Offering Memorandum - Stan Johnson...

Offering Memorandum

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Patterson-UTI Energy283 Shale Road Pleasanton, Texas 78064

ROUTE 281 (3,667 VPD)

VERTEX SOLUTIONS

COUNTY ROAD 430

COU

NTY RO

AD

429

Houston Office | 832.476.3440

Confidential DisclaimerThis Confidential Memorandum has been prepared by Stan Johnson Company (“SJC”) and is being furnished to you solely for the purpose of your review of the commercial property located at 283 Shale Road in Pleasanton, TX 78064 (the “Property”). The material contained in this Offering Memorandum shall be used for the purposes of evaluating the Property for acquisition and shall not be used for any purpose or made available to any other person without the express written consent of Stan Johnson Company (“Broker”).

By accepting the Confidential Memorandum, you acknowledge and agree that: (1) all of the information contained herein and any other information you will be receiving in connection with this transaction, whether oral, written or in any other form (collectively, the “Materials”), is confidential; (2) you will not reproduce the Confidential Memorandum in whole or in part; (3) if you do not wish to pursue this matter, you will return this Confidential Memorandum to SJC as soon as practicable together with all other materials relating to the Property which you may have received from SJC; and (4) any proposed actions by you which are inconsistent in any manner with the foregoing agreements will require the prior written consent of SJC.

This Confidential Memorandum has been prepared by SJC, based upon certain information pertaining to the Property and any information obtained from SJC to assist interested parties in making their own evaluation of the Property is offered on a no representation or warranty provision other than customary warranties of title and is sold on an “as-is, where-is” basis and with all faults. The material and transaction does not purport to be all inclusive. This Confidential Memorandum contains descriptive materials, financial information and other data compiled for the convenience of parties interested in the Property. The Materials are being delivered by SJC to prospective investors with the understanding that it is not all inclusive and that it is qualified in its entirety by independent investigation by prospective investors of those matters which they deem appropriate in evaluating this offering without reliance upon SJC, the Broker or any of their respective affiliates or any of the information set out in the Materials. Neither SJC, the Broker, nor any of their respective affiliates have independently verified any of the information contained herein or in any of the Materials, and no representations or warranties as to the accuracy or completeness thereof or of any other kind whatsoever are made or intended and none should be inferred.

SJC, for itself and its affiliates of the Property, expressly disclaim any and all liability for statements or representations, express or implied, contained herein or for omissions from the Materials or for any other written, oral or other format of communication transmitted to a prospective investor in the course of its evaluation of the proposed transaction. All summaries and discussions of documentation and/or financial information contained herein are qualified in their entirety by reference to the actual documents and/or financial statements, which upon request may be made available. The terms and conditions described herein are subject to change without notice.

This Confidential Memorandum does not constitute an offer to accept any investment proposal but is merely a solicitation of interest with respect to the investment described herein. The Confidential Memorandum does not constitute an offer of security. The investment described herein may be financed or withdrawn from the market, without prior notice. By accepting this Confidential Memorandum you agree to release SJC and hold it harmless from any kind of claim, expense, or liability arising out of your discovery or purchase of the Property. SJC reserves the right to request the return of the Materials at any time. Ownership of the Property reserves the right to negotiate with one or more prospective investors at any time.

Offered Exclusively ByAndrew Peeples | Director

[email protected] TX License #536694

Brett Butler | Senior Director [email protected]

Jeff Jackson | Associate

[email protected]

Neal Maranuk | Analyst [email protected]

In Association with:

Kristen Hegg Zueger, SIOR VanBuskirk Companies

[email protected]

Stan Johnson Company 10333 Richmond Avenue | Suite 740

Houston, Texas 77042 P: 832.476.3440 | F: 832.476.3449

http://www.stanjohnsonco.commailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20STmailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20STmailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20STmailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20ST

Investment HighlightsNew Construction - The Property was recently completed in 2014

Strong Credit Tenant – Universal Pressure Pumping, Inc. is a wholly owned subsidiary of Patterson-UTI Energy, Inc. (NASDAQ: PTEN). At the end of 2014, PTEN reported total revenues of over $3.1 billion, a net income of $162 million and a net worth exceeding $2.9 billion. Absolute NNN Lease - Landlord has zero responsibilities

Impressive Property Amenities – Two (2), 10-ton bridge cranes, eight (8) roll up doors, separate covered wash bay with water reclamation system, fully fenced yard and surveillance system with gated key card access

Large Stabilized Yard – Fully stabilized yard with approximately 9.1 acres of outside storage

