12200 GULF FREEWAYHOUSTON, TEXAS 77034

CONFIDENTIAL OFFERING MEMORANDUM

Ojos Locos recently amended their lease to be NNN lease

Investment SummaryLocation

Tenant Ojos Locos Sports Cantina

Site Area

Building Area

Lease Type NN

Lease Commencement Date

Lease Expiration Date

NOI

Options F

Visibility

Remaining

EXECUTIVE SUMMARY

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NNN $2MLease with 10%

bumps every 5 years Low Price PointAnnual NOI

Price: $2,050,000

Cap Rate: 6.0%

$ 12200 Gulf Freeway, Houston, TX 77034

Site Plan

Address: 12200 Gulf Freeway, Houston, TX 77034

Tenant: Ojos Locos Sports Cantina

Site Area: 0.574 Acres

Building Size: 7,980 SF

Rent Commencement Date: 4/1/2013 (4/1/2018 1st Admendment)

Term: 180 Months

Renewal Options: Four, 5-year options to extend the Term with not more than twelve (12) but no less than six (6) months notice.

Base Rent Months 1-60: $121,599.96 annuallyMonths 61-120: $133,100.04 annuallyMonths 121-180: $146,409.96 annually

Option 1 - Months 181-240: $161,000.04 annuallyOption 2 - Months 241-300: $177.000annuallyOption 3 - Months 301-360: $194,000.04Option 4 - Months 361-420: $213,999.96

NNN Lease: Tenant is responsible for paying Landlord’s Pro Rata Share of CAM Costs, Tax Expenses, and Insurance Expenses directly to billing authorities. Tenant additionally responsible for repair and maintenance of the property.

Use: Solely for the purpose of the operation of a casual dining restaurant selling food and alcohol for on-premises consumption, and the sale of food for off-premises consumption, together with the right to sell merchandise promoting or contemplating Tenant’s business, and for no other use or purpose.

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LEASE ABSTRACT & SITE PLAN

Ojos Locos Sports CantinaOjos Locos, founded in 2010, is a sports cantina focused on offering state of the art

TV’s that are constantly streaming soccer, boxing, UFC, NFL, MLB, and NBA games for

its customers. Very similar to Hooter’s with a concentration on Hispanic heritage, the

restaurant & bar is known for its authentic Mexican food, friendly and fun atmosphere,

as well as the “Balon”, their signature 29 degree draft beer. Since its original opening,

Ojos Locos has grown to operate nine locations spread across Houston, Dallas, San

Antonio, Fort Worth, El Paso, and Albuquerque.

Lease Abstract - 1st Amendment

TRADE AREA DRIVERS

Nearby Residential Population• Nearby population driven by major employment from the Port of Houston and

NASA

• Location on I-45 provides easy connectivity to the CBD and other major

employment districts via Beltway 8 and the Loop 610

• $63,000+ average household income and median home value of $131,000+

within a 3-mile radius

• 15,620 multi-family units within a 3-mile radius

Employment• Major nearby employment from NASA, William P. Hobby International Airport,

and the Port of Houston

• 1.45 million SF of office space within a 3-mile radius with an occupancy of

88.8%, more than 6% better than the Houston market overall

• 8.8 million SF of industrial space with a 95.5% occupancy within a 3-mile radius

• 90,000 employees within 5 miles

Retail• Foot traffic to the Property driven by Almeda Mall, which had $86 million in sales

in 2017, a 30+% increase since 2012

• Anchor tenant Macy’s spent $27 million on a remodel in the last decade

• I-45 Frontage provides exposure to 207,000+ vehicles per day

• Other major nearby shopping attractions include Almeda Crossing Shopping

Center and Sam’s Club

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DEMOGRAPHICS 1-MILE 3-MILE 5-MILEPopulation 15,062 134,391 286,0472010 Population 13,426 124,039 264,1532022 Projection 16,448 146,000 310,808Growth Since 2010 12.2% 8.3% 8.3%Expected Growth (5 Years) 9.2% 8.6% 8.7%Average HH Income $59,197 $63,426 $65,828Median Home Value $123,693 $131,661 $135,508

ALMEDA MALL

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WilliamP. HobbyAirport

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Almeda MallAlmeda Mall, located in Southeast

Houston directly on I-45 just inside

Beltway 8, is a local mall that was opened

in 1968. The 564,750 square foot shopping

mall serves all of Southeast Houston,

such as Clear Lake and Pasadena. Nearly

10 miles south, the Baybrook Mall is the

closest nearby regional mall.

