TIMETABLE AND PROCEDURE CBRE is exclusively marketing the Stonehollow Industrial Portfolio to a select group of qualified investors. The prospective investor will be selected by the Seller in consultation with CBRE. Interested investors should submit to CBRE a detailed Letter of Intent, which at a minimum, should include: (a) total proceeds; (b) a description of the approval process; (c) due diligence and closing timing; and (d) earnest money deposit amounts. The Seller and CBRE will select certain investors, based on information submitted, to participate in the interview process.

EXCLUSIVE MARKETING ADVISORS JACK FRAKER Vice Chairman 214.979.6300 jack.fraker@cbre.com

JOSH MCARTOR Executive Vice President 214.979.6303 josh.mcartor@cbre.com

TODD MILLS Executive Vice President 512.499.4906 todd.mills@cbre.com

JONATHAN BRYAN First Vice President 214.979.6304 jonathan.bryan@cbre.com

HEATHER MCCLAIN-VENEGONI Senior Associate 214.979.6307 heather.mcclain@cbre.com

RYAN THORNTON Capital Markets Manager 214.979.5661 ryan.thornton@cbre.com

www.cbre.com/igdallas-houston

The Argus cash flow models for the Stonehollow Industrial Portfolio assume a fiscal year beginning March of 2015. A detailed rent roll, expiration schedule, cash flow assumptions/ projections and other financial information are contained in the Financial Information section of the Offering Memorandum which is available upon execution of a signed Confidentiality Agreement (please contact Colleen McMahon 214.979.6315

DEBT & STRUCTURED FINANCE PROFESSIONAL

LOCAL MARKET EXPERT

SCOTT LEWIS Senior Vice President 214.979.5605 scott.lewis@cbre.com

ANDY THOMAS Industrial Partner 512.835.4455 thomas@hpitx.com

For additional information regarding this opportunity, please visit: www.cbremarketplace.com/stonehollow

or Colleen.Mcmahon@cbre.com for additional details). ©2014 CB Richard Ellis, Inc. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction. CBRE, CB RICHARD ELLIS and the CBRE CB RICHARD ELLIS logo are service marks of CB Richard Ellis, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.

O F F E R I N G M E M O R A N D U M //

STONEHOLLOW

INDUSTRIAL PORTFOLIO

PROPERTY INFORMATION

STONEHOLLOW I 11525 A STONEHOLLOW DRIVE

STONEHOLLOW II 11525 B STONEHOLLOW DRIVE

STONEHOLLOW III 2105 GRACY FARMS LANE

STONEHOLLOW IV 11701 STONEHOLLOW DRIVE

STONEHOLLOW V 11801 STONEHOLLOW DRIVE

STONEHOLLOW VI 11800 STONEHOLLOW DRIVE

O F F E R I N G M E M O R A N D U M //

STONEHOLLOW

INDUSTRIAL PORTFOLIO

MAPS

LEANDER

INTERSTATE

BRUSHY CREEK

CEDAR PARK

ROUND ROCK

d Park Be

n sL

arm

PFLUGERVILLE

THE DOMAIN

STONEHOLLOW

Metr

yF ac Gr

JOLLYVILLE

Stonehollow 6

INDUSTRIAL PORTFOLIO

cy F

Stonehollow 2

290

WEST LAKE HILLS

Gra

Stonehollow 4

FM 1

183

Stonehollow 3

Stonehollow 5

325

NORTH

Stonehollow 1

AUSTIN Bra

INTERSTATE

290

Me tric

Blv

290

183

Ru SHADY HOLLOW

INTERSTATE

ONION CREEK

ic Blv d

nd Dr

// P R O P E R T Y I N F O R M A T I O N

AUSTIN-BERGSTROM INTL. AIRPORT

tlan

Kra

r Ln

arm

s Ln

PROPERTY INFORMATION

MARKET AERIAL

35 275

W PARMER LN

THE DOMAIN

GRAC Y

FARM S

LL O

D IC BLV

METR

O F F E R I N G M E M O R A N D U M //

STONEHOLLOW

INDUSTRIAL PORTFOLIO

SITE PLAN

NOT PART OF PORTFOLIO

STONEHOLLOW 6 11800 STONEHOLLOW DRIVE 31,650 SF

STONEHOLLOW 5 11801 STONEHOLLOW DRIVE 50,464 SF

BUILDING 4 RECIPROCAL PARKING EASEMENT

10 / / P R O P E R T Y

INFOR MATION

GRACY

STONEHOLLOW 3 2105 GRACY FARMS LANE 92,500 SF

115

25 STON B S EHO TO LL 64, NEHO OW 2 925 LLO SF W D RIV

FARMS L

E 25 STONE A S HO TON LL 69, EHO OW 1 035 LLO SF W DR IV 115

STONEHOLLOW DRIVE

ANE

STONEHOLLOW 4 11701 STONEHOLLOW DRIVE 75,600 SF

PROPERTY INFORMATION

THE DOMAIN

IBM CAMPUS

TOP GOLF

RAILROAD

5 2

BLD. 4 PARKING

METRIC BLVD

GRACY FA RMS LN

STONEHOLLOW DR

O F F E R I N G M E M O R A N D U M / / 11

STONEHOLLOW

INDUSTRIAL PORTFOLIO

STONEHOLLOW I 11525 A STONEHOLLOW DRIVE 11525 A STONEHOLLOW DRIVE 69,035 SF

STONEHOLLOW DRIVE

5’

6 10

STONEHOLLOW 2

0’

3 2

150’

12 / / P R O P E R T Y

INFOR MATION

Tenant 1

Build A Sign, LLC

Square Feet

Lease Expirations

22,608

Jul-2014

Austin Community College

4,200

Aug-2016

Systems & Materials (SMRC)

7,466

Oct-2018

Active Power, Inc.

4,050

Mar-2016

Active Power, Inc.

8,100

Mar-2016

Green Revolution Cooling

7,981

Jun-2016

Protection One Alarm

4,050

Jul-2016

Tablet Solutions/Contactworks

10,580

Aug-2015

PROPERTY INFORMATION

PROPERTY SPECIFICATIONS LOCATION STONEHOLLOW I Address: City, State, Zip: Industrial Market: SQUARE FOOTAGE Warehouse Area (SF): A/C Office Area (SF): Total Area (SF): Land Area (Acres):

11525 Stonehollow Dr. Austin, TX, 78758 Austin

STONEHOLLOW 4

18,235 50,800 (74%) 69,035 5.91

BUILDING FEATURES Construction Age (Year): 1997 Clear Height: 24' Column Spacing: 33' x 40' Building Depth: 50' to 150' Truck Court Depth: 100' Auto Parking: 282 Dock Doors: 16 - 10' x 10' dock high overhead doors, 8 knock out panels for future doors CONSTRUCTION OVERVIEW Building Construction Type: Roof System: Roof Age: Fire Protection System:

N STO

W LLO

STONEHOLLOW 1

150'

Concrete tilt-wall panel .60 mil TPO 2010 2010 (full replacement) Fully Spinklered

O F F E R I N G M E M O R A N D U M / / 13

STONEHOLLOW

INDUSTRIAL PORTFOLIO

STONEHOLLOW II 11525 B STONEHOLLOW DRIVE

11525 B STONEHOLLOW DRIVE 64,925 SF

150

’

STONEHOLLOW 4

100

’

STONEHOLLOW 3

Tenant

14 / / P R O P E R T Y

INFOR MATION

Square Feet

Lease Expirations

Lets Gel, Inc.

9,845

Mar-2020

To Be Leased

15,000

Jan-2021

Kuehne + Nagle, Inc.

Penninsula Components, Inc

Pure Networx, Inc.

Merrill Technologies, Inc.

