8800 TECHNOLOGY FOREST
THE WOODLANDS, TEXAS
EXECUTIVE SUMMARY
HFF and Griffin Partners are pleased to offer for sale 8800 Technology Forest, a rare 12.4 acre redevelopment and repositioning opportunity within the most dynamic submarket in
Houston - The Woodlands. The site is the former campus of Lexicon Pharmaceuticals that was constructed between 1987 and 2002. The existing buildings total 260,950 square feet
and are comprised of office and laboratory space, as well as a large cafeteria. With deed restrictions allowing for up to 370,000 square feet of office and/or lab space on the site, it is an
ideal redevelopment candidate due to its infill location that is within close proximity to both Hughes Landing and Research Forest Lakeside. Given the strong barriers to entry and strict
development codes that exist in The Woodlands, this is the only currently available opportunity to capitalize on the unmatched momentum of The Woodlands office market.
PROPERTY SUM M ARY
Address:
8800 Technology Forest Drive
The Woodlands, TX 77381
Site Size:
12.3597 acres (538,389 SF)
Year Built:
1987 (Bldg. 1)
1998 (Bldg. 2)
2002 (Bldgs. 4,5,6)
Maximum Allowable NRA:
370,000 SF
Maximum Allowable Height:
55 feet
NET RENTABLE AREA
Building One:
36,750 SF
Building Two:
29,600 SF
Building Four (Main Building):
Building Five:
Building Six (Central Plant):
Total:
128,400 SF
60,000 SF
6,200 SF
260,950 SF
8800 TECHNOLOGY FOREST
EXECUTIVE SUMMARY
HOUSTON’S STRONGEST OFFICE SUBMARKET
The Woodlands is the strongest office submarket in the city of Houston with fundamentals that continue
to be the envy of its peers. The submarket has become a favored destination for growing companies
and corporate relocations over the past two decades, with renowned national and global corporations
such as ExxonMobil, Anadarko Petroleum, Huntsman Chemical, Chevron Phillips and Newfield Exploration
establishing large permanent locations in The Woodlands. Totaling over 10 million square feet of office
space in 85 properties, The Woodlands represents a critical mass of institutional quality office assets
located in an irreplaceable suburban location. Strong tenant demand along with restrictive development
standards have contributed to The Woodlands’ collectively high occupancy rates and above-average
rental rate growth. The current average occupancy of 93.3% represents the second highest average in
the Houston MSA, and average rental rates have grown 7% to $31.60 PSF gross in the trailing twelve
months ended June 2014, also the second highest in the city. The Woodlands office submarket remains
one of the tightest in Houston, posting positive net absorption every year since 2003 including a YTD total
of 754,301 square feet in 2014.
THE WOODLANDS AVERAGE NET ABSORPTION
794,066
800,000
654,662
600,000
637,496
552,361
530,848
507,397
417,466
400,000
235,644
200,000
98,853
EXTREMELY RARE REDEVELOPMENT OPPORTUNITY
Currently the corporate Headquarters for Lexicon Pharmaceuticals, 8800 Technology Forest offers an
extremely rare redevelopment and repositioning opportunity for a well-located asset/site in Houston’s
95,079
4,562
0
2004
2005
2006
2007
2008
2009
2010
Total Net Absorption
2011
2012
2013
YTD
2014
strongest office submarket, The Woodlands. Significant upside potential exists for potential investors
and developers due the scarcity of such opportunities in The Woodlands and the ability to capitalize on a
rapidly expanding office submarket in Houston, TX. While remarkable statistics such as an average rental
rate that has increased 30% over the past five years make the office market a clear leader, it is important
to note all aspects of The Woodlands that make this such a unique opportunity, including exceptional
demographics, powerful job growth, corporate in-migration, quality of life, single-family residential,
multi-housing, retail, hotel and entertainment venues. 8800 Technology Forest ‘s deed restrictions
allow for a maximum of 370,000 square feet on the 12.3 acre site, presenting a rare opportunity for an
outside developer to create a corporate campus in a submarket where most of the land is controlled by a
single entity, The Woodlands Development Company (a wholly-owned subsidiary of The Howard Hughes
Corporation).
