281 VETERANS MEMORIAL HIGHWAY SE - SK Commercial Realty · SK COMMERCIAL REALTY ATLANTA, GEORGIA OFFERING MEMORANDUM 281 VETERANS MEMORIAL HIGHWAY SE 7 DEMOGRAPHICS EXECUTIVE SUMMARY

OFFERING MEMORANDUM

281 VETERANS MEMORIAL HIGHWAY SEMABLETON, GA 30126

SPENCER COAN, CAIA, CCIMSVP - [email protected]

JARED BARNETT, ESQ.VP - [email protected]

TABLE OF CONTENTS

INTRODUCTIONSK Commercial Realty is pleased to exclusively present the opportunity to acquire 281

Veterans Memorial Hwy SE (“281 VM”), a 181,260 SF warehouse with prominent visibility

to the nearly 30,000 vehicles per day. Situated on 8.07 acres on the border of Atlanta’s

sought after SE Cobb/I-20 West Industrial submarkets, the property has easy access

to I-285, I-20, Fulton County Airport, and Hartsfield-Jackson International Airport, the

world’s busiest airport. 281 VM is a fantastic property for warehousing, logistics, and

e-commerce companies, but also lends itself to additional retail and/or commercial uses.

The facility was built in 1998, expanded in 2003, and has undergone substantial capital

improvements over the past year, leaving little to no deferred maintenance for the next

owner. The building features a wet sprinkler system, 32’ ceiling heights, 26 dock doors

(dock-high, van-level, and flat-level entry), climate-controlled showroom space, and ten

bathrooms to accommodate a multi-tenant layout. The property is currently 91% leased

to a versatile tenant roster. 281 VM provides stable cash flows and limited rollover risk,

with upside through additional lease-up and rental rate appreciation. The quality of the

asset, limited competition, and upside potential make 281 VM a compelling opportunity

for investors and owner-users.

INVESTMENT SALES TEAM

01 EXECUTIVE SUMMARY

Investment Profile Investment Highlights Demographics Existing Lease Expirations Overview of Investment Highlights

02 PROPERTY OVERVIEW

Property Information Design and Construction Capital Improvements Area Maps Aerial Photographs Renderings Zoning As-Built Floor Plans

03 TENANT OVERVIEW

Stacking Plan Rent Roll

04 MARKET OVERVIEW

City of Atlanta Fortune 1000 Headquarters Atlanta Industrial Market SE Cobb/Marietta & I-20W Submarkets

05 FINANCIAL OVERVIEW

Summary of Financial Assumptions Cash Flow Projections In-Place Income Reconciliation Sales Comps

SPENCER COAN, CAIA, CCIMSenior Vice President – InvestmentsO: 404.252.1200C: [email protected]

JARED BARNETT, ESQVice President – InvestmentsO: 404.252.1200C: [email protected]

281 VETERANS MEMORIAL HWY SE

EXECUTIVE SUMMARY• INVESTMENT PROFILE

• INVESTMENT HIGHLIGHTS

• DEMOGRAPHICS

• EXISTING LEASE EXPIRATIONS

• OVERVIEW OF INVESTMENT HIGHLIGHTS

01

SK COMMERCIAL REALTYATLANTA, GEORGIA

OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 5

INVESTMENT PROFILE

SK Commercial Realty is pleased to exclusively present the

opportunity to acquire 281 Veterans Memorial Hwy SE, a 181,260 SF

warehouse located within three miles of I-285 in SE Cobb County.

This well-recognized property is one of the largest facilities of

its kind in this high-growth and rapidly revitalizing corridor of

Atlanta. The property boasts a diverse tenant roster, with 91% of

the property leased to six proven tenants. The close proximity

to interstate highways and major thoroughfares, combined with

its visibility and strong demographics (Smyrna, Mableton, and

Vinings), make the property a desirable asset for an investor or

owner-user. The constrained industrial market and limited land for

future industrial development in the immediate vicinity make 281

VM a unique investment opportunity.

