Holliday Fenoglio Fowler, L.P. ("HFF"), a Wisconsin licensed real estate broker.

Transcription

1 Holliday Fenoglio Fowler, L.P. ("HFF"), a Wisconsin licensed real estate broker.

2 H olliday Fenoglio Fowler, L.P. ( HFF ) has been retained on an exclusive basis to arrange the sale of the 100% fee simple interest in CityCenter (the Property ). Situated along Milwaukee s vibrant RiverWalk, CityCenter is comprised of the timeless Daniel Burnham designed 16-story office tower at 735 North Water Street, a modern amenity-rich 7-story annex building at 731 North Water Street as well as a 300-stall parking garage at 740 North Water Street. In total the Property consists of 428,023 RSF and is 83.7% leased with 5.6 years of remaining weighted average lease expiry ( W.A.L.E. ). With over $25.4 million invested into the Property since 2007, CityCenter is equipped with state-of-the-art building systems. The Property also benefits from an unparalleled suite of on-site amenities ripe for cosmetic enhancements, providing value-add investors with an exceptionally rare opportunity to complete the creative office transformation of CityCenter with only strategic aesthetic improvements. u lwa Mi East Mason Street kee e u en Av North Water Street r e Riv on int ank ANNEX GARAGE 2 East Wisconsin Avenue

3 EXECUTIVE SUMMARY Key Property Statistics CITYCENTER CITYCENTER ANNEX CITYCENTER GARAGE Address 735 North Water Street 731 North Water Street 740 North Water Street Architect Daniel Burnham Edwin Kraus Martin Tullgren Date Completed/Renovated 1914/ / Stories 16 TOTAL 7 8 Rentable Area 348,344 RSF 428,023 RSF 76,357 RSF 3,322 RSF Percent Leased 80.0% 83.7% 100.0% 100.0% W.A.L.E. 4.5 years 5.6 years 10.3 years 0.8 years Acres Acres Stalls * Typical Floor Plates Approx. 17,000-24,000 RSF Approx. 5,000-11,000 RSF Typical Ceiling Heights Approx. 10'-11' Floor to Deck Approx. 12'-15' Floor to Deck *Current valet operations routinely accommodate up to 350 vehicles State-Of-The-Art Infrastructure Encased in Timeless Daniel Burnham Design Completed in 1914, and designed by world-renowned architect Daniel Burnham, CityCenter is equipped with technologically advanced building systems that include state-of-the-art destination dispatch elevator systems, HVAC automation equipment, a distributed antenna system, high-speed Wi-Fi as well as Onvation smart building restroom technology. In total CityCenter benefits from over $25.4 million of capital invested since The Property has been institutionally maintained and in recognition of these efforts has been awarded WiredScore Platinum certification, LEED Silver certification, BOMA 360 certification and is Energy Star rated. Further, CityCenter is a BOMA International TOBY (The Outstanding Building of the Year) Award winner. Capital Improvements PROJECT COST HVAC $3,260,000 Façade, Roof & Exterior $2,800,000 Elevators $2,030,000 Lobby $1,500,000 Fire & Life Safety $820,000 Electrical $520,000 Restrooms $450,000 Common Corridors $350,000 Technology Upgrades $255,000 Tenant Improvements $13,500,000 Total $25,485,000 3

4 An Unparalleled Suite of On-Site Amenities Ripe for Creative Office Enhancements With substantial investment into building systems and infrastructure already completed, investors are provided the opportunity to reposition CityCenter as a leading creative office asset in the market through targeted transformational cosmetic enhancements to existing common areas and amenities. The Property's existing suite of unrivaled on-site amenities include a five-story full service health club equipped with an indoor pool, basketball court, cycle equipment, cardio equipment, free weights and smoothie bar, a dog walk, bike storage, four private boat slips, private mezzanine level conferencing space, ample parking and existing outdoor amenity space. AMPLE PARKING BIKE STORAGE DOG WALK BOAT DOCK 4

5 EXECUTIVE SUMMARY EXISTING 5-Story Full Service Health Club EXISTING Private Mezzanine Level Conference Facilities EXISTING Vacant RiverWalk Level Space with Foodservice Potential ENHANCEMENT POTENTIAL Rise by We WeWork 85 Broad St. New York City ENHANCEMENT POTENTIAL Tower House Lounge Willis Tower Chicago ENHANCEMENT POTENTIAL Revival Food Hall 125 S. Clark Chicago Source: vonweiseassociates.com Source: Nick Fochtman via TheNationalChicago com Source: WillisTower.com Source: Dezeen.com EXISTING RiverWalk Terrace & Boat Dock ENHANCEMENT POTENTIAL Roof Deck 600 W. Chicago Chicago 5

6 Milwaukee Creative Office Rent Growth As tenants seeking an edge in the war for talent continue to migrate to Downtown Milwaukee, demand for creative office space has continued to rise driving strong rent growth within this unique category of inventory. As Milwaukee's original creative office submarket, the nearby Historic Third Ward experienced a dramatic decline in direct vacancy from 17.9% in 2010 to just 4.7% in Throughout this same period rents have continued to rise, increasing 8.0% from just 2016 to 2017 alone. With limited availabilities and growing tenants seeking larger floor plates, vintage office assets located in proximity to this bustling submarket, such as CityCenter, stand to benefit from robust demand for creative office product. Mark-to-Market Upside CityCenter's diverse rent roll mitigates overexposure to any particular industry while providing investors with stable existing cash flow. Additionally, with the vast majority of existing tenants leasing less than 10,000 RSF, investors are shielded from idiosyncratic risks posed by any particular occupant. As the Property undergoes creative office enhancements, investors will be granted the opportunity to mark in-place tenancy to market in the near term, adjusting in-place rents by as much as 60.9% within year one of the hold period. BYG Rents Upon Expiration vs. BYG Market Rent ( ) $35.00 $ % Rent / RSF $30.00 $25.00 $20.00 $15.00 $25.00 $15.59 $26.57 $17.33 $27.64 $21.04 $27.32 $21.77 $28.14 $20.32 $28.98 $19.48 $24.48 $18.21 $ % 8.0% 6.0% 4.0% 2.0% % RSF Expiring $10.00 % Below , % , % , % , % , % , % , % , % 0.0% 6 % RSF Expiring Wtd. Avg. Rent/Rent Upon LXD Avg. Market Rent/RSF To the extent the tenant has a fixed rate option the extension expiration date was used in the Mark-to-Market analysis.

7 Plentiful Area Amenities Located at the heart of Downtown Milwaukee, CityCenter is easily accessible by both suburban commuters as well as the city's growing base of urban residents. With ample on-site parking, the CityCenter Garage is conveniently accessed via Interstate-794 on-off ramps located just three blocks south of the Property and is in proximity to both General Mitchell International Airport as well as the Milwaukee Intermodal Station. The Property also benefits from direct access to the RiverWalk as well as proximity to a Bublr Bikes station located just steps away and a Milwaukee Streetcar stop located just two blocks away. 13 STAY 1 Milwaukee Athletic Club 2 Hotel Metro 3 The Pfister Hotel 4 Milwaukee Marriott 5 Hilton Garden Inn 6 InterContinental Milwaukee 7 Homewood Suites by Hilton 8 The Westin 9 Residence Inn by Marriott 10 Hampton Inn & Suites 11 Fairfield Inn & Suites by Marriott 12 Courtyard by Marriott 13 Hyatt Regency 14 SpringHill Suites by Marriott 15 Hilton Milwaukee City Center 16 DoubleTree by Hilton Hotel 17 Ramada by Wyndham 18 Drury Plaza Hotel 19 Kimpton Journeyman PLAY 1 The Riverside Theater 2 The Pabst Theater 3 Broadway Theatre Center 4 Milwaukee Repertory Theater 5 Miller High Life Theatre 6 Henry W. Maier Festival Park 7 Milwaukee Art Museum 8 Milwaukee Public Museum 9 Betty Brinn Children's Museum 10 Discovery World 11 Wisconsin Center 12 Cathedral Square Park 13 Fiserv Forum 14 UW-Milwaukee Panther Arena 15 Milwaukee Symphony Orchestra EAT & DRINK EXECUTIVE SUMMARY 1 Milwaukee Athletic Club 2 Mason Street Grill 3 Milwaukee Public Market 4 Marcus Restaurant Group 5 Amilinda 6 Zarletti 7 Millioke 8 Rock Bottom Restaurant & Brewery 9 SafeHouse 10 Third Coast Provisions 11 Mo's Irish Pub Milwaukee 12 Swingin' Door Exchange 13 Jimmy John's 14 Potbelly Sandwich Shop 15 Subway 16 Grassroots Salad Company 17 Dunkin Donuts 18 Pita Pit 19 The Coffee Bean 20 Colour Palate 21 Freshii GET HERE 1 Bublr Bikes 2 Milwaukee Public Mkt. Parking Lot 3 Milwaukee Intermodal Station 4 General Mitchell I'trl Airport 5 Milwaukee Hop Streetcar 6 East-West Freeway (Route 794) Milwaukee Streetcar Project: The Hop Milwaukee Intermodal Station 19 GENERAL MITCHELL INT L AIRPORT 10.3 Miles 16 Min Drive 3 7 6

8 The Revitalization of Downtown Milwaukee With convenient accessibility and a geographically central location within the heart of the country, a low relative cost of living and deep labor pools, Milwaukee has attracted substantial public and private investment in recent years with over $1.05 billion in recently competed infrastructure, recreation, hospitality, multi-family, parking, office and mixed-use development projects. With continued population growth projected in the coming years, Milwaukee as 43 evolved into a preeminent work, live, play city, providing investors a unique opportunity to capitalize on the growth provided by this rising market. Foxconn Development Project With 20 million RSF of new development, $10 billion in capital investment and 13,000 jobs committed to the State of Wisconsin, the Foxconn development project represents the largest greenfield investment by a foreign-based company in U.S. history. This historic project will be overseen from the company s brand new North American Headquarters and Innovation Center located just blocks from CityCenter at 611 East Wisconsin. With the location of Foxconn's nearby North American Headquarters just recently announced, the market has already seen increased interest from prospective vendors seeking office space in proximity to this important occupant. Milwaukee Streetcar Project The Hop Wisconsin Entertainment & Sports Center Fiserv Forum Phase I of this highly anticipated $128 million A $524 million 27-acre world-class sports and entertainment dis- public transportation initiative is well underway. trict and new home of the NBA s Milwaukee Bucks. The project will initially deliver 2.5 miles of streetcar track running north and eastbound from the Milwaukee Intermodal Station and is expected to deliver by the end of calendar year 2018 providing the already easily accessible CityCenter with even more convenient access to nearby transportation. 8 43

9 EXECUTIVE SUMMARY Milwaukee Streetcar Project The Hop Wisconsin Entertainment & Sports Center Fiserv Forum 10 MIN WALK The Milwaukee Riverwalk North American HQ & Innovation Center Milwaukee Gateway Project CBD 794 THIRD WARD Milwaukee Intermodal Station The Milwaukee RiverWalk Over 20 blocks of waterfront paths directly accessible from the Property connecting three of the city s most lively, distinctive and amenity rich neighborhoods: The Historic Third Ward, Downtown and Beerline B.794 Milwaukee Gateway Project With substantial improvements to nearby interstate access ramps already completed, this unique GENERAL MITCHELL between the City of Milwaukee, INT L AIRPORT 5TH multi-million dollar collaboration WARD Milwaukee County and the State10.3 Miles 16 Min Drive of Wisconsin plans to undertake additional future improvements to public spaces and access to the downtown lake front. 9

10 CONTACT INFORMATION HFF Chicago 150 North Riverside Suite 2500 Chicago, IL Telephone: Fax: INVESTMENT CONTACTS Jaime M. Fink Senior Managing Director Jeffrey M. Bramson Senior Managing Director/Managing Broker Sam M. DiFrancesca Director Bryan D. Rosenberg Director Patrick M. Shields Director Lindsey Rozran Analyst DEBT CONTACT Christopher N. Knight Director Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on HFF has been engaged by the owner of the property to market it for sale. Information concerning the property described herein has been obtained from sources other than HFF and we make no representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all references 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 buyer. Buyers should conduct their own independent investigation and rely on those results. The information contained herein is subject to change.