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8800 TECHNOLOGY FOREST
EXECUTIVE SUMMARY
STRONG BARRIERS TO ENTRY, STRICT DEVELOPMENT CODE
With fewer assets and development sites in third party hands, it will become increasingly difficult to find
offerings similar to 8800 Technology Forest in The Woodlands. This is the best opportunity to invest in
Class A office development in the submarket and capitalize on the unprecedented levels of demand and
low vacancy rates by delivering as much value as possible in the near term. Despite having delivered 4.2
million square feet of office space since 2004, the submarket has absorbed an astonishing 4.5 million
square feet, or 106% of those deliveries over the same time period. The strict planning and development
standards set forth by The Woodlands Township such as landscape requirements, clearing restrictions
and architectural design criteria have been designed to preserve and enhance the aesthetic character and
improve the quality of life in The Woodlands, allowing it to maintain a robust office market.
QUALITY EXISTING CONSTRUCTION, OUTSTANDING LOCATION
8800 Technology Forest is one of the best opportunities for redevelopment in the City of Houston,
however the high quality of the existing buildings allow for numerous strategic alternatives for developers
GLOBALLY RECOGNIZED INVESTMENT MARKET
or investors alike. The main building on the campus, Building Four, was completed in 2002 and consists
Houston ranked as the fourth best city in the world for commercial real estate investment in a recent
of three-stories and 128,400 square feet, including a two-story cafeteria, break rooms and meeting
survey by The Association of Foreign Investors in Real Estate (“AFIRE”), a global commercial real estate
rooms, four large conference rooms with state-of-the-art technology and tremendous views of the lush
professional association representing over $2 trillion dollars of real estate assets under management.
landscaping surrounding the Property. The campus also includes a 6,200 square foot chilled water and
Not only did Houston move up one notch globally, but also in AFIRE’s rankings of top U.S. cities for
emergency generator plant consisting of three 800-ton chillers, three cooling towers and two 1500kW
foreign investment, jumping to third behind only New York and San Francisco. James A. Fetgatter, chief
emergency generators with the ability to add one more 800-ton chiller and one more cooling tower to
executive officer of AFIRE summarizes the survey by stating, “The strong endorsement of…Houston by
handle future needs. 8800 Technology Forest is well-located within the Venture Technology Center,
our members in this year’s survey directly reflects the propensity for real estate investment to follow jobs,
a master-planned business park comprised of 26 buildings and approximately 1.6 million square feet
in this case…energy, which [is] thought to be among the top drivers of the next economic wave.”
on Research Forest Blvd., providing direct access to Interstate 45 and the Houston CBD just 27 miles
In addition to the energy industry, Houston has one of the strongest manufacturing industries over the
to the south. Venture Technology Center is a true corporate setting with numerous owner-occupied
headquarters or regional offices for companies including Aon Hewitt, Huntsman Corporation, Maersk, Fox
Cable Network, and Clariant Oil.
past decade of any major city in the United States. Houston’s customs district is the fastest growing
district in the country outpacing both New York and Los Angeles. Houston currently ranks 1st in U.S. for
foreign tonnage and 2nd in U.S. for overall tonnage for the 18th consecutive year. Additionally, Houston
simply dominates all other major metropolitan areas in average annual wage adjusted for cost of living.
Houston’s $75,256 annual wage is almost 20 percent greater than the next closest metro area, combined
with living costs which are 18% below the average major MSA.
CONSISTENT ECONOMIC GROWTH
Houston has led the nation in population and employment growth over the past decade and significantly
outperformed since 2009. The Houston metropolitan area has grown to the 5th largest in the U.S. and
supports more jobs than the states of Tennessee or Wisconsin. Since the bottom of the global financial
crises in 2009, Houston has led the nation in percentage of jobs recovered at 224%. Over the past
12 months through April 2014, Houston has added 85,800 new jobs and in 2013, added 118,000 new
residents. Moody’s Analytics predicts that by 2017 Houston will add 329,300 new jobs and 461,000 new
residents, which is the second highest in the U.S. in both categories.
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8800 TECHNOLOGY FOREST
EXECUTIVE SUMMARY
THE SUCCESS OF THE WOODLANDS
The following facts and figures provide a quick snapshot of The Woodlands:
• Currently #3 best-selling master-planned community in Texas and #8 in the U.S.
• 28,000 acres total; 5,000 acres devoted to commercial development
THE WOODLANDS POPULATION AND JOB GROWTH
140,000
120,000
100,000
80,000
• Over 100 major companies
• 14 companies occupy 100,000 square feet or more
• $15.7 billion invested by all parties to date
• 17 miles from George Bush Intercontinental Airport
• 27 miles north of downtown Houston, fourth largest city in the U.S.