Strategic Location - Subject Property is located within the Eagle Ford Shale region of South Texas, one of the most actively drilled targets for oil and gas in the US. Forecasts project close to 5,000 new wells will be drilled in the Eagle Ford Shale by 2020

Major Industrial Tenants Nearby - Baker Hughes, Halliburton, Weatherford, National Oilwell Varco, Pumpco Services, Pinnergy, Superior Well Services, FloQuip, Lufkin, Express Energy, Greene’s Energy Group, Flint, Lo Transport, E&P Wireline, Enterprise Products, Louisiana Crane, Code Red Safety, DRM Companies, Sunbelt Rentals, KDR Supply, EnSign Energy Services, Aveda Transportation & Energy Services, Boots & Coots, Cactus Wellhead, Cretic Energy Services, Rush Wellsite Services, Crest Pumping Technologies and Timco Services, among others

Stan Johnson Company is pleased to offer for sale to qualified investors an industrial property leased to Patterson-UTI Energy in Pleasanton, Texas, located at 283 Shale Road. The subject Property operates under an absolute NNN lease with a five (5) year base lease term and one (1), five (5) year option period.

Pleasanton is located within the Eagle Ford Shale, one of the most actively drilled targets for oil and gas in the United States. The Eagle Ford Shale play extends about 400 miles across South Texas in a 50-mile-wide band, from the Mexican border, below San Antonio and into East Texas. In October of last year, the Eagle Ford Shale reached production levels exceeding 1mm bpd of oil. The region is forecast to generate approximately $21.5 billion in total annual economic output and support roughly 68,000 full-time jobs by 2020.

Purchase Price $2,950,000

Cap Rate 12.00%

Representative Photo


http://www.stanjohnsonco.comhttp://www.stanjohnsonco.com

Investment Summary

Pleasanton, TX 78064

Purchase Price: $2,950,000

Cap Rate: 12.00%

NOI: $354,000

Tenant Name: Universal Pressure Pumping, Inc.

Base Rent Schedule

Years Base Rent

1 $354,000

2 (Current) $354,000

3 $354,000

4 $354,000

5 $354,000

6-10 (Option) $354,000



Lease Abstract


Property Type: Industrial

Tenant Name: Universal Pressure Pumping, Inc.

Lease Commencement: June 1, 2014

Base Lease Term: Five (5) yearsNOI: $354,000

Lease Type: Absolute NNN – no landlord responsibilities

Property Overview


Rentable SF: +/- 14,000 SF (2,400 SF Attached Wash Bay)

Lot Size: +/- 9.60 Acres

Construction: Engineered Steel

Year Built: 2014

Crane: Two (2), 10-ton bridge cranes

Water: Complete Evans Water Reclaim System

Yard: Fully graveled yard

Fence: Entire Perimeter



Tenant OverviewPatterson-UTI Energy, Inc. and its subsidiaries provide onshore contract drilling and pressure pumping services to exploration and production companies in North America. Patterson-UTI Drilling Company LLC and its subsidiaries have more than 275 marketable land-based drilling rigs and operate primarily in oil and natural gas producing regions in the continental United States, Alaska, and western and northern Canada. They serve major and independent oil and gas companies to provide a comprehensive drilling solution, including APEX® drilling rigs and crews who are committed to working safely, efficiently and in an environmentally responsible way.

The Universal brand is comprised of two pressure pumping companies that are a premier source for hydraulic fracturing, cementing, nitrogen and acidizing services for reservoir enhancement. Universal Well Services, Inc. is located in the Appalachian Basin and provides well services in the Marcellus and Utica Shale formations. Universal Pressure Pumping, Inc. is located throughout Texas and provides well services largely in the Permian, Barnett, and Eagle Ford basins.

Expert technical staff, well-seasoned project and field supervisors, along with dedicated on-site equipment operators and specialists are just a few who make up the team of experienced personnel that Universal has assembled. Their technological leadership is well recognized in the industry, and offer engineering support and technical assistance to develop innovative solutions to meet their clients’ needs.

For more than 30 years, Universal has been committed to the highest standards of ethics, safety, and innovation. They strive for economically sound and environmentally safe practices; developing new technology, protecting resources, and creating jobs.



Location OverviewPleasanton is a city in Atascosa County, Texas. The population was 8,934 at the 2010 census. Pleasanton’s official motto is “The City of Live Oaks and Friendly Folks.” It is part of the San Antonio-New Braunfels Metropolitan Statistical Area.