10,000 BUILDING 4 5,000

RECIPROCAL 10,000 PARKING 15,080 EASEMENT

Jun-2015 Jan-2017 Jul-2017 Dec-2017

PROPERTY INFORMATION

PROPERTY SPECIFICATIONS LOCATION STONEHOLLOW II Address: City, State, Zip: Industrial Market: SQUARE FOOTAGE Warehouse Area (SF): A/C Office Area (SF): Total Area (SF): Land Area (Acres): BUILDING FEATURES Construction Age (Year): Clear Height: Column Spacing: Building Depth: Truck Court Depth: Auto Parking: Dock Doors: CONSTRUCTION OVERVIEW Building Construction Type: Roof System: Roof Age: Fire Protection System:

11525 B Stonehollow Drive Austin, TX, 78758 Austin

29,125 35,800 (55%) 64,925 6.26

1997 26' 33' x 40' 150' 100' 147 24 - 10x10 dock high overhead doors, 3 drive in ramps

STONEHOLLOW 4

STONEHOLLOW 1

STONEHOLLOW 2

Concrete tilt-wall panel .60 mil TPO 2010 2010 (full replacement) Fully Spinklered

O F F E R I N G M E M O R A N D U M / / 15

STONEHOLLOW

INDUSTRIAL PORTFOLIO

STONEHOLLOW III

125’

2105 GRACY FARMS LANE

GRACY

FARMS L

ANE

2105 GRACY FARMS LANE 92,500 SF

250’

STONEHOLLOW 2 1

320’

BUILDING 4 RECIPROCAL PARKING EASEMENT Tenant 1

16 / / P R O P E R T Y

INFOR MATION

Barco(dba High End Systems)

Square Feet

Lease Expirations

92,500

Jan-2019

PROPERTY INFORMATION

PROPERTY SPECIFICATIONS - STONEHOLLOW III

1997 27' 30' x 40' 250' x 320' 125' 180 6 - 10x10 dock high overhead doors, 1 drive in ramp, 1 "stepvan"

CONSTRUCTION OVERVIEW Building Construction Type: Roof System: Roof Age: Fire Protection System:

Concrete tilt-wall panel .60 mil TPO 2015 2010 (full replacement) Fully Spinklered

STONEHOLLOW 3

320'

E N LA

BUILDING FEATURES Construction Age (Year): Clear Height: Column Spacing: Building Depth: Truck Court Depth: Auto Parking: Dock Doors:

STONEHOLLOW 5

72,500 20,000 (22%) 92,500 6.13

RM FA

SQUARE FOOTAGE Warehouse Area (SF): A/C Office Area (SF): Total Area (SF): Land Area (Acres):

W DR

HOLLO

STONE

CY RA

2105 Gracy Farms Lane Austin, TX, 78758 Austin

LOCATION STONEHOLLOW III Address: City, State, Zip: Industrial Market:

6.987 ACRE STONEHOLLOW 4 PARKING

O F F E R I N G M E M O R A N D U M / / 17

STONEHOLLOW

INDUSTRIAL PORTFOLIO

STONEHOLLOW IV 11701 STONEHOLLOW DRIVE

STONEHOLLOW DRIVE

11701 STONEHOLLOW DRIVE 75,600 SF

105’

670’

120’

STONEHOLLOW 1

STONEHOLLOW 2 Tenant 1

18 / / P R O P E R T Y

INFOR MATION

American Cancer Society. Inc.

Square Feet

Lease Expirations

75,600

Sep-2018

PROPERTY INFORMATION

PROPERTY SPECIFICATIONS LOCATION STONEHOLLOW IV Address: City, State, Zip: Industrial Market:

11701 Stonehollow Dr Austin, TX, 78758 Austin

SQUARE FOOTAGE Warehouse Area (SF): A/C Office Area (SF): Total Area (SF): Land Area (Acres):

0 75,600 (100%) 75,600 5.56

BUILDING FEATURES Construction Age (Year): 1997 Clear Height: 24' Column Spacing: 30' x 35' Building Depth: 105' x 670' Truck Court Depth: 120' Auto Parking: 381 - Tenant uses reciprocal park adjacent to Stonehollow 3 Dock Doors: 9 - 10x10 dock high overhead doors, 14 knock out panels for future doors CONSTRUCTION OVERVIEW Building Construction Type: Roof System: Roof Age: Fire Protection System:

STONEHOLLOW 3 STONEHOLLOW 2

STONEHOLLOW 1

670

STONEHOLLOW 4

STO

NEH

OLL

DR.

Concrete tilt-wall panel .60 mil TPO 2010/2013 2010 (full replacement) Fully Spinklered

O F F E R I N G M E M O R A N D U M / / 19

STONEHOLLOW

INDUSTRIAL PORTFOLIO

STONEHOLLOW V 11801 STONEHOLLOW DRIVE

STONEHOLLOW 6

STONEHOLLOW DRIVE

11801 STONEHOLLOW DRIVE 50,464 SF 380’

GRA

150’

CY F ARM S LA

145’

STONEHOLLOW 4

Tenant

STONEHOLLOW 2 STONEHOLLOW 3

20 / / P R O P E R T Y

INFOR MATION

Square Feet

Lease Expirations

CLE of Austin, LLC

8,734

May-2015

GameFly, Inc.

6,585

Oct-2016

CDM Service, Inc.

17,421

Sep-2017

Kensington Electronics, Inc.

17,451

Jun-2016

PROPERTY INFORMATION

PROPERTY SPECIFICATIONS LOCATION STONEHOLLOW V Address: City, State, Zip: Industrial Market: SQUARE FOOTAGE Warehouse Area (SF): A/C Office Area (SF): Total Area (SF): Land Area (Acres):

11801 Stonehollow Dr Austin, TX, 78758 Austin

28,854 21,600 (43%) 50,464 4.03

BUILDING FEATURES Construction Age (Year): 1997 Clear Height: 24' Column Spacing: 30' x 40' Building Depth: 145' x 380' Truck Court Depth: 150' Auto Parking: 199 Dock Doors: 8 - 10x10 dock high overhead doors, 6 knock out panels for future doors CONSTRUCTION OVERVIEW Building Construction Type: Roof System: Roof Age: Fire Protection System:

Concrete tilt-wall panel .60 mil TPO 2015 2015 (full replacement) Fully Spinklered

STONEHOLLOW 4

STO

' 145

LLO

380

' STONEHOLLOW 5

STONEHOLLOW 3

GRACY

LANE FARMS

O F F E R I N G M E M O R A N D U M / / 21

STONEHOLLOW

INDUSTRIAL PORTFOLIO

STONEHOLLOW VI 11800 STONEHOLLOW DRIVE

11800 STONEHOLLOW DRIVE 31,650 SF

NOT PART OF PORTFOLIO

300’

AN E

110’

ACY

FAR M

STONEHOLLOW DRIVE

STONEHOLLOW 5

22 / / P R O P E R T Y

INFOR MATION

Tenant 1

Harmony Public School

Square Feet

Lease Expirations

31,650

Aug-2020

PROPERTY INFORMATION

PROPERTY SPECIFICATIONS 11800 Stonehollow Dr Austin, TX, 78758 Austin

SQUARE FOOTAGE Warehouse Area (SF): A/C Office Area (SF): Total Area (SF): Land Area (Acres):

0 31,560 (100%) 31,560 3.43

BUILDING FEATURES Construction Age (Year): Clear Height: Column Spacing: Building Depth: Truck Court Depth: Auto Parking: Dock Doors: CONSTRUCTION OVERVIEW Building Construction Type: Roof System: Roof Age: Fire Protection System:

300' STONEHOLLOW 6

14 5'

LOCATION STONEHOLLOW VI Address: City, State, Zip: Industrial Market:

1997 21' 30' x 40' 110' x 300' N/A 145 5 knock out panels for future doors

STONEHOLL

OW DR.

A GR

S RM

LAN

Concrete tilt-wall panel .60 mil TPO 2011 2011 (full replacement) Fully Spinklered

O F F E R I N G M E M O R A N D U M / / 23

STONEHOLLOW

INDUSTRIAL PORTFOLIO

EC ONOMIC OV E RV IE W

ECONOMIC OVERVIEW

Austin is a charmed jewel in the heart of Texas, full of rivers, wooded bike trails, golf courses, beautiful homes, renowned schools, eclectic nightlife, and world-class shopping and dining — all with a cost-of-living advantage that has made people accustomed to places like San Francisco or New York take notice.

