State-Leased Portfolio of 4 4 Office Properties Offered at $9,368,000 in Multiple Locations

Northmarq is pleased to offer for sale to qualified investors the opportunity to acquire the fee simple interest in a portfolio of four buildings leased to the State of Texas (the "Property"). The buildings may be purchased individually or in smaller groups as well. The State of Texas carries an investment-grade credit rating of AAA by Standard & Poor's and Aaa by Moody's.
Three of the properties (Angleton, Bellville & Hempstead) are suburbs of Houston. The fourth property (Sherman) is a suburb of Dallas. The Department of Family and Protective Services (DFPS) is a tenant at Angleton, Bellville and Sherman. Health and Human Services (HHSC) is also a tenant at Angleton and Bellville, as well as Hempstead. The third tenant in the portfolio is the Department of State Health Services (DSHS), located at the Bellville property.
All of these locations were build-to-suits for each tenant built in 2018, 2019 and 2020. The leases have approximately 3 to 5 years of remaining term, with a weighted average term just under 4 years for the portfolio. Each lease also has options remaining and they all feature annual CPI increases equivalent to 50% of the CPI, the highest percentage allowed by the State of Texas.
The four properties toal 42,921 SF and sit on a combined 7.6 acres. All four properties have been professionally maintained and are in great shape. As mentioned above, these locations are suburbs of Dallas and Houston. There are very few locations that support the suburbs. Most locations with the same tenant are 30+ miles away. Therefore, these tend to be sticky tenants with long-term occupancy at their locations.
Each of the locations has good visibility within its market and is nearby either the retail or office/medical corridor. They are all located nearby or adjacent to busy state highways as well. Additionally, each of these locations has a strong population base and household income. Within a 30-minute drive, the population ranges from 72,000 people (Bellville) to over 244,000 people (Hempstead). The average HH income averages from $68,000 (Bellville) to $142,000 (Hempstead).