Pleasanton is located within the Eagle Ford Shale, one of the most actively drilled targets for oil and gas in the United States. Pleasanton’s location within this play is attracting many oil field related companies. Although Pleasanton isn’t located in the heart of the drilling activity (located on the map to the right), its close proximity and direct access to the workforce and amenities of San Antonio makes Pleasanton a premiere location for companies and their employees.

Downtown San Antonio is within 37 miles of Pleasanton, while Three Rivers, George West and Corpus Christi are located south of Pleasanton on the I-37 corridor. Pleasanton, compared to all of the small towns in the Eagle Ford, is the most developed and best prepared to handle the growth generated by this mammoth shale play. The city is taking steps to prepare for the continued and future growth as well.

Before the Eagle Ford made its mark on South Texas, Pleasanton was already an attractive small town, including ample housing, livable neighborhoods, Wal-Mart, HEB grocery, restaurants, retail and some light industrial development. In the last two years, new retail

has been developing rapidly along the city’s main commercial corridor, highway 97. Residential development continues to increase to meet the increasing demand, along with new hotels and workforce-housing solutions.

Oil field related companies have found land and buildings both inside and outside the city, further fueling the growth. Baker Hughes, Halliburton, Weatherford, National Oilwell Varco, Pumpco Services, Pinnergy, Superior Well Services, FloQuip, Lufkin, Express Energy, Greene’s Energy Group, Flint, Lo Transport, E&P Wireline, Enterprise Products, Louisiana Crane, Code Red Safety, DRM Companies, Sunbelt Rentals, KDR Supply, EnSign Energy Services, Aveda Transportation & Energy Services, Boots & Coots, Cactus Wellhead, Cretic Energy Services, Rush Wellsite Services, Crest Pumping Technologies and Timco Services, among others are just a few of the companies that are now located in Pleasanton. Pleasanton, TX is expected to be one of the top location preferences for Eagle Ford related business for years to come.

Pleasanton is located approximately 37 miles south of San Antonio, the seventh most populous city in the U.S. with over 1.3 million people, and the second most populous city in the state of Texas. It was the fastest growing of the top 10 largest cities in the United States from 2000-2010, and the second from 1990-2000. The

city is located in the American Southwest, the south–central part of Texas, and the southwestern corner of an urban region known as the Texas Triangle.

San Antonio serves as the seat of Bexar County. The city has characteristics of other western urban centers in which there are sparsely populated areas and a low density rate outside of the city limits. San Antonio is the center of the San Antonio–New Braunfels Metropolitan Statistical Area. Commonly referred to as Greater San Antonio, the metropolitan area has a population of over 2.23 million based on the 2012 U.S. Census estimate, making it the 24th-largest metropolitan area in the United States and third-largest in the state of Texas.

Eagle Ford Shale Wells Map



PLEASANTON MUNICIPAL

AIRPORT


FM 536 (1,044 VPD)

I-37 (20,790 VPD

)

PLEASANTON

ROUTE 281 (3,667 VPD)

JORDANTON


Demographics

283 Shale Road Pleasanton, TX 78064

0-5 Mile 0-10 Miles 0-15 Miles

Population

2000 Population 11,659 21,967 33,606

2010 Population 13,062 24,213 38,903

2015 Population 13,827 25,653 41,261

2020 Population 14,737 27,380 44,068

2015-2020 Annual Rate 1.28% 1.31% 1.33%

2015 Median Age 37.9 37.0 36.4

Race and Ethnicity

2015 White Alone 87.9% 86.0% 84.1%

2015 Black Alone 1.0% 1.0% 1.2%

2015 American Indian/Alaska Native one 0.9% 1.1% 1.0%

2015 Asian Alone 0.7% 0.5% 0.5%

2015 Pacific Islander Alone 0.1% 0.0% 0.0%

2015 Other Race 7.3% 9.1% 10.7%

2015 Two or More Races 2.1% 2.4% 2.5%

2015 Hispanic Origin (Any Race) 52.3% 58.6% 62.8%

Households

2000 Households 4,104 7,452 11,142

2010 Households 4,710 8,518 13,152

2015 Total Households 5,037 9,119 14,076

2020 Total Households 5,392 9,781 15,095

2010-2015 Annual Rate 1.29% 1.31% 1.30%

2015-2020 Annual Rate 1.37% 1.41% 1.41%

2015 Average Household Size 2.70 2.78 2.91

283 Shale Road Pleasanton, TX 78064

0-5 Mile 0-10 Miles 0-15 Miles

Median Household Income

2015 Median Household Income $53,422 $50,276 $49,536

2020 Median Household Income $59,495 $54,959 $54,273

2015-2020 Annual Rate 2.18% 1.80% 1.84%

Average Household Income

2015 Average Household Income $65,768 $61,050 $59,149

2020 Average Household Income $75,228 $69,218 $66,990

2015-2020 Annual Rate 2.72% 2.54% 2.52%

Per Capita Income

2015 Per Capita Income $24,237 $21,927 $20,376

2020 Per Capita Income $27,790 $24,943 $23,147

2015-2020 Annual Rate 2.77% 2.61% 2.58%

2015 Average Household Income



Andrew Peeples | Director [email protected]