EXECUTIVE SUMMARY

RSF: 181,260

FLOORS: 1 w/ 2nd Floor Showroom

YEAR COMPLETED: 1998 & 2003

DEBT STRUCTURE: Free and Clear

PROPERTY INTEREST: Fee Simple

ACREAGE: 8.07

OCCUPANCY: 91.0%

IN-PLACE NOI: $503,568

PROJECTED Y2 NOI: $545,600

PROJECTED Y3 NOI: $592,769



INVESTMENT HIGHLIGHTS

STRONG MARKET DYNAMICS – As one of the best industrial markets in the nation, Atlanta currently boasts an industrial vacancy rate of 7.0%, the lowest rate since 2001. Among Atlanta’s submarkets, the SE Cobb and I-20 West submarkets have been two of the strongest in recent years. While one of the largest industrial submarkets in the metro area, SE Cobb matched the city’s 7.0% vacancy rate, but gross asking rents of over $6.00/SF significantly outpaced Atlanta’s average. The I-20 West submarket has enjoyed similar success in recent years, with early 2017 vacancy rates at 6.0% and gross asking rents at nearly $5.40/SF. The increasingly logistics-oriented economy has resulted in an influx of investment into Atlanta, highlighted by the UPS 1.2MM SF “Majestic” airhub adjacent to Fulton County-Brown Airport. The development will be the company’s third largest distribution facility in the country.

RENTAL RATE APPRECIATION – Multiple factors have created a climate for significant rental rate appreciation around 281 VM. The prolific shift in the economy to a logistics-based e-commerce model has produced great demand for industrial space, especially around major interstates. Atlanta’s impressive highway and rail system, access to the deep-water Ports of Savannah and Charleston, and proximity to Hartsfield-Jackson International Airport has attracted thousands of businesses and tightened industrial supply. This trend, along with the redevelopment of West Midtown from industrial to high-end mixed use developments, have pushed quality industrial tenants into surrounding submarkets. Construction costs, limited land availability, and significant barriers to entry have limited and will further limit competition, which will benefit 281 VM for the foreseeable future. As such, any prospective tenant desiring value-oriented warehouse space will consider 281 VM a solid option.

MODERN FEATURES/VERSATILITY – In addition to the strong market dynamics and rental rate appreciation, 281 VM boasts more modern features than the majority of its competition. Such features include 26 dock doors, 32’ ceiling heights, and a wet sprinkler system throughout. The layout of the property lends itself to a single tenant or multi-tenant floor plan, which offers diversification benefits to an investor or owner-user. The climate-controlled showroom component of the property can be used as an auxiliary office for an anchor tenant or as a separate retail/showroom space, if desired. The property’s prominent location and visibility along the Veterans Memorial Hwy corridor provide signage opportunities for business wanting to showcase their branding, and thanks to a recent capital improvement campaign, the property shows very well and has little to no deferred maintenance.

IMPRESSIVE DEMOGRAPHICS – Statistical data from CoStar reveals a number of impressive figures about the area surrounding 281 VM. Most notably, average household income within a one mile radius is $108,610, more than double the national average. This strength is further reflected in the area’s median home values, which exceed $250,000. Population growth within a five mile radius is estimated at nearly 15% between 2010-present day, bringing the population to more than 165,000 people. There is still significant growth occurring, with estimates suggesting that an additional 10,000+ people will move to the area by 2022.

This opportunity is highlighted by a number of factors, including strong market dynamics, rental rate appreciation, modern features/versatility, and impressive demographics.

EXECUTIVE SUMMARY



DEMOGRAPHICS EXECUTIVE SUMMARY

RADIUS 1 MILE 3 MILES 5 MILES

Population 2022 Projection 6,383 58,324 176,780

Population 2017 Estimate 6,021 54,524 165,317

Population 2010 Census 5,923 50,853 151,564

2017-2022 Population Growth % 6.01% 6.97% 6.93%

2010-2022 Population Growth % 7.77% 14.69% 16.64%

Households 2022 Projection 2,321 21,686 69,318

Households 2017 Estimate 2,189 20,282 64,856

Households 2010 Census 2,156 18,980 59,791

2017-2022 Household Growth % 6.03% 6.92% 6.88%

2010-2022 Household Growth % 7.65% 14.26% 15.93%

2017 Average Household Income $108,891 $90,898 $84,044

2017 Median Household Income $80,142 $69,472 $60,818

Median Home Value $250,226 $209,900 $194,108



EXISTING LEASE EXPIRATIONS EXECUTIVE SUMMARY

[1] BASED ON 181,260 SQUARE FEET.