INTRODUCTION Ranked #1 by Forbes on its list of “America’s Fastest Growing Cities 2014,” the state

national rate over the past year, led by big gains in core professional and IT services.

capital of Texas is one of the most desirable places to live, work, play and invest. Adding

The unemployment rate is down to a low 4.2%, and labor force gains are strong.

roughly 130 new residents each day since 2000, Austin is also one of the fastest-growing

Although house prices have risen more slowly in recent months, they continue to rise

metropolitan areas. Through September 2014, Austin posted the nation’s third-highest

at a near double-digit pace.

job growth rate (3.6%), which trailed only two other metro areas—Houston (4.3%) and Orlando (3.7%). Its unemployment rate of 4.2% remains well below both the state and

INFORMATION TECHNOLOGY

national rates of 5.2% and 5.5% (seasonally adjusted) and is expected to continue to

Strong growth in IT and related professional services will propel Austin’s economy

improve throughout the remainder of 2014 and into 2015.

forward well into 2015. Over the past year, employment in professional and IT services is up 7.8% and 3.6%, respectively, far exceeding the national average. The late 2014

The University of Texas, along with seven other area universities, graduates more than

completion of Apple’s new Americas Operation Center will pave the way for the addition

15,000 students each year, making Austin one of the most educated U.S. cities. Highly

of another 3,600 new employees over the next five years.

regarded for its truly exceptional quality of life, Austin offers extraordinary natural beauty and a thriving live music scene. All of these features attract young professionals and

IT manufacturing is also rebounding. Flextronics has already hired 900 workers to

create a buoyant economy with tremendous growth potential.

make Apple’s new Mac Pro computer locally, and semiconductor-maker Spansion is considering a $200-million upgrade to its facility that would enable it to convert some of

ECONOMIC OVERVIEW

its flash memory capacity to make microcontrollers. The expansion is not limited to larger

According to a recent report by Moody’s Economy.com, Austin’s economy is in

companies, as smaller firms including Ambiq Micro, Illuminix, Dropbox, Websense, Roku

a period of sustained expansion. Payroll employment has increased at twice the

and Marvell Semiconductor are also making new investments.

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GOVERNMENT The impact of local and state government on the economy should be positive over the coming year, but there is more uncertainty at the state level. Local government payrolls are well above their prerecession peak and are up almost 3% over the past year, far more than the less than 1% rise nationally. Population gains that are three times the national average are generating demand for services such as K-12 schooling, and the property tax base is expanding rapidly due to the influx of residents and rise in home values. Revenue sharing from the state has also increased as a result of increased sales tax collections. Even with a more muted outlook at the state level, the new Texas budget for 2014 through 2015 provides a 4.4% increase in funding for higher education statewide, a win for Austin’s University of Texas campus. RESIDENTIAL HOUSING MARKET Single-family construction is projected to soon overtake multifamily as the main driver of growth in residential construction. While multifamily permitting remains high, it has declined from its record 2013 peak, and new single-family permits are at their highest since 2008. The market signals are clear. Since early 2012, house prices have risen at a double-digit pace, and unit sales are up by one-third while inventories remain low. OUTLOOK Moody’s Economy.com projects that the Austin metro area will strengthen over the coming year, as IT-related services and manufacturing drive larger gains. Strong in-migration of young professionals will lift residential construction. Longer term, the metro area’s well-educated labor force, high concentration of technology businesses, and superior population growth will yield performance that exceeds that of the state and nation.

STRENGTHS & UPSIDE §

Strong population growth supports demographically driven consumer demand.

Well-educated labor force attracts high-value-added tech businesses.

Employment and population increase accelerate the housing market recovery

% of Total Employment Sector

Austin

Texas

U.S.

Government

19.6%

16.2%

16.0%

Professional & Business Services

15.5%

13.0%

13.6%

Education & Health Services

11.7%

13.3%

15.5%

Leisure & Hospitality Services

11.7%

10.2%

10.4%

Retail Trade

10.7%

10.9%

11.1%

Manufacturing

6.0%

7.8%

8.8%

Financial Activities

5.6%

6.1%

5.8%

Wholesale Trade

5.2%

5.0%

4.2%

Construction

4.8%

5.5%

4.3%

Other Services

4.4%

3.5%

4.0%

more than expected.

Information

2.7%

1.8%

2.0%

Growth in social networking accelerates expansion of newer IT industries.

Transportation/Utilities

1.7%

4.1%

3.7%

Mining

0.4%

2.6%

0.6%

Source: Moody’s Economy.com

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Source: Moody’s Economy.com, July 2014

ECONOMIC OVERVIEW

AUSTINâ&#x20AC;&#x2122;S LARGEST EMPLOYERS Employing 6,000+

Employing 1,000-1,999

Austin School Independent District

Intel Corp.

City of Austin

J.P. Morgan Chase & Co.

Dell

Keller Williams Realty

Federal Government

Lower Colorado River Authority

IBM Corp.

Oracle

Round Rock Independent School District

Pharmaceutical Product Development

Seton Healthcare Family

Progressive Insurance Co.

St. David's Healthcare Partnership

Sears Customer Care

State of Texas

State Farm Insurance Co.

University of Texas at Austin

Time Warner Cable Co. Wells Fargo Bank Texas

Employing 2,000-5,999 Advanced Micro Devices Apple

Employing 500-999

Applied Materials

American Cancer Society National Cancer Information Center

AT&T

Austin American-Statesman

Austin Community College

BAE Systems

Flextronics

Bank of America

Freescale Semiconductor

Cisco Systems

Gentiva

eBay/PayPal

National Instruments

Farmers Insurance Group

Samsung Austin Semiconductor

Grande Communications

Texas State University-San Marcos

H-E-B

Travis County

Home Depot Technology Center

U.S. Internal Revenue Service

Rackspace Managed Hosting

Whole Foods Market

Silicon Laboratories Southwestern University

Employing 1,000-1,999

Spansion

St. Edward's University

Accenture

Starwood Hotels & Resorts

Austin Energy

Stock Building Supply of Texas

Austin Regional Clinic

Teacher Retirement System of Texas

Baylor Scott & White Healthcare

Texas Mutual Insurance Co.

Charles Schwab

U.S. Dept. of Veterans Affairs

General Motors

VMWare

Hewlett-Packard

Xerox

Source: Austin Chamber of Commerce, 2014

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AUSTINâ&#x20AC;&#x2122;S 2014 RELOCATIONS & EXPANSIONS (50+ EMPLOYEES) Company

Type of Operation

Acxiom

Enterprise data, analytics & software-as-a-service technology development

Jobs Created

Expansion / Relocation

150

Relocation

Amazing Academy AT&T

Online courses, software & services for entrepreneurs (HQ)

Expansion

Telecommunications center for innovation

Expansion

athenahealth Atlassian

Healthcare management software/cloud-based services

607

Relocation

Software for managing software development

300

Relocation

Axium Nanofibers

Lithium-ion battery development

100

Relocation

Box

Online file sharing software sales & customer support

224

Relocation

BP3 Global

Business process management software (HQ)

Expansion

Charles Schwab

Investment trading technology development & services (Regional HQ)

823

Relocation / Expansion

DaVinci Decor

Wood furniture & picture frame mfg.

100

Relocation

Dropbox

Online file sharing software sales & customer support

170

Relocation

Encryptics

Data encryption security software (HQ)

Relocation

Epicor Software Corp.

Enterprise resource planning software developer (HQ)

Relocation / Expansion [1]

First Trust Portfolios

Investment products & advisory services

100

Relocation

Headspring Systems

Customized software development (HQ)

Expansion

HID Global

Secure identity products & technology mfg. (HQ)

Relocation / Expansion [2]

iEnergizer

Customer service support for game & tech companies

380

Relocation / Expansion

Interactions Corp.

Interactive voice response service customer care center

1,000

Expansion

Main Street Hub

Social media management (HQ)

200

Expansion

Marco Fine Arts

Fine art printing & decor mfg. (HQ)

1,300

Relocation

Ottobock Healthcare

Prosthetic & orthotic maker (regional HQ)

110

Relocation

Parsely Energy

Oil & natural gas exploration (HQ)

100

Relocation

Progressive Insurance

Insurance (Customer Service Center)

187

Expansion

ProjectManager.com

Project management software sales & marketing

100

Relocation

Roku

Firmware dev. for video stream players

SafeGuard World International

Managed payroll services (HQ)

Signpost

Relocation

400

Relocation

Marketing software development & sales

Expansion

SoftServe

Outsourced software development (HQ)

100

Relocation

Voltabox of Texas

Lithium energy storage systems mfg. for public transit & industrial applications (HQ)

Relocation

Volusion

e-commerce technology (HQ)

100

Expansion

Websense

IT security solutions (HQ)

470

Relocation

WP Engine

Web hosting for word press sites (HQ)

100

Expansion

Source: Austin Chamber of Commerce, 2014 [1] Relocation of Epicor's corporate headquarters to Austin; company previously had a development office in Austin. [2] HID initially announced 276 jobs in October 2012. With the commencement of operations in January 2014, the company designated Austin their corporate headquarters, bringing 50 additional jobs.