TX License #536694

Brett Butler | Senior Director [email protected]

Jeff Jackson | Associate

[email protected]

Neal Maranuk | Analyst [email protected]

In Association with:

Kristen Hegg Zueger, SIOR VanBuskirk Companies

[email protected]

Stan Johnson Company 10333 Richmond Avenue | Suite 740

Houston, Texas 77042 P: 832.476.3440 | F: 832.476.3449

mailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20STmailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20STmailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20STmailto:jbaker%40stanjohnsonco.com?subject=Tenant%20%7C%20City%2C%20ST

EQUAL HOUSINGOPPO RTU N ITY

Approved by the Texas Real Estate Commission for Voluntary Use

efore working with a real estate broker, you shouldBknow that the duties of a broker depend on whomthe broker represents. If you are a prospectiveseller or landlord (owner) or a prospective buyer or

tenant (buyer), you should know that the broker who liststhe property for sale or lease is the owner’s agent. Abroker who acts as a subagent represents the owner incooperation with the listing broker. A broker who acts asa buyer’s agent represents the buyer. A broker may act asan intermediary between the parties if the partiesconsent in writing. A broker can assist you in locating aproperty, preparing a contract or lease, or obtainingfinancing without representing you. A broker is obligatedby law to treat you honestly.

IF THE BROKER REPRESENTS THE OWNER:The broker becomes the owner’s agent by entering into anagreement with the owner, usually through a written -listing agreement, or by agreeing to act as a subagent byaccepting an offer of subagency from the listing broker. Asubagent may work in a different real estate office. Alisting broker or subagent can assist the buyer but doesnot represent the buyer and must place the interests ofthe owner first. The buyer should not tell the owner’sagent anything the buyer would not want the owner toknow because an owner’s agent must disclose to theowner any material information known to the agent.

IF THE BROKER REPRESENTS THE BUYER:The broker becomes the buyer’s agent by entering into anagreement to represent the buyer, usually through awritten buyer representation agreement. A buyer’s agentcan assist the owner but does not represent the ownerand must place the interests of the buyer first. The ownershould not tell a buyer’s agent anything the owner wouldnot want the buyer to know because a buyer’s agent mustdisclose to the buyer any material information known to theagent.

IF THE BROKER ACTS AS AN INTERMEDIARY:A broker may act as an intermediary between the partiesif the broker complies with The Texas Real Estate License

Act. The broker must obtain the written consent of eachparty to the transaction to act as an intermediary. Thewritten consent must state who will pay the broker and, inconspicuous bold or underlined print, set forth the broker’sobligations as an intermediary. The broker is required totreat each party honestly and fairly and to comply withThe Texas Real Estate License Act. A broker who actsas an intermediary in a transaction:

(1) shall treat all parties honestly; (2) may not disclose that the owner will accept aprice less than the asking price unless authorized inwriting to do so by the owner; (3) may not disclose that the buyer will pay a pricegreater than the price submitted in a written offerunless authorized in writing to do so by the buyer; and(4) may not disclose any confidential information orany information that a party specifically instructs thebroker in writing not to disclose unless authorized inwriting to disclose the information or required to do soby The Texas Real Estate License Act or a courtorder or if the information materially relates to thecondition of the property.

With the parties’ consent, a broker acting as anintermediary between the parties may appoint a person whois licensed under The Texas Real Estate License Actand associated with the broker to communicate with andcarry out instructions of one party and another person whois licensed under that Act and associated with the brokerto communicate with and carry out instructions of theother party.

If you choose to have a broker represent you, you should enter into a written agreement with the brokerthat clearly establishes the broker’s obligations and yourobligations. The agreement should state how and bywhom the broker will be paid. You have the right tochoose the type of representation, if any, you wish toreceive. Your payment of a fee to a broker does notnecessarily establish that the broker represents you. If youhave any questions regarding the duties andresponsibilities of the broker, you should resolve thosequestions before proceeding.

Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a questionor complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 or 512-465-3960.

Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

Information About Brokerage Services

Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records.

Buyer, Seller, Landlord or Tenant Date

01A TREC No. OP-K

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