60,000

RE

NTA

BL

E S

QU

AR

E F

EE

T

40,000

20,000

2022

FISCALYEAR

NUMBEROF SUITES

RENTABLESQUARE FEET

EXPIRING ANNUAL [1] CUMULATIVE [1]

2018 1 55,000 30.34% 30.34%

2019 1 10,000 5.52% 35.86%

2020 0 0 0.00% 35.86%

2021 1 21,000 11.59% 47.45%

2022 1 26,000 14.34% 61.79%

2023 0 0 0.00% 61.79%

2024 1 28,000 15.45% 77.24%

2025 0 0 0.00% 77.24%

BEYOND 1 25,000 13.79% 91.03%

SUBTOTAL 6 165,000 91.03% 91.03%

VACANT 1 16,260 8.97% 100.00%

TOTAL 7 181,260 100.00% 100.00%

2018 2019 2020 2021 BEYOND2023 2024 2025



OVERVIEW OF INVESTMENT HIGHLIGHTS EXECUTIVE SUMMARY

STRONG MARKET DYNAMICS

RENTAL RATE APPRECIATION

MODERN FEATURES/VERSATILITY

IMPRESSIVE DEMOGRAPHICS

281 VETERANS MEMORIAL HIGHWAY SE

PROPERTY OVERVIEW• PROPERTY INFORMATION

• DESIGN AND CONSTRUCTION

• CAPITAL IMPROVEMENTS

• AREA MAPS

• AERIAL PHOTOGRAPHS

• RENDERINGS

• ZONING

• AS-BUILT FLOOR PLANS

02



PROPERTY INFORMATION PROPERTY OVERVIEW

ADDRESS:281 Veterans Memorial Hwy SE

Mableton, Georgia 30126

SUBMARKET: SE Cobb County/Marietta Industrial

COUNTY: Cobb

YEAR COMPLETED: 1998 & 2003

RENTABLE SF: 181,260 RSF

NUMBER OF FLOORS:Warehouse: 1 Floor

Office/Showroom: 2 Floors

PARKING SPACES: 95 (0.5/1,000)

TAX ID/PARCEL ID: 18-0045-0-008-0

SITE ACREAGE: 8.07 Acres

ZONING: OS + Additional Uses

(Cobb County)



FOUNDATION: Concrete slab poured on grade with concrete footings

CONSTRUCTION:Steel frame with metal exterior with brick and metal exterior

CEILINGS:Exposed steel decking in office/showroom and warehouse area

HVAC:Central HVAC with exterior ground-mounted compressors for office/showroom; forced-air gas heaters in warehouse

ELECTRICAL: 480v 3-phase heavy power

FIRE PROTECTION: Wet sprinkler system throughout

CEILING HEIGHTS: Ceiling heights: range from 25’ to 35’ Clear heights: range from 22’ to 32’

DOCK DOORS: 21 dock high; 5 van level/flat-level entry

LIGHTING:Fluorescent lighting in office; metal hallide in warehouse, which also features abundant skylights throughout

DESIGN AND CONSTRUCTION PROPERTY OVERVIEW

BEAM SPACING: Main Warehouse: 25’ x 66’Expansion Warehouse: 25’ x 85’

PLUMBING:Copper supply lines and PVC waste lines; ten (10) restrooms

WINDOWS:Double hung with aluminum frames; insulated glass

ROOF:Pitched



CAPITAL IMPROVEMENTS PROPERTY OVERVIEW

281 Veterans Memorial Hwy SE has undergone significant capital improvements over the last year, totalling approximately $350,000.

