6711 Highway 332

• Market Location Map 
• Submarket Location Map 
• Encompass Profile 
• Brazoria CAD Site Information 
• Site Plan 

• Market Location Map
• Lease 1/2    Lease 2/2 
• Ampam 2000 Annual Report
• Ampam 2001 2nd Qtr Report
• HCAD Site Information
• HCAD Plat Map
• HCAD 2000 Taxes 

• Market Location Map

• US Industrial 1Qtr 2002

Source: CB RIchard Ellis
• Houston Industrial 1Qtr 2002 

Source: CB RIchard Ellis

• Offering Memorandum
• MBM-II Offering Flyer
• 1031 Exchange Documents

(Rhodes to Encompass)

Capital Commercial Investments, Inc. (CCI) offered its second long-term, high-income investment opportunity Mail Box Money-II (MBM-II) during 4th Quarter 2001.  Two industrial real estate properties, 12507 Telge Road and 20527 Rhodes, were combined to form the MBM-II partnership.  This is a high-income investment partnership allows investors to receive a 15% annual return distributed monthly.  The American Plumbing & Maintenance Facility is located at 12507 Telge Road, and totals 90,400 SF.  The property is on a 5.75 acre site and includes almost 12,500 SF of office space.  CCI purchased the property for $2,085,000 or $23.06 PSF in December 2001.  The Landell Industries facility is located at 20527 Rhodes in Northwest Houston, approximately 24 miles from Houston's central business district.  The real property includes 31,320 total square feet (SF) including more than 5,280 SF of office, and is situated on 3.0 acres.  CCI purchased the Rhodes property in March 2002 for $635,000 or $20.27 PSF.

Total equity investment in the MBM-II partnership was $1,350,000.  This partnership has 27 limited partnership shares held among 29 investors.  CCI anticipates distributing 15% cash-on-cash per annum to the limited partners while reserving funds each year for possible tenant rollover expenses.   The partnership agreement specifies a 75:25 LP:GP split after a 10% cumulative preferred return.

As investors may know, we sold the 20527 Rhodes Facility (31,320 SF) located in far north Houston, Texas after holding the property for 6 months.  The sales proceeds, as well as original partnership invested funds, will be used to purchase the Encompass facility located at 6711 Highway 332 in Freeport, TX.   The Encompass Facility was built in 1976 using tilt wall construction and totals 46,401 SF.  The property is on a 3.75 acre fenced site.  CCI has contracted to purchase the property for $1,147,000 or $25.06 PSF. 

Property The subject site is located on the south side of Highway 332, approximately one mile east of the Highway 332 and State Highway 227 (formerly S.H. 288) interchange.  The property consists of a 46,401 SF office/warehouse building located on 3.75 acres.  The site has 495.51 feet of frontage along Highway 332, the main east/west highway between Brazoria and Surfside.  The property has landscaping in the form of grass, bushes, trees, and lighted sidewalks.  The front, east, and west sides of the building have concrete parking areas and the rear of the site is presently covered with trees and undergrowth.

Public electric and telephone services are available and connected to the site.  Telephone is underground and electrical is above ground.  Water and sewer are from a new state-of-the-art, on-site system, which is more than adequate for the current use including any desired expansion.  No specific flood hazard factors are determined, and the property is not located in the 100 year flood plain. 

The subject site is improved with a tilt-wall construction office and warehouse building on a concrete slab creating total useable building area of 40,401 SF .  The building was constructed in 1976 and has 6,000 square feet of finished office space upstairs and 6,000 square feet downstairs outfitted with acoustical tile ceilings, 9' paneled walls, carpeting, and vinyl tile.  The warehouse has poured tilt-up concrete walls, concrete floors and a metal galvanized roof deck that supports a built-up roof.  There are four overhead doors with approximatley 18' high openings located on the east and west sideds of the building.  The building eave is approximately 24', and the second story mezzanine above the office is currently being used for storage.

Additional above grade site improvements include the aforementioned entry porch, other walkways, concrete parking, exterior floodlights, utility poles, a 14.7' x 49.3' concrete truck ramp on the east side of the building and chain link fencing with barbed wire.

Lease   The Property is 100 percent leased to one tenant with a weighted average annual net rental rate of $2.85 PSF.  Encompass Services Corp. is a typical tenant for the area, providing engineering construction services to the local Petrochemical industry.  The tenant’s lease structure features a stepped rental rate, allowing for automatic increases to the Property’s future net income. Encompass Services Corporation will execute a 10-year triple-net lease commencing on the first day of the month following closing. Encompass will be responsible for ad valorem real property and personal property taxes, building insurance coverage, common area maintenance - including all mechanical systems, plumbing lines, electrical service, structure and roof. Encompass will not be responsible for roof replacement at the end of the lease, so long as tenant continues to maintain the roof in a commercially responsible manner. The lease rates are as follows:

Years	Rent Amount	Cap Rate
1-3	$153,056.13	13.3%
4-5	$155,351.97	13.5%
6-7	$157,682.25	13.7%
8-10	$160,047.49	13.9%

AMPAM Facility 90,400 SF Http://www.ampam.com

Property  The property was built in 1980 and is located in Northwest Houston just west of FM 1960 and north of Highway 290.  The warehouse has clear-heights of 14’6”-26’.  The numerous docks allow both double-loading and side loading.  There are 4 dock edges with pit ramps, two with ground level doors, and 2 dock levelers with pit ramps. There are 97 parking spaces.  The electrical power service is 3-phase 277/480 volts. 

Property  The subject property is a one-story single tenant industrial building built in 1981.  The improvements include 5,280 SF of air-conditioned office area with 26,040 SF of warehouse space totaling 31,320 SF.  The warehouse portion has 25 foot clear height ceilings with six (6) grade level overhead doors.  The site includes 34,940 SF of paved storage area and 63 uncovered parking spaces.  There is 225 feet of frontage along Rhodes road.

The property is located in the northwest corner of the submarket.  The neighborhood is bounded by Spring-Stuebner Road on the north, Kuykendahl on the west, I-45 on the east and Spring Cypress Road on the south.  The major east/west thoroughfare within the neighborhood is F.M. 2920 and the major north/south thoroughfare is Kuykendahl. 

M.B.M.-II sold the Rhodes facility (31,320 SF) located at 20527 Rhodes in far north Houston after holding the propery for 6 months.  The proceeds have been placed into a 1031 exchange account, and we have named 6711 Highway 332 Freeport, Texas for the exchange.

• 3% General Inflation Factor is used for all Economic ProForma assumptions
• Given a Senior Note with a loan balance of approximately $2,100,000 (72% LTV) and a 7.75% interest rate, 20 year amortization
• Rollover cost including tenant improvements and leasing commissions will be paid through additional loan proceeds

 

• Investors may participate in ownership position of high income producing properties with an expected return of 15% per annum paid monthly.
• Assets are located in high growth corridors of Houston.
• Ampam is a well credited tenant with 2000 revenues of over $600 million; their 10-year lease at 12507 Telge is a low-risk investment in the country’s largest plumbing contractor.
• Leased properties are purchased for $20-$25 PSF, well below current replacement cost of more than $40 PSF.