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ECONOMIC OVERVIEW

NATIONAL RECOGNITION • #2 Markets to Watch for Overall Real Estate Prospects

•

(Urban Land Institute and PwC, November 2014) •

#2 Best Cities for Future Job Growth

(Rent.com, May 2014) •

(Forbes, July 2014) •

#4 Most Creative Cities in 2014

#5 in the Top 10 Metros with Highest Gains in Share of U.S. Jobs

•

#6 Best Places for STEM Graduates

•

Among the Top 10 Best Cities to Launch a Startup

•

Among the Top Affordable Purchase Markets for Aspiring Millennium

•

#1 Fastest Growing Large U.S. Metro Economy through 2020

•

#2 Best Cities for Women in the Workforce

•

#3 City Stealing Jobs from Wall Street (NewGeography.com, June 2014)

•

#1 Best-Performing City for Where America’s Jobs are Created and Sustained (Milken Institute, December 2013)

•

(NerdWallet, June 2014) •

#1 Best City for Job Seekers (NerdWallet, January 2014)

(U.S. Conference of Mayors, June 2014) •

#1 (for the Fourth Year in a Row) on America’s Fastest-Growing Cities (Forbes, February 2014)

Homebuyers (RISMedia, July 2014) •

#1 for 2012-2013 Population Growth among the 1000 Largest U.S. Metros (U.S. Census Bureau, March 2014)

(NerdWallet, July 2014) •

#3 Best City for New College Grads (Livability.com, April 2014)

(NerdWallet, July 2014) •

#3 Top Large Cities for Jobs list (Forbes, April 2014)

(CareerBuilder.com, July 2014) •

#1 in the Nation for Economic Performance from the Recession through the Recovery (Brookings' Metro Monitor, April 2014)

(Forbes, July 2014) •

#2 in the Top 5 Fastest-Growing Cities for Renters in the U.S.

#2 on the Livability Index list of the Best U.S. Cities for People 35 and Under (Vocativ.com, November 2013)

•

Among the Top 10 for Up and Coming City for Entrepreneurs (Forbes, October 2013)

Among the Top 5 Most Small Business-Friendly Cities in the Nation (Thumbtack, June 2014)

Source: City of Austin

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TRANSPORTATION AND INFRASTRUCTURE Austin’s central Texas location places it within 200 miles of three of the 10 largest U.S. cities — Dallas, Houston and San Antonio. The metro area has immediate accessibility to Interstate Highway 35, which vertically bisects the City of Austin, and several regional highways including Texas State Highway Loop 1 (MoPac Expressway) to the west and U.S. 290 West/Texas Highway 71 to the south. In addition, U.S. 183 runs from the northwest side of the city down to the southeast side of the city, traversing alongside the western boundary of Austin Bergstrom International Airport. Located six miles southeast of downtown Austin, Austin-Bergstrom International Airport is the nation’s 36th busiest airport, with 14 airlines providing nonstop service to 42 destinations including Mexico City and London. Over the 15 years that Austin-Bergstrom International has been part of the community, it has contributed $2.4 billion to the local economy and currently supports 7% of all jobs in Austin. Serving as the primary gateway to Central Texas with 278 daily flights, the airport’s passenger traffic has steadily increased in recent years. Passenger traffic during 2013 totaled 10.0 million, up 6% over 2012. Through the first nine months of 2014, Austin-Bergstrom’s total passenger traffic of 7.9 million was up 6.5% year over year. Many Austin residents also enjoy access to the Capital Metropolitan Transportation Authority (Capital Metro), the city’s regional public transportation provider. The system operates a bus (MetroBus), commuter rail (MetroRail) and a paratransit service that serves Austin and several suburbs in Travis and Williamson counties. MetroBus is the mainstay of Capital Metro’s fleet, offering 82 distinct bus routes with approximately 3,000 bus stops. Its impressive MetroRail system continues to grow with four times as many trips taken now as when service began in 2010. In January 2014, Capital Metro launched MetroRapid, an express service that operates in shared lanes with automobile traffic. For the fiscal year 2014, Capital Metro has boarded nearly 34.2 million riders, quadrupling the number of trips taken since service began, with a single ride costing between $1.00 and $2.75.

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ECONOMIC OVERVIEW

wrapped in Texas pink granite, the building spans 360,000 square feet, more than any other state capitol building, and sits on 2.3 acres of land. Recent renovations and restorations include exterior and interior improvements totaling $98 million and $8 million in improvements to the grounds. Beyond the Capitol building, notable museums in Austin include the Texas Memorial Museum, the Blanton Museum of Art, the Bob Bullock Texas State History Museum, the Austin Museum of Art, the Elisabet Ney Museum and the galleries at the Harry Ransom Center. Recreational activities flourish in the area with more than 14,000 acres of green space, 30 miles of hiking and biking trails, 172 city parks, 27 golf courses, two lakes within the city limits, more than 100 swimming holes, and nine wilderness areas. An Austin CULTURAL AND ENTERTAINMENT AMENITIES

favorite, Zilker Park is situated on 350 acres in the heart of south Austin along the banks

Widely recognized for its laid-back lifestyle and natural beauty, Austin is legendary for

of Town Lake. Due to its size, the park hosts numerous events each year, including the

being the “Live Music Capital of the World.” Musicians and producers from around

popular Austin City Limits Music Festival that attracts 75,000 annually.

the world showcase their talent in clubs, restaurants, and music venues along historic Sixth Street in the heart of the downtown entertainment district. The nine-block area

All of these features contribute to Austin’s exceptional and much sought-after quality of

between Lavaca Street and I-35 is comprised of two and three-story historical houses

life, attracting a broad base of young and well-educated professionals.

and commercial buildings dating back to the 1800s. This vibrant entertainment district is home to an eclectic mix of bars, live entertainment venues, art galleries, casual cafes, upscale restaurants, and the elegant Driskill Hotel. Home to The University of Texas at Austin (UT), the city is also an influential center for politics, technology, business and more as it attracts a talented pool of students from every state in the U.S. and from more than 100 countries worldwide. Situated just north of downtown, the university has grown from a single building in 1883 to a 350-acre main campus with 17 colleges and schools, 24,000 faculty and staff, and more than 50,000 students. In the 2014 U.S. News & World Report survey of undergraduate programs, UT ranked 16th among public schools. The magazine also ranked UT’s business, education, engineering and law graduate school programs among the top 20 in the nation. Located four blocks south of UT, the Texas State Capitol holds a distinct spot in the Austin skyline. The structure, completed in 1888, is surrounded by 22-acres of grounds and monuments and stands 14 feet taller than the U.S. Capitol in Washington DC. Distinctly

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AUSTIN INDUSTRIAL MARKET The recovery is gaining substantial momentum as Austin continues to diversify its economy and strengthen its employment base. If the large corporations reflect Austin’s economic diversity, then it’s the smaller employers that should reflect the local economy’s vitality. Ever since Michael Dell started selling computers from a 3,000 square foot warehouse flex space in Braker Center, thousands of talented and creative people have started small businesses in Austin. Dell, one of America’s 40 biggest companies, started life at the university in 1984, and smart industrial policy brought Sematech, a consortium involving the government as well as 14 big chip firms, to Austin in 1988. Scores of other tech firms have followed. As a result, the state capital’s industrial market is fueled by intellectual property driving largely low-bulk, high value goods such as highly specialized electronics and business services. In fact, Facebook, no less, took 60,000 square feet in an office building on 6th street for its largest office outside Silicon Valley. Recognizing the importance of entrepreneurs, the city has organized the Austin Technology Incubator, the technology commercialization programs at the University of Texas’ IC2 Institute and the Capital Network, ensuring that promising new ideas receive

11525 B STONEHOLLOW DRIVE

immediate attention from the local “Angel” investors. This example of proactive local business investment will continue to keep Austin leading the nation in recovery and setting the stage for real business expansion.

Even though Austin’s industrial market is relatively small in comparison to some of the nation’s largest markets that also reside in Texas—Dallas and Houston—Austin boasts a talented employment base, affordable housing, stable economy, quality of life, and favorable business climate. The total existing inventory sat just below 50 million square feet (as of the third quarter 2014) and can be categorized into 14 primary submarkets. Situated on I-35 and located in the heart of Texas, Austin is ideally located for distribution within the state of Texas. Austin’s industrial market has performed very well, with the third quarter of 2014 producing 234,182 square feet of positive net absorption bringing YTD 2014 net absorption to 304,964. Tenants are showing confidence in the market and are moving 11800 STONEHOLLOW DRIVE

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forward with expansions. It is CBRE’s opinion that a prolonged period during which net positive absorption will out-pace deliveries has been in effect for the past few years in

ECONOMIC OVERVIEW

Austin—noted by the 1.7 million square feet absorbed in 2011, a record total of 2.1 million square feet absorbed during 2012, and 708k square feet absorbed in 2013.

DIRECT VACANCY 21.6% 20.5%

Due to such a high volume of leasing activity, the city wide vacancy rate has dropped

17.2%

13.3%

to a pre-recessionary level of 11.2%. Favoring our prognosis are the realities of Austin’s significant geographic and regulatory barriers to new development in Austin proper,

9.7%

11.2%

2013

YTD 2014

$6.24

2013

YTD 2014

increasing material costs, higher return on cost requirements, expanding government, and the continuous expansion of the population base. Austin’s average lease rates have recently increased substantially, going from $5.88 / per square foot/yr at year end 2012, to $6.24 /per square foot/yr at the end of 3Q 2014. This increase can be attributed to the continual tightening of the market and continued positive net absorption.

2009

2010

2011

2012

WAREHOUSE LEASE RATES ($/SF/YR)

$5.76

$5.88

$5.76 $5.52

The projected period of continued positive net absorption with no new supply is expected to bring a continued increase in rental rate appreciation. The pent up demand from the local economy coupled with Austin’s historical elasticity and rapid economic recovery indicate healthy growth for Austin’s industrial property sector.

2009

2010

2011

TOTAL NET ABSORPTION 1,704,069

2012

2,138,003 708,413

2009 (1,267,718)

2010 (68,012)

2011

2012

2013

304,964 YTD 2014

UNDER CONSTRUCTION 469,423

410,937

133,495 39,875 11801 STONEHOLLOW DRIVE

2009

2010

120,000 -

2011

2012

2013

YTD 2014

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NORTH INDUSTRIAL MARKET The North Austin industrial submarketâ&#x20AC;&#x2122;s inventory is comprised of 252 buildings totaling 13.8 million square feet, making it the largest industrial submarket in the Austin area. 164 of these buildings are classified as warehouses, while the remaining 88 are light industrial product. They comprise 9.1 and 4.4 million square feet, respectively.

DIRECT VACANCY 18.5%

17.9% 12.6%

The submarket is surrounded by four of Austinâ&#x20AC;&#x2122;s major highways with US Highway 183

8.8%

providing the southern boundary, Mopac Expressway (Loop 1) to the west, the new SH-

8.8% 6.3%

45 Tollway to the north, and IH-35 to the east. The North Austin industrial submarket is the largest industrial submarket in Austin due in large part to the growth of major employers in the area including IBM, Motorola, Dell, Applied Materials, and Intel/Samsung. In addition, the North submarket features

2009

2010

2011

2012

2013

YTD 2014

a large collection of retail amenities with the La Frontera and Domain mixed-used developments in close proximity.

WAREHOUSE LEASE RATES ($/SF/YR)

Through 3Q 2014, the overall North Austin industrial vacancy rate stood at 8.8%, 160bps below the overall Austin market average. The North Austin industrial submarket

$5.40

$5.52

$5.28

$5.76

$6.24

2009

2010

2011

2012

2013

boasts one of the highest rental rates in the Austin market at $6.84, 10% higher than the

$6.84

Austin market as a whole. YTD net absorption is skewed due to Ceva Freight vacating over 200,000 square feet of space within the North Austin industrial submarket. When this tenant is removed, the North Austin industrial submarket has one of the highest positive net absorption in the Austin industrial market.

YTD 2014

TOTAL NET ABSORPTION

570,723

465,298 265,362

121,878

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2009 (106,059)

2010

2011

2012

2013

YTD 2014

ECONOMIC OVERVIEW

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F I NA N C I A L A NA LY S I S

FINANCIAL ANALYSIS

FINANCIAL ANALYSIS ASSUMPTIONS GLOBAL Analysis Period Commencement Date Mar 1, 2015 End Date Feb 28, 2025 Term 10 Years Area Measures Building Square Feet (NRSF) 384,174 SF Growth Rates Consumer Price Index (CPI) 3.00% Other Income Growth Rate 3.00% Operating Expenses 3.00% Real Estate Taxes 3.00% Market Rent Growth CY 2016 5.00% CY 2017 7.00% CY 2018 7.00% CY 2019 5.00% CY 2020 5.00% CY 2021 3.00% CY 2022+ 3.00% 3.00% [1] General Vacancy Loss $0.10 PSF Capital Reserves (CY 2015 Value)

VACANT SPACE LEASING Occupancy and Absorption Projected Vacant at 3/1/15 15,000 SF Percentage Vacant at 3/1/15 3.90% Absorption Period 11 Month(s) Absorption Period Start Date Mar 1, 2015 First Absorption Occurs On Feb 1, 2016 Last Absorption Occurs On Feb 1, 2016 Financial Terms 2015 Annual Market Rent $10.15 PSF Rent Adjustment 3.00% Annually Lease Term 5 Years Expense Reimbursement Type NNN Rent Abatements 2 Month(s) Tenant Improvements ($/NRSF) $5.00 PSF Commissions (Base Rent Only) 6.00% MISCELLANEOUS REVENUE AND EXPENSES [2] 2015 Budget Operating Expense Source 3.00% Management Fee (% of EGR) No Real Estate Taxes Reassessed

SECOND GENERATION LEASING 75% Retention Ratio Financial Terms 2015 Annual Market Rent $7.50 - $13.50 PSF Rent Adjustment 3.00% Annually Lease Term 5 Years Expense Reimbursement Type NNN Tenanting Costs Rent Abatements New 2 Month(s) Renewal 2 Month(s) Duration 2 Fiscal Years Tenant Improvements ($/NRSF) New Renewal Commissions (Base Rent Only) New Renewal Weighted Average Downtime [3] New Weighted Average

$1.00 - $7.00 PSF $0.50 - $3.00 PSF 6.00% 4.00% 4.50% 6 Month(s) 2 Month(s)

Notes: All market rent rates are stated on calendar-year basis. [1] General Vacancy Loss factor includes losses attributable to projected lease-up, rollover downtime, and fixturing downtime. The following tenants are excluded from this loss factor for current lease terms only: Protection One Alarm Monitor. [2] Miscellaneous Revenue: a) Analysis assumes seller will credit all base rent abatement for in-place tenants estimated at $9,845. Operating Expenses: a) Real Estate Taxes for CY2015 are modeled per the 2015 Budget. [3] For the purposes of stabilizing the residual net operating income, downtime has been removed from the residual year.

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CASH FLOW 2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

Physical Occupancy

96.10%

93.82%

91.22%

93.49%

93.34%

96.10%

Overall Economic Occupancy [1]

94.63%

95.31%

98.10%

93.60%

96.43%

95.31%

95.98%

96.92%

94.35%

94.97%

96.99%

Weighted Average Market Rent

$10.32

$10.87

$11.63

$12.41

$13.03

$13.63

$14.04

$14.46

$14.90

$15.35

$15.81

Weighted Average In Place Rent [2]

$9.29

$9.73

$10.52

$10.83

$12.83

$12.97

$13.97

$14.77

$14.30

$15.14

$16.10

Total Operating Expenses PSF Per Year

$3.49

$3.60

$3.72

$3.82

$3.97

$4.09

$4.23

$4.37

$4.48

$4.63

$4.79

Fiscal Year Ending - February 29

[3] FY 2016 $/SF/YR

REVENUES Scheduled Base Rent Gross Potential Rent

$9.58

$3,680,028

$3,807,083

$3,954,481

$4,191,282

$4,618,685

$4,859,804

$5,156,790

$5,359,795

$5,566,738

$5,824,340

$5,997,208

Absorption & Turnover Vacancy

(0.49)

(189,423)

(103,067)

(69,907)

(288,587)

(121,834)

(200,088)

(146,148)

(62,128)

(288,166)

(235,970)

(54,609)

Base Rent Abatements

(0.16)

(62,548)

(113,034)

8.92

3,428,057

3,590,982

3,884,574

3,902,695

4,496,851

4,659,716

5,010,642

5,297,667

5,278,572

5,588,370

5,942,599

Total Scheduled Base Rent

3.33

1,277,996

1,350,079

1,401,508

1,387,253

1,478,885

1,516,220

1,583,845

1,654,814

1,650,473

1,691,366

1,823,406

TOTAL GROSS REVENUE

Expense Reimbursements

12.25

4,706,053

4,941,061

5,286,082

5,289,948

5,975,736

6,175,936

6,594,487

6,952,481

6,929,045

7,279,736

7,766,005

General Vacancy Loss

(0.03)

(10,795)

(20,365)

(31,730)

(68,171)

(95,933)

(98,885)

(124,755)

(154,008)

(119,677)

(141,957)

(180,684)

12.22

4,695,258

4,920,696

5,254,352

5,221,777

5,879,803

6,077,051

6,469,732

6,798,473

6,809,368

7,137,779

7,585,321

Common Area Maintenance

(0.55)

(210,257)

(216,564)

(223,061)

(229,754)

(236,646)

(243,745)

(251,058)

(258,590)

(266,347)

(274,338)

(282,568)

Utilities

(0.26)

(100,271)

(103,278)

(106,377)

(109,568)

(112,855)

(116,240)

(119,727)

(123,320)

(127,020)

(130,830)

(134,754)

Management Fee

(0.37)

(140,859)

(147,621)

(157,630)

(156,653)

(176,394)

(182,310)

(194,091)

(203,955)

(204,281)

(214,133)

(227,559)

Insurance

(0.15)

(56,200)

(57,885)

(59,623)

(61,410)

(63,254)

(65,151)

(67,105)

(69,118)

(71,192)

(73,326)

(75,528)

Real Estate Taxes

(2.17)

(832,111)

(857,075)

(882,786)

(909,270)

(936,547)

(964,645)

(993,583)

(1,023,391)

(1,054,093)

(1,085,716)

(1,118,289)

(3.49)

(1,339,698)

(1,382,423)

(1,429,477)

(1,466,655)

(1,525,696)

(1,572,091)

(1,625,564)

(1,678,374)

(1,722,933)

(1,778,343)

(1,838,698)

8.73

3,355,560

3,538,273

3,824,875

3,755,122

4,354,107

4,504,960

4,844,168

5,120,099

5,086,435

5,359,436

5,746,623

Tenant Improvements

(0.34)

(130,463)

(147,725)

(85,026)

(316,347)

(135,043)

(230,620)

(206,551)

(121,020)

(349,784)

(183,341)

(232,568)

Leasing Commissions

(0.31)

(117,672)

(138,448)

(70,636)

(339,040)

(286,224)

(262,911)

(204,858)

(119,668)

(393,563)

(362,867)

(268,185)

Capital Reserves

(0.10)

(38,610)

(39,768)

(40,961)

(42,189)

(43,455)

(44,758)

(46,101)

(47,484)

(48,910)

(50,376)

(51,888)

TOTAL CAPITAL COSTS

(0.75)

(286,745)

(325,941)

(196,623)

(697,576)

(464,722)

(538,289)

(457,510)

(288,172)

(792,257)

(596,584)

(552,641)

OPERATING CASH FLOW

$7.99

$3,068,815

$3,212,332

$3,628,252

$3,057,546

$3,889,385

$3,966,671

$4,386,658

$4,831,927

$4,294,178

$4,762,852

$5,193,982

EFFECTIVE GROSS REVENUE OPERATING EXPENSES

TOTAL OPERATING EXPENSES NET OPERATING INCOME CAPITAL COSTS

[1] This figure takes into account vacancy/credit loss, absorption vacancy, turnover vacancy, and base rent abatements. [2] This figure does not include any amount related to expense reimbursements. Only Scheduled Base Rent and Fixed/CPI Increases are included in this calculation, which is based on the weighted-average physical occupancy during each fiscal year. [3] Based on 384,174 square feet.

38 / / F I N A N C I A L

A NA LY SI S

FINANCIAL ANALYSIS

RENT ROLL Market Suite

Tenant Name

1-100

Build A Sign, LLC

Square

% of

Lease Term

Rental Rates

Feet

Property

Begin

End

Begin

Monthly

PSF

22,608

32.75%

Mar-2012

Jul-2019

Current

$21,478

$0.95

Mar-2016

$21,930

$0.97

Recovery Annually

Rent Abatements

Tenant

Leasing

Assumption / Market Rent

PSF

Type

Month #

% Abated

Improvements

Commissions

$257,731

$11.40

NNN

$263,157

$11.64

Stonehollow I

1-110

Austin Community College

4,200

6.08%

Sep-2008

Aug-2016

Mar-2017

$22,382

$0.99

$268,583

$11.88

Mar-2018

$22,834

$1.01

$274,009

$12.12

Current

$3,864

$0.92

$46,368

$11.04

Sep-2015

$3,948

$0.94

$47,376

$11.28

Market $9.25 NNN [TI: $5.00 / $2.00]

NNN

Market $11.75 NNN [TI: $5.00 / $2.00]

Comments/Options MGT may not exceed 5% of gross revenue. 1-120

1-130

Systems & Materials

Current

$5,226

$0.70

$62,714

$8.40

Nov-2015

$5,376

$0.72

$64,506

$8.64

Comments/Options

Nov-2016

$5,525

$0.74

$66,298

$8.88

Two 3 year renewal options @ FMV.

Nov-2017

$5,749

$0.77

$68,986

$9.24

Current

$4,425

$1.09

$53,096

$13.11

Active Power, Inc.

7,466

4,050

10.81%

5.87%

Aug-2013

Aug-2001

Oct-2018

Mar-2016

NNN

Rent as of 04/15. Active Power, Inc.

8,100

11.73%

May-1996

Mar-2016

Current

$8,849

$1.09

$106,191

$13.11

NNN

Rent as of 04/15. Green Revolution Cooling

7,981

11.56%

May-2013

Jun-2016

Current

$5,427

$0.68

$65,125

$8.16

NNN

Rent as of 05/15.

1-170

Market $9.25 NNN [TI: $5.00 / $2.00]

Comments/Options 1-155

Market $13.50 NNN [TI: $7.00 / $2.50]

Comments/Options 1-150

Market $13.50 NNN [TI: $7.00 / $2.50]

Comments/Options 1-135

Market $9.25 NNN [TI: $5.00 / $2.00]

Protection One Alarm Monitor

4,050

Complete Tablet Solutions, Ltd

10,580

5.87%

15.33%

Aug-2002

Jun-2009

Jul-2016

Aug-2015

Current

$3,848

$0.95

$46,170

$11.40

Aug-2015

$3,929

$0.97

$47,142

$11.64

Current

$7,857

$0.74

$94,281

$8.91

NNN

Market $11.75 NNN [TI: $5.00 / $2.00]

NNN

Market $9.15 NNN [TI: $5.00 / $1.50]

Stonehollow I OCCUPIED SqFt VACANT SqFt TOTAL SqFt

69,035

100.0%

0.0%

69,035

100.0%

O F F E R I N G M E M O R A N D U M / / 39

STONEHOLLOW

INDUSTRIAL PORTFOLIO

RENT ROLL Market Square

% of

Lease Term

Rental Rates

Suite

Tenant Name

Feet

Property

Begin

End

Begin

Monthly

PSF

2-200

Let's Gel, Inc.

9,845

15.16%

Jan-2015

Mar-2020

Current

$9,845

$1.00

Jan-2016

$10,140

$1.03

Recovery Annually

Rent Abatements

Tenant

Leasing

Assumption / Market Rent

PSF

Type

Month #

% Abated

Improvements

Commissions

$118,140

$12.00

NNN

$121,684

$12.36

Stonehollow II

2-220

2-235

2-240

2-250

2-255

Comments/Options

Jan-2017

$10,436

$1.06

$125,228

$12.72

Analysis assumes seller will credit all in-place rent abatements in month 1 of $9,845. MGT may not exceed 5% of gross revenue.

Jan-2018

$10,731

$1.09

$128,773

$13.08

To Be Leased

15,000

Kuehne + Nagle, Inc.

10,000

Peninsula Components, Inc.

5,000

Pure Networx, Inc.

Merrill Technologies, Inc.

23.10%

15.40%

Feb-2016

Jun-1996

Jan-2021

Jun-2015

Jan-2019

$11,026

$1.12

$132,317

$13.44

Jan-2020

$11,322

$1.15

$135,861

$13.80

Feb-2016

$13,322

$0.89

$159,863

$10.66

Feb-2017

$13,725

$0.92

$164,700

$10.98

Feb-2018

$14,138

$0.94

$169,650

$11.31

Feb-2019

$14,563

$0.97

$174,750

$11.65

Feb-2020

$15,000

$1.00

$180,000

$12.00

Current

$7,000

$0.70

$84,000

$8.40

Market $12.25 NNN [TI: $6.50 / $3.00]

NNN

1-2

100%

$5.15

$3.29

Market

$77,250

$49,325

$10.15 NNN [TI: $5.00 / $2.50]

6.00%

NNN

Market $8.00 NNN [TI: $1.00 / $0.50]

7.70%

Feb-2014

Jan-2017

Current

$3,750

$0.75

$45,000

$9.00

NNN

Market $9.50 NNN [TI: $5.00 / $2.50]

10,000

15,080

15.40%

23.23%

Mar-2007

Dec-2014

Jul-2017

Dec-2017

Comments/Options One 3 year renewal option @ annual rates of $8.52, $8.76, and $9.00. Stonehollow II OCCUPIED SqFt

49,925

VACANT SqFt

15,000

23.1%

TOTAL SqFt

64,925

100.0%

40 / / F I N A N C I A L

76.9%

A NA LY SI S

Current

$6,300

$0.63

$75,600

$7.56

Jun-2015

$6,600

$0.66

$79,200

$7.92

Jun-2016

$6,900

$0.69

$82,800

$8.28

Current

$9,802

$0.65

$117,624

$7.80

Dec-2015

$10,104

$0.67

$121,243

$8.04

Dec-2016

$10,405

$0.69

$124,862

$8.28

NNN

Market $8.50 NNN [TI: $5.00 / $2.00]

NNN

Market $8.30 NNN [TI: $1.00 / $0.50]

FINANCIAL ANALYSIS

Market Suite

Tenant Name

3-100

Barco (dba High End Systems)

Square

% of

Lease Term

Rental Rates

Feet

Property

Begin

End

Begin

Monthly

92,500

100.00%

Jan-2004

Jan-2019

Current

$49,950

$0.54

Feb-2016

$51,800

$0.56

PSF

Recovery Annually

Rent Abatements

Tenant

Leasing

Assumption / Market Rent

PSF

Type

Month #

% Abated

Improvements

Commissions

$599,400

$6.48

NNN

$621,600

$6.72

Stonehollow III

Comments/Options

Feb-2017

$53,650

$0.58

$643,800

$6.96

Feb-2018

$55,500

$0.60

$666,000

$7.20

Current

$76,356

$1.01

$916,272

$12.12

Oct-2015

$78,624

$1.04

$943,488

$12.48

Oct-2016

$80,892

$1.07

$970,704

$12.84

Oct-2017

$83,160

$1.10

$997,920

$13.20

Market $8.00 NNN [TI: $1.00 / $0.50]

4% cap on OPEX excluding UTIL, MGT, INS, and RET. MGT may not exceed 5% of gross rental income. Stonehollow III OCCUPIED SqFt VACANT SqFt

92,500

100.0%

0.0%

TOTAL SqFt

92,500

100.0%

4-100

75,600

100.00%

Stonehollow IV American Cancer Society

Oct-2006

Sep-2018

Comments/Options

NNN

Market $13.00 NNN [TI: $5.75/$2.65]

5% cap on OPEX excluding UTIL, INS, and RET. MGT may not exceed 4% of gross rent. Stonehollow IV OCCUPIED SqFt VACANT SqFt TOTAL SqFt

75,600

100.0%

0.0%

75,600

100.0%

O F F E R I N G M E M O R A N D U M / / 41

STONEHOLLOW

INDUSTRIAL PORTFOLIO

RENT ROLL Market Suite

Tenant Name

5-100

CLE of Austin, LLC

Square

% of

Lease Term

Rental Rates

Feet

Property

Begin

End

Begin

Monthly

8,734

17.31%

May-2008

May-2015

Current

$9,637

PSF

Recovery Annually

Rent Abatements

Tenant

Leasing

Assumption / Market Rent

PSF

Type

Month #

% Abated

Improvements

Commissions

$13.24

NNN

Stonehollow V $1.10

$115,638

Market $13.00 NNN [TI: $4.00 / $2.00]

5-110

GameFly, Inc.

6,858

13.59%

Nov-2013

Oct-2016

Current

$6,995

$1.02

$83,942

$12.24

Nov-2015

$7,132

$1.04

$85,588

$12.48

Current

$9,930

$0.57

$119,160

$6.84

Apr-2016

$10,104

$0.58

$121,250

$6.96

NNN

Comments/Options One 3 year renewal option @ annual rates of $12.72, $12.96, and $13.20. 5-125

5-150

CDM Service, Inc.

17,421

Kensington Electronics, Inc.

17,451

34.52%

34.58%

Jan-2005

Jun-2004

Sep-2017

Jun-2016

Current

$11,081

$0.64

$132,977

$7.62

Jun-2015

$11,430

$0.66

$137,165

$7.86

Current

$29,672

$0.94

$356,063

$11.25

Sep-2015

$30,991

$0.98

$371,888

$11.75

Market $13.00 NNN [TI: $4.00 / $2.00]

NNN

Market $7.50 NNN [TI: $4.00 / $1.50]

NNN

Market $8.00 NNN [TI: $4.00 / $1.50]

Comments/Options 5% cap on OPEX excluding UTIL, INS, and RET. Stonehollow V OCCUPIED SqFt

50,464

VACANT SqFt

100.0%

0.0%

TOTAL SqFt

50,464

100.0%

6-100

31,650

100.00%

Stonehollow VI Harmony Public Schools

Sep-2006

Aug-2020

Sep-2017

$32,309

$1.02

$387,713

$12.25

Sep-2019

$33,628

$1.06

$403,538

$12.75

Stonehollow VI OCCUPIED SqFt

31,650

VACANT SqFt TOTAL SqFt

100.0%

0.0%

31,650

100.0%

TOTALS / AVERAGES

384,174

OCCUPIED SqFt

369,174 15,000

96.1% 3.9%

384,174

100.0%

VACANT SqFt TOTAL SqFt

42 / / F I N A N C I A L

$291,291

A NA LY SI S

$0.79 $3,495,491

$9.47

NNN

Market $13.00 NNN [TI: $6.00 / $2.50]

FINANCIAL ANALYSIS

O F F E R I N G M E M O R A N D U M / / 43

STONEHOLLOW

INDUSTRIAL PORTFOLIO

STONEHOLLOW

INDUSTRIAL PORTFOLIO

T E NA N T NA R R AT I V E S

TENANT NARRATIVES

Tenant Name: Website: Public/Private: Net Rentable Area: % of Stonehollow III: % of Portfolio:

High End Systems, Inc. www.highend.com Private – a member of the Barco group 92,500 100% 24%

High End System’s Parent Company: Website: Public/Private: Annual Revenue (2009): Total Employees:

Barco www.barco.com Public (Euronext Brussels:BAR) $846.1 million 3,600

High End Systems Inc. is one of the world’s largest entertainment lighting manufacturers,

Barco, a global technology company, designs and develops visualization solutions for

a pioneer in new digital lighting technology and producer of the industry-preferred

a variety of selected professional markets: medical imaging, media & entertainment,

lighting controller technology. Since their founding in the 1970s, High End Systems has

infrastructure & utilities, traffic & transportation, defense & security, education & training

become a leader and innovative force in the entertainment lighting industry.

and corporate AV.

Based in Austin, Texas, High End Systems Inc. began as a grassroots venture between

In these markets Barco offers user-friendly imaging products that optimize productivity

a musician, a DJ and a photographer. In June 2008, High End Systems was acquired

and business efficiency. Barco’s innovative hard and software solutions integrate all

by Belgium-based Barco Inc. for $55 million. The merger of these two dominant industry

aspects of the imaging chain, from image acquisition and processing to image display

players reinforced Barco’s leadership position in the fast converging video and lighting

and management. Barco has its own facilities for Sales & Marketing, Customer Support,

segments. At the same time, High End Systems remains close to its roots, developing

R&D and Manufacturing in Europe, America and Asia-Pacific.

new technology in tandem with experts in the field. They remain dedicated to serving the industry as well as shaping its future.

Barco was established in 1934 in Poperinge, Belgium by Lucien De Puydt. The company specialized in the assembly of radios with parts from the United States. Hence the

High End Systems has become the industry’s leading manufacturer through its pursuit of

name, “Belgian American Radio Corporation” or Barco. Today, the company is active

high performance and quality. Some of their products Include:

in more than 90 countries with about 3,300 employees worldwide. In 2009 Barco posted sales of 638 million euro.

Digital Lighting

Automated Luminaries

§ Effects §

Lighting Consoles

LED Products

A tenant at Stonehollow III since January 2004, High End Systems leases a total of 92,500 square feet, through January 2019. High End Systems utilizes their space for light manufacturing and distribution.

O F F E R I N G M E M O R A N D U M / / 45

STONEHOLLOW

INDUSTRIAL PORTFOLIO

Tenant Name: Website: Public/Private: Net Rentable Area: % of Stonehollow IV: % of Portfolio:

American Cancer Society www.cancer.org Private 75,600 100% 20%

The American Cancer Society (ACS) is a nationwide community-based voluntary health organization dedicated to eliminating cancer as a major health problem by preventing cancer, saving lives, and diminishing suffering from cancer through research, education, advocacy, and service. RESEARCH The aim of the Society’s research program is to determine the causes of cancer and to support efforts to prevent and cure the disease. The American Cancer Society is the largest source of private, nonprofit cancer research funds in the United States, second only to the federal government in total dollars spent. Beginning in 1946 with $1 million, the Society’s research program has invested about $3 billion in cancer research. The Society has funded 44 Nobel Prize winners, most of them early in their careers. EDUCATION The Society offers programs to help educate the public about cancer risks, early detection methods, and prevention. Educational efforts include: §

Tobacco control

Relationship between diet and physical activity and cancer

Sun safety

Comprehensive school health education

46 / / T E N A N T

NARR ATIVES

TENANT NARRATIVES

ADVOCACY The Society’s advocacy efforts work in concert with its research, education, and service initiatives to strengthen our nation’s laws, regulations, and programs in a way that will: §

Increase federal funding for cancer research

Help more people benefit from advances in prevention, early detection, and treatment

Make it easier for patients to navigate the health care system

Improve the quality of life of cancer patients, survivors, and their families

In addition, the Society has established a sister issue advocacy organization, the American Cancer Society Cancer Action Network(SM) (ACS CAN) (www.acscan.org). ACS CAN is dedicated to eliminating cancer as a major public health problem through voter education and issue campaigns aimed at influencing candidates and lawmakers to support laws and policies that will help people fight cancer. PATIENT SERVICES Because cancer takes a toll on the person diagnosed—as well as family and friends— the Society offers support and service programs to try to lessen the impact. These programs cover a wide range of needs—from connecting patients with other survivors to providing a place to stay when treatment facilities are far from home. Headquartered in Atlanta, Georgia, the ACS has a National Home Office, 13 chartered Divisions throughout the United States, more than 3,400 local offices, and a presence in most communities. With more than two million volunteers nationwide, the American Cancer Society is one of the oldest and largest voluntary health agencies in the United States. A tenant at Stonehollow IV since October 2006, American Cancer Society leases a total of 75,600 square feet, through September 2018. American Cancer Society utilizes their space for back office occupancy for their regional office.

O F F E R I N G M E M O R A N D U M / / 47

STONEHOLLOW

INDUSTRIAL PORTFOLIO

Through the BuildASign.com® Giving Program, the company has contributed more than Tenant Name: Website: Public/Private: Net Rentable Area: % of Stonehollow I: % of Portfolio:

Build A Sign, LLC www.buildasign.com Private 22,608 33% 6%

$800,000 to over 1,700 local and national nonprofits. It has also received national recognition for its donation of more than 325,000 Welcome Home banners and signs (valued at over $9.5 million) to the friends and families of military service members returning home from a deployment. §

Founded: 2005

2013 Revenue: $57MM

Employees: 280+

BuildASign.com is a leading online custom printing provider of signage and home decor

Ownership: privately owned

items. Products include: signs, canvas, apparel, business cards, car wraps and more.

Headquarters: Austin, TX

Proprietary web- based technology lets customers place their online custom signage and

Operating locations: U.S., Canada, U.K., Germany

home decor orders quickly and easily, while an innovative production system ensures

BuildASign Operated Sites: 40+

that each high quality piece prints and ships with industry-leading speed. Founded in 2005, the Austin-based company – which also operates EasyCanvasPrints.com and

A tenant at Stonehollow I since March 2012, Build A Sign leases a total of 22,608 square

AlliedShirts.com– which have been bootstrapped to great success.

feet, through July 2019. Build A Sign utilizes their space as their company headquarters.

48 / / T E N A N T

NARR ATIVES

TENANT NARRATIVES

Tenant Name: Website: Public/Private: Net Rentable Area: % of Stonehollow VI: % of Portfolio:

Kensington Electroncics, Inc. www.keiconn.com Private 17,451 35% 5%

KEI’s customers range from Design Engineers calling to discuss their 0.5mm surface mount connector requirements for their unusually tight PCB stacking problem to buyers calling to set up blanket orders not only to be assured of available stock over the course of time but also to take advantage of large volume discounts. Prototype/ Design houses call Kensington to order samples and catalogs for an upcoming project; small companies call since their orders are not large enough to meet the factory order minimum; Product Line Managers in desperate need call Kensington because the only available stock in the United States within the next 8 weeks is located at Kensington; Expediters faced

Kensington Electronics, Inc. (KEI) is among the fastest growing distributors of electronic

with constant MRP changes call Kensington, sometimes daily, to make adjustments to

components in the nation. Founded 21 years ago in Orange County, California,

their schedules; quality managers who must maintain strict ISO requirements call ISO

Kensington has evolved into a connector and electromechanical component specialist

registered Kensington for their requirements since they know Kensington understands

serving over 6,500 customers in markets such as Mil/Aero, Industrial, Solar, Medical,

the true meaning of their ISO standards; receiving clerks are grateful their company

Telecom, and Automotive. With experienced professionals, a multi-million dollar inventory,

calls Kensington since all boxes arrive on time with bar coded labels, internal part

and a modern facility in Austin, Texas, Kensington Electronics is able to provide quality

numbers and Purchase Order numbers on every box; purchasing agents call Kensington

service with quality component products.

to reach an efficient, friendly salesperson with fair, consistent pricing; and world leading manufacturers call Kensington to enhance market penetration.

Through Kensington’s Mid-America location in Austin, Texas, they are able to provide a broad range of services and available inventory including but not limited to:

A tenant at Stonehollow VI since June 2004, Kensington Electronics leases a total of 17,451 square feet, through June 2016. Kensington Electronics utilizes their space for

Component Sourcing and Cross-referencing

New Product Design and Qualification

Custom Problem Solving

Bar-coding Capability

Custom Cable Assembly

Value Added Services

JIT Inventory Management

light manufacturing and distribution as well as their company headquarters.

§ Kitting §

Special Packaging

O F F E R I N G M E M O R A N D U M / / 49

STONEHOLLOW

INDUSTRIAL PORTFOLIO

CDM SERVICE, INC. Tenant Name: Website: Public/Private: Net Rentable Area: % of Stonehollow VI: % of Portfolio:

CDM Service, Inc. www.cdmservice.net Private 17,421 35% 5%

CDM's goal is to be the customer's partner of choice in the electronics industry, and the company strives to set the benchmark for the industry in the following key areas: ยง

Customer Driven

ยง

Values Driven

ยง

Technology Leadership

ยง

Low Cost Producer

ยง

Strong Financial Performance

CDM is a leader in the delivery of innovative electronics failure analysis (FA) and manufacturing services. CDM operates a highly sophisticated FA and manufacturing

A tenant at Stonehollow IV since January 2005 CDM Service leases a total of 17,421

network, providing a broad range of services to leading OEMs (original equipment

square feet, through September 2017. CDM Service utilizes their space as a information

manufacturers). A recognized leader in quality, technology and supply chain management,

technology repair service center.

CDM provides competitive advantage to its customers by improving to-market, scalability and manufacturing efficiency.

50 / / T E N A N T

NARR ATIVES

O F F E R I N G M E M O R A N D U M / / 51

STONEHOLLOW

I N DUST R I A L PORT FOL IO

EXCLUSIVE MARKETING ADVISORS JACK FRAKER Vice Chairman 214.979.6300 jack.fraker@cbre.com

JOSH MCARTOR Executive Vice President 214.979.6303 josh.mcartor@cbre.com

TODD MILLS Executive Vice President 512.499.4906 todd.mills@cbre.com

JONATHAN BRYAN First Vice President 214.979.6304 jonathan.bryan@cbre.com

HEATHER MCCLAIN-VENEGONI Senior Associate 214.979.6307 heather.mcclain@cbre.com

RYAN THORNTON Capital Markets Manager 214.979.5661 ryan.thornton@cbre.com

DEBT & STRUCTURED FINANCE PROFESSIONAL

LOCAL MARKET EXPERT

SCOTT LEWIS Senior Vice President 214.979.5605 scott.lewis@cbre.com

ANDY THOMAS Industrial Partner 512.835.4455 thomas@hpitx.com

www.cbre.com/igdallas-houston For additional information regarding this opportunity, please visit: www.cbremarketplace.com/stonehollow