CATEGORY APPROX. COST DESCRIPTION

FENCING $3,000 REPAIRED PRIVACY FENCE ALONG WESTERN BORDER

LANDSCAPING $28,000CLEANED DETENTION POND; REMOVED/REPLACED DEAD TREES; NEW PLANTINGS

DUMPSTER ENCLOSURE $5,000 DUMPSTER ENCLOSURE

PAINTING $25,000 PAINTED TRIM & FACADE; POWER WASHED

SIGNAGE/AWNINGS $20,000NEW MONUMENT SIGN; REMOVED OLD SIGNAGE; REPLACED DAMAGED AWNING

PARKING LOT $15,000 PARKING LOT SURFACE UPGRADES; RESTRIPING

ELECTRIC $12,000 BREAKERS; PANELS; OUTLETS; SWITCHES

ROOF $50,000 REPAIRED ROOF LEAKS; FIXED ROOF CHANNEL

HVAC $22,000 REPAIRED SEVEN AC UNITS ; REPLACED HEATING UNITS

MISC. $10,000 REPAIRED DOCK DOORS; COMCAST INSTALL

TENANT BUILDOUT $160,000 FIREWALL; DOCK DOOR; FENCING; BATHROOMS; ETC.

2016-2017 CAPITAL IMPROVEMENTS $350,000+



AREA MAP - KEY DISTANCES PROPERTY OVERVIEW

TRANSIT

Hwy 278 0 Miles

East-West Connector 2 Miles

I-285 <3 Miles

I-20 <3 Miles

I-75 7 Miles

CITIES

Mableton 2 Miles

Austell 5 Miles

Vinings 5 Miles

Smyrna 5 Miles

Buckhead 7 Miles

Downtown Atlanta 9 Miles

Midtown Atlanta 9 Miles

ATTRACTIONS

Six Flags Over Georgia 3 Miles

Sweetwater Creek Park 6 Miles

Westside Provisions District 7 Miles

SunTrust Park 7 Miles

Atlantic Station 9 Miles

Mercedes Benz Stadium 9 Miles

Atlantic Station 9 Miles

Piedmont Park 9 Miles

SK INVESTMENT SALESATLANTA, GEORGIA

OFFERING MEMORANDUM281 VETERANS MEMORIAL HWY SE 16

AERIAL - TAX PARCEL PROPERTY OVERVIEW

8.07 ACRES8.07 ACRESPARCEL # 18004500080PARCEL # 18004500080



RIVER

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AERIAL - I-285/I-20 INTERCHANGE PROPERTY OVERVIEW

281 VETERANS MEMORIAL HWY SEMABLETON, GA 30126

VETERANS MEMORIAL HWY

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285

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FULTON IN

DUSTRIAL BLV

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NEW UPS MAJESTIC SHIPPING HUB

FULTON COUNTY AIRPORT

ATLANTA INDUSTRIAL PARK

WEST MIDTOWN

PROVIDENCE PAVILION

CHATTAHOOCHEE RIV

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PROPERTY OVERVIEWAERIAL - DOWNTOWN ATLANTA VIEW (EAST)

281 VETERANS MEMORIAL HWY SEMABLETON, GA 30126

VE

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ME

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278

PROVIDENCE PAVILION

LELAND VETINARY CLINIC

285 DOWNTOWN ATLANTA

VININGS

HEADQUARTERS



PROPERTY OVERVIEWRENDERINGS



PROPERTY OVERVIEWRENDERINGS



PROPERTY OVERVIEWZONING

281 Veterans Memorial Hwy SE is zoned OS (Office Services), but allows for additional Light Industrial (LI) uses from a successful 2016 zoning effort.