60,000
40,000
20,000
0
'00
'01
'02
'03
'04
'05
'06
'07
'08
Population
'09
'10
Jobs
'11
'12
'13
'14
Est.
'15
Est.
'16
Est.
'17
Est.
'18
Est.
• 28% (8,000 acres) dedicated to green space at build-out
• 1,901 employers (including 7 of Houston’s 23 Fortune 500 companies) and 54,504 employees
• 43,950 households in nine residential villages
Since its inception in 1974, The Woodlands has been developed with careful planning and a steadfast
dedication to excellence, expanding upon the original vision of founder George P. Mitchell. Encompassing
28,000 acres, this master-planned community is located 27 miles north of Houston’s central business
district within a densely wooded forest straddling Harris and Montgomery counties. The Woodlands affords
its citizens a unique combination of employment opportunities, residential options and retail offerings in a
natural setting surrounded by abundant recreation and leisure facilities. It is this ability to live, work and
play within a cohesive, environmentally-sensitive community that has helped the community achieve a
Top 5 ranking amongst all master-planned communities in the US and Texas for the past 10 years.
In recent years, The Woodlands has grown to be one of the largest employment centers in the Houston
MSA and is now the economic and commercial real estate epicenter of North Houston. Perhaps the most
impactful event to occur in The Woodlands is the corporate relocation of ExxonMobil, with construction
currently underway on their $1.0 billion, 385-acre corporate campus just south of The Woodlands. The
long term impact of this campus on The Woodlands is virtually immeasurable, bringing at least 14,000
employees to the area and driving demand for commercial space in The Woodlands.
High barriers to entry, a population base that consistently grows every year and a robust demand for
talent in the immediate area makes The Woodlands virtually recession-proof economically, reflecting
and perhaps feeding off of the incredibly strong fundamentals of the entire Houston MSA. Almost
forty years after breaking ground, The Woodlands now serves as the model community new suburban
developments across the country strive to emulate.
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8800 TECHNOLOGY FOREST
PROPOSED DEVELOPMENT RENDERINGS
RE S
E
FOR
ST
PROPOSED
BUILDING
CH
PROPOSED
BUILDING
EAR
PROPOSED GARAGE
DR
EXISTING BUILDING
TECHNOLOGY FOREST PLACE
*Renderings provided by Kirksey Architects
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8800 TECHNOLOGY FOREST
ANADARKO
TOWER I
THE WOODLANDS MALL
ANADARKO
TOWER II
THE WOODLANDS
TOWN CENTER
AY 45
INT ER STATE HIG HW
THE WOODLANDS WATERWAY
HUGHES LANDING
CHICAGO BRIDGE & IRON
HEADQUARTERS
EAST FACING AERIAL PHOTOGRAPH
CYNTHIA WOODS
MITCHELL PAVILION
RESEARCH FOREST LAKESIDE
LAKE WO
ODLA
N D S D R IV
E
BLACK FOREST
TECHNOLOGY PARK
NEW TRA ILS DRI VE
RE
SE
AR
CH
FO
RE
ST
DR
IV
E
TECHNOLOGY FOREST PLACE
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INVESTMENT SALES
LEASING / CONSTRUCTION CONTACTS
H. DAN MILLER, CCIM, SIOR
Senior Managing Director
Tel (713) 852-3576
[email protected]
J O S H C H E AT H A M
Partner
Tel (713) 439-5334
josh.cheatham@griffenpartners
TRENT AGNEW
Director
Tel (713) 852-3431
[email protected]
DREW LEWIS
Executive Managing Partner
Tel (713) 439-5328
[email protected]
WESLEY HIGHTOWER
Real Estate Analyst
Tel (713) 852-3495
[email protected]
FOR DEBT INQUIRIES
W A L LY R E I D
Senior Managing Director
Phone (713) 852-3497
[email protected]
9 Greenway Plaza, Suite 700
Houston, Texas 77046
Tel (713) 852-3500
Fax (713) 521-7334
hfflp.com
1177 West Loop South, Suite 1750
Houston Texas, 77027
Tel (713) 622-7714
Fax (713) 622-7415
www.griffinpartners.com
© 2014 HFF (NYSE: HF) 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 offers clients a fully integrated
national capital markets platform including debt placement, investment sales, structured finance, private equity, note sales and note sale advisory services and commercial loan servicing.
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.