Both the ownership and tenant base are

committed to the location with significant

investment. Most recently in 2015,

Almeda Mall underwent a $7 million dollar

renovation which included new white

tile floors, roof/skylight improvements,

lighting, a newly redesigned center court,

and parking lot improvements. These

changes have helped the mall obtain a

fresh, new look. Additionally, in the mid-

2000’s, Macy invested $27 million in their

space, which has led to strong growth in

performance for the store.

As of the latest full reporting year, 2017,

Almeda Mall had $86 million in sales.

With that figure, the mall has increased

its sales by more than 30% since 2012.

Due to the strength of performance

and I-45 frontage, the mall boasts a 88%

occupancy.

EAST FACING AERIAL

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ALMEDA MALL

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HARRISCOUNTY

LIBERTYCOUNTY

FORT BENDCOUNTY

MONTGOMERYCOUNTY

BRAZORIACOUNTY

GALVESTONCOUNTY

Downtown

EnergyCorridor

The GalleriaWestchase

Greenspoint

The Woodlands

TexasMedical Center

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Houston Retail Overview• The Houston retail market remained stable during the fourth quarter of 2017, with the majority of market

fundamentals making positive gains from the end of 3Q 2017. The vacancy rate decreased from 5.6%

in the previous quarter to 5.5% in the current quarter. Net absorption was a positive 1,519,000 SF, with

vacant sublease space decreasing by 24,500 SF. Quoted rental rates increased from the third quarter of

2017, ending at $16.68 per square foot per year. A total of 57 buildings with 1.1 million square feet of retail

space were delivered to the market in the quarter, with 2.7 million square feet under construction at the

end of the quarter.

Inventory and Construction• During the fourth quarter of 2017, 57 buildings totaling 1.1 million square feet were completed in the

Houston retail market. Over the past four quarters, a total of 5.1 million square feet of retail space has

been built in Houston. There was 2.7 million square feet of retail space under construction at the end of

the fourth quarter of 2017. Total retail inventory in the Houston market area amounted to 337.2 million

square feet in 13,452 buildings.

Net Absorption• Retail net absorption was strong in Houston fourth quarter 2017, with a positive 1,519,000 square feet

absorbed in the quarter. In the third quarter of 2017, net absorption was positive 1.32 million, while in the

second quarter, absorption came in at a positive 1.29 million square feet. In the first quarter of 2017, net

absorption was a positive 1.30 million square feet in the market.

Vacancy• Over the past four quarters, the market has seen an overall increase in vacancy rate, with the rate going

from 5.2% in the first quarter of 2017, to 5.4% in the second quarter of 2017, to 5.6% in the third quarter of

2017. Houston’s retail vacancy decreased slightly in the fourth quarter of 2017, ending the quarter at 5.6%.

Rental Rates• Average quoted asking rental rates in the Houston Retail Market have grown significantly over previous

quarter levels. Quoted rents ended the fourth quarter of 2017 at $16.68 per square foot per year. That

compares to $16.47 per square foot in the third quarter 2016, and $16.32 per square foot at the end of the

second quarter. This represents an 1.3% increase in rental rates in the current quarter, and a 2.6% increase

from four quarters ago.

Inventory

• 13,452 Buildings

• 337,155,288 Total GLA

Vacancy

• 18,511,507 Direct SF

• 18,731,035 Total SF

• 5.5% Vacant

Net Absorption

• Q4 2017: 1,519,000 SF

• T-12: 3,038,907 SF

Deliveries

• Q4 2017: 1,154,272 SF

• T-12: 5,073,369 SF

Under Construction

• 120 Buildings

• 2,722,243Total GLA

Rental Rates

• $16.68 Avg. Quoted Rent

HOUSTON MSASOUTH EAST

Deliveries Net Absorption Vacancy Rate Forecast

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

(500,000)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

20131Q 2Q 3Q 4Q

20141Q 2Q 3Q 4Q

20151Q 2Q 3Q 4Q

20161Q 2Q 3Q

20171Q 2Q 3Q 4Q

20181Q 2Q 3Q 4Q

Houston Retail Supply & Demand

#1 in Retail Investment Returns on a 5- and 10-Year Hold Basis according to The National Council of Real

Estate Investment (NCREIF)

HOUSTON RETAIL SUPPLY & DEMAND

Inventory

• 2090 Buildings• 51,661,148 Total GLA

Vacancy• 3,046579 Direct SF• 3,087,200 Total SF• 6.0% Vacant

Net Absorption• Q4 2017: 20,979 SF• T-12: 334,378 SF

Deliveries• Q4 2017: 63,852 SF• T-12: 351,074 SF

Under Construction• 18 Buildings• 277,384 Total GLA

Rental Rates• $14.57 Avg. Quoted Rent

MARKET OVERVIEW

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ADDITIONAL INFORMATIONRYAN WEST Senior Managing Director | rwest@hfflp.com | 713-852-3535

CHARLIE STRAUSS Analyst | cstrauss@hfflp.com | 713-212-6574

FOR FINANCING INQUIRIESMICHAEL JOHNSON Director | mjohnson@hfflp.com | 713-852-3474

This Offering Memorandum has been prepared by HFF for use by a limited number of recipients. All information contained herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective

equity holders, officers, employees and agents makes any representations or warranties, expressed or implied, as to the accuracy or completeness of the information contained herein. Further, the Offering Memorandum does not

constitute a representation that no change in the business or affairs of the property or the Owner has occurred since the date of the preparation of the Offering Memorandum. All analysis and verification of the information contained

in the Offering Memorandum is solely the responsibility of the recipient. HFF and Owner and their respective officers, directors, employees, equity holders and agents expressly disclaim any and all liability that may be based upon

or relate to the use of the information contained in this Offering Memorandum.

Additional information and an opportunity to inspect the property will be made available upon written request to interested and qualified prospective investors.

Owner and HFF each expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers regarding the property and/or terminate discussions with any entity at any time with or without notice.

Owner shall have no legal commitment or obligations to any recipient reviewing this Offering Memorandum or making an offer to purchase the property unless and until such offer is approved by Owner, a written agreement for the

purchase of the property has been fully executed, delivered and approved by Owner and its legal counsel, and any obligations set by Owner thereunder have been satisfied or waived.

The recipient (“Recipient”) agrees that (a) the Offering Memorandum and its contents are confidential information, except for such information contained in the Offering Memorandum, which is a matter of public record, or is provided

from sources available to the public (b) the Recipient, the Recipient’s employees, agents and consultants (collectively, the “need to know parties”) will hold and treat it in the strictest of confidence, and the Recipient and the need to

know parties will not, directly or indirectly, disclose or permit anyone else to disclose its contents to any other person, firm, or entity without the prior written authorization of HFF and the Owner, and (c) the Recipient and the need to

know parties will not use or permit to be used this Offering Memorandum or its contents in any fashion or manner detrimental to the interest of the Owner or HFF or for any purpose other than use in considering whether to purchase

the property. The Recipient and the need to know parties agree to keep this Offering Memorandum and all confidential information contained herein permanently confidential and further agree to use this Offering Memorandum for

the purpose set forth above. If the Recipient has no interest in the property, or if in the future the Recipient or owner discontinue such negotiations, the Recipient will return this Offering Memorandum to HFF. 02/18