The OS district was established to provide locations for office and business distribution/service facilities, and certain assembly processes which are located entirely within an enclosed building and which do not involve manufacturing or fabrication of any product. Because the OS zoning district did not allow for warehousing or distribution, the facility was underutilized for several years. The owners were successful in their zoning efforts, leaving the OS designation, but adding in the following expressly allowed uses:

SOURCE: COBB COUNTY ZONING

• Pod storage• Accessory Retail Sales and Service• Warehouse, Showroom & Storage Facility• Logistics Facility• Assembly of Items• Automotive Parking Lots or Garages

• Corporate or Administrative Offices• Office Service and Supply Establishments• Parking for Vehicles• Wholesale Trade and Distribution Facilities• Wholesale Trade Offices in Conjunction with Office Showrooms



PROPERTY OVERVIEWAS-BUILT FLOOR PLANS


TENANT OVERVIEW• STACKING PLAN

• RENT ROLL

03



STACKING PLAN TENANT OVERVIEW

*DRAWING NOT TO SCALE

GO MINIS ATLSUITE 10021,000 SFEXP 10/21

GEORGIAGREENBOXSUITE 14010,000 SFEXP 10/19

FERGUSON ENTERPRISESSUITE 11055,000 SFEXP 08/18

FURNITURE LIQUIDATORS SUITE 15028,000 SFEXP 10/24

ATL RESTAURANT SUPPLYSUITE 12025,000 SFEXP 04/27

VACANTSUITE 20016,260 SF

2ND FLOOR OFFICE/SHOWROOM

ATL ROLLERGIRLSSUITE 13026,000 SFEXP 08/22



TENANT OVERVIEWRENT ROLL (As of October 25, 2017)

TENANT NAMETYPE & SUITE NUMBERLEASE DATES & TERM

RENTABLESF BLDGSHARE

RATE & AMTPER YEAR PER MONTH

CHANGESON

CHANGESTO

CPI & CURRENT PORTERS’ WAGE MISC.

MONTHSTOABATE

PCNTTOABATE

DESCRIPTION OF OPERATING EXPENSEREIMBURSEMENTS

IMPRVMNTSRATEAMOUNT

CMMSSNSRATEAMOUNT

ASSUMPTIONS ABTSUBSEQUENT TERMS OR THIS TENANT

GO MINIS ATLANTA $3.60 - - SEE METHOD: - - MARKET INDUSTRIAL, SUITE: 100 21,000 $75,600 GO MINIS WAREHOUSE NOV-2016 TO OCT-2021 11.59% $0.30 $3.60/SF NNN 60 MONTHS $6,300

FERGUSON ENTERPRISES $3.30 - - - - - NET: PAYS A FULL - - MARKET INDUSTRIAL, SUITE: 110 55,000 $181,500 PRO-RATA SHARE OF WAREHOUSE AUG-2017 TO NOV-2018 30.34% $0.27 ALL REIMBURSABLE $3.60/SF NNN 16 MONTHS $15,125 EXPENSES.

ATL RESTAURANT & SUPPLY $2.50 MAY-2018 $2.58 - - - NET: PAYS A FULL - - MARKET INDUSTRIAL, SUITE: 120 25,000 $62,500 MAY-2019 $2.65 PRO-RATA SHARE OF WAREHOUSE MAY-2017 TO APR-2027 13.79% $0.21 MAY-2020 $2.73 ALL REIMBURSABLE $3.60/SF NNN 120 MONTHS $5,208 MAY-2021 $2.81 EXPENSES. MAY-2022 $2.90 MAY-2023 $2.99 MAY-2024 $3.07 MAY-2025 $3.17 MAY-2026 $3.26

ATLANTA ROLLERGIRLS $2.65 AUG-2018 $2.73 - - - NET: PAYS A FULL MARKET INDUSTRIAL, SUITE: 130 26,000 $68,900 AUG-2019 $2.81 PRO-RATA SHARE OF WAREHOUSE MAY-2017 TO AUG-2022 14.34% $0.22 AUG-2020 $2.90 ALL REIMBURSABLE $3.60/SF NNN 64 MONTHS $5,742 AUG-2021 $2.98 EXPENSES.

AUG-2022 $3.07

GEORGIA GREENBOX $3.60 - - - - - FULL SERVICE: - - MