FEDERAL EAST PLAZA HOUSTON, TEXAS EXECUTIVE SUMMARY

FEDERAL EAST PLAZA HOUSTON, TEXAS EXECUTIVE SUMMARY

INVESTMENT HIGHLIGHTS Located in a densely populated, fast-growing residential area with a population of 83,000 in a 3-mile radius Residential growth underpinned by proximity to Port of Houston, Greens Port Industrial Park and the CBD Immediate connectivity and visibility to one of Houston s busiest freeways Interstate 10 (123,000 VPD) New roof installed in 2017/2018 on 75% of the Property Loyal tenant base with average tenure of nearly 9 years at the property 50% of occupied NRA in the health industry (fitness, dental, dialysis) Ample parking ratio of 7 / 1,000 SF - almost double the code requirements which will facilitate potential development Ability to increase NOI by capitalizing on lease-up, embedded rent growth and development opportunities Located minutes from Houston s Port and Industrial facilities Federal Road is the only North/South artery between Beltway 8 and Loop 610. Offered free and clear of debt so investors can take advantage of historically accretive financing options

PROPERTY DASHBOARD PROPERTY SUMMARY Location: Year Built: Parking Ratio: FINANCIAL SUMMARY 12032 East Fwy Houston, TX 77029 I-10 East 1977 (2017 Renovation) 7.05/1000 SF Net Rentable Area: 93,323 Land Area: 13.32 Acres Occupancy: 93.0% Traffic Counts: I-10: 123,000 VPD Market St.: 10,600 VPD Total: 133,600 VPD Year 1 NOI: $1,094,304 Wtd. Average Tenure: 8.8 Years Wtd. Average Remaining Lease Term: 5.5 Years 5-Year CAGR: 6.62% 10-Year CAGR: 4.06% Percent Below Market: 17.27% Rollover Summary Within 3 Years of Operation: 10.6% Within 5 Years of Operation: 54.9% TENANT SUMMARY Tenant TENANT MIX Occupied SF LEASE EXPIRATIONS % of Property Tenure Fitness Connection 33,589 36.0% 11.5 Years Boot Barn 13,250 14.2% 1.4 Years Dot Coffee Shop 11,030 11.8% 4.6 Years Blue Bayou Cafe 6,689 7.2% 8.8 Years Fresenius 6,651 7.1% 0.6 Years Avenue Stores 4,510 4.8% 25.9 Years Bello Amanecer 3,504 3.8% 4.5 Years South Texas Dental 3,200 3.4% 21.6 Years Armstrong McCall Beauty Supply 2,000 2.1% 0.3 Years H&R Block 1,408 1.5% 25.4 Years Texas Management Division 992 1.1% 6.3 Years Total Leased 86,823 93.0% 8.8 Years Total Vacant 6,500 7.0% Total Property Size 93,323 40,000 35,000 30,000 100.00% 90.00% 80.00% 70.00% NET OPERATING INCOME - DEPENDABLE GROWTH $1,600,000 $1,500,000 $1,400,000 $1,300,000 $1,200,000 25,000 20,000 15,000 10,000 5,000-60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% $1,100,000 $1,000,000 6.62% CAGR 4.06% CAGR Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 National Regional Local Year 1 Year 2 Year 3 Year 4 Year 6 Year 7 Year 8 Year 9 Year 10 RSF Expiriing Cumulative % Expiring 3

SITE PLAN New Roof Fresenius Health 6,651 SF Bello Amanecer 3,504 SF 2,000 SF Armstrong McCall 2,000 SF 3,200 SF FITNESS 33,589 SF 13,250 SF Though stable, investors have opportunity to expand the center and create value 4 Points of ingress/egress from the Interstate-10 (East Freeway) service road provide easy access to the shopping center Selling the restaurant pads will allow for a reduced basis Access to Market Street Road Develop additional strip or junior anchor retail in Southwest Corner 7 / 1,000 SF Parking Ratio - $1.2 million of capital improvements spent on the parking lot ($450 k) and new roof(s) ($750 k) 4,500 SF TMD Temps H&R Block 4,510 SF 11,030 SF Pylon 6,689 SF Visibility of Dot and Blue Bayou Cafe draw customers to the center Destination retail drivers from Fresenius Health and Fitness Connection Frontage Road Interstate Highway I-10 312,000 VPD 4

WEST FACING AERIAL Market Street Road Downtown Houston Jacinto City Elementary School MARKET @ HUNTING BAYOU 1-10 East Bound Exit Ramp 5

EAST FACING AERIAL Houston Ship Channel (10 minutes) Greens Port (7 minutes) 1-10 East Bound On Ramp Access to Market Street Rd Market Street Road 1-10 East Bound Exit Ramp

RESIDENTAL AND DEMOGRAPHIC OVERVIEW Federal East Plaza is situated between the CBD and the Port of Houston, two of the city s largest employment districts. With 83,000 residents in a three mile radius earning an average household income of $52,300, the locally/regionally focused tenant base ideally caters to the surrounding population. SURROUNDING DEMOGRAPHICS DEMOGRAPHICS 1-MILE 3-MILE 5-MILE Population 18,160 83,141 186,294 2010 Population 15,151 75,628 170,758 Growth Since 2010 19.9% 9.9% 9.1% Expected Growth (5 Years) 8.5% 6.7% 6.5% Average HH Income $48,033 $52,276 $56,066 NORTHSHORE $80K - $250K HOME VALUE RIVIERA EAST $100K - $450K HOME VALUE FED EAST PLAZA PLEASANT VIEW $50K-170K HOME VALUE JACINTO CITY $95K - $160K HOME VALUE CLINTON PARK $30K-160K HOME VALUE GALENA PARK $50K-250K HOME VALUE GREENS PORT INDUSTRIAL PARK PORT OF HOUSTON 7

TRADE AREA DRIVERS NEARBY RESIDENTIAL POPULATION Diverse economic population earning $52,000+ annually that 69 The Woodlands MONTGOMERY Lake Houston State Park is underpinned by the Port of Houston, Greens Port Industrial LIBER T Y Park and the CBD. Situated in North Channel area of Houston, which has a population of more than 186,000 residents 20% population growth since 2010 within a mile of Fed East as nearby employment continues to expand HARRIS Greenspoint STRONG EMPLOYMENT FUNDAMENTALS George Bush Intercontinental Airport Recent $77 billion investment in downstream petrochemical Lake Houston development expected to add thousands of jobs Nearby Port of Houston is one of the largest in the world, 69 making the city the largest exporter in the nation Sheldon Reservoir Commitment to petrochemical and port expansion in the area expected to fuel retail spending in East Houston Fed East Plaza Energy Corridor RETAIL CORRIDOR Westchase George Bush Park The Galleria CBD Port of Houston Tight retail corridor along I-10 between I-610 and Beltway 8 San Jacinto Bay with 90% average occupancy No retail currently under construction, leaving existing Barbour s Cut Terminal FOR T BEND 69 centers to serve the rapidly growing population Galveston Bay William P. Hobby Airport Bayport Terminal Clear Lake Smithers Lake BR AZORIA GALVESTON 8

EAST HOUSTON PASADENA OVERVIEW EAST HOUSTON The Federal East Shopping Center is located in the rapidly growing East Houston/Pasadena area. Home to the Port of Houston and the North Channel, this area is the heart of the Gulf Coast petrochemical and refining sector. Due to a recent $77 billion investment in downstream petrochemical development, there is an expected job growth of over 265,000 new jobs in the upcoming few years. Downstream energy production is less volatile in times of oil economic distress than upstream production and therefore is reflective of a more stable job market for workers in that sector. The consumer base in East Houston has grown with the area and now has over $2.7 billion in annual retail expenditures. Located right off I-10 with easy access to downtown and all of East Houston, Federal East Center is situated in a prime location to take advantage of these consumers. PORT OF HOUSTON The Port of Houston is one of the busiest ports in the world and a vital component of Houston s economy. With more than 241 million tons of cargo moving through annually, it is considered 1st in the U.S. in foreign waterborne tonnage and 2nd in the U.S. in total tonnage. High volumes of foreign vessels from over 1,000 ports around the world have helped Houston develop into the global economy it is today. Additionally, Houston Ship Channel businesses contribute 1,174,567 jobs throughout the state, helping create more than $264.9 billion in statewide economic impact. East Houston is the gateway from the Port to Downtown Houston and to the entire state, perfectly positioned to capitalize on the economic growth that will inevitably continue to grow throughout the area. FED EAST PLAZA 12001 East Freeway Shopping Center 10-Federal Shopping Center woodforest Shopping Center Northshore Shopping Center The Shops at stone park The Market at Hunting Bayou Brown Shipbuilding Industrial park Texas Terminal LP GE Energy Houston Ship Channel Port of Houston Kinder morgan texas terminal 9

COMPETITIVE PROPERTIES WOODFOREST SHOPPING CENTER Sqft: 112,985 Drive Distance: 4.9 miles Tenants: DD s Discounts, Palais Royal, Cici s Pizza, Advance Auto Parts, Rainbow Shops THE MARKET AT HUNTING BAYOU Sqft: 238,502 Drive Distance:.5 miles Tenants: Tinseltown, 24 Hour Fitness, Chili s, Goodwill, Marble Slab Creamery 12001 EAST FWY Drive Distance: 1.2 miles Tenants: Fiesta Mart, Baby Depot, Burlington Coat Factory, Family Thrift Center, Cricket 10-FEDERAL SHOPPING CENTER Sqft: 132,472 Drive Distance: 1.9 miles Tenants: Sellers Bros, Palais Royal, Citi Trends, Casa Ole and Harbor Freight Tools NORTHSHORE EAST SHOPPING CENTER Sqft: 230,779 Drive Distance: 3.2 miles Tenants: Sellers Bros, Melrose, Conn s, Dollar Tree, Rent-A-Center THE SHOPS AT STONE PARK Sqft: 250,000 Drive Distance: 8.1 miles Tenants: JCPenney, Marshalls, Party City, Staples, Best Buy 10

INVESTMENT SALES RYAN WEST Senior Managing Director T. (713) 852-3535 rwest@hfflp.com DEBT INQUIRIES MICHAEL JOHNSON Director T. (713) 852-3474 mjohnson@hfflp.com JOHN INDELLI Director T. (713) 852-3407 jindelli@hfflp.com CHARLIE STRAUSS Real Estate Analyst T. (713) 212-6574 cstrauss@hfflp.com HFF HOUSTON 9 Greenway Plaza, Suite 700 Houston, Texas 77046 T. (713) 852-3500 F. (713) 527-8725 hfflp.com Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker ( HFF ). 2017 HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 22 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF. HFF has been engaged by the owner of the property [properties] to market it [them] for sale. Information concerning the property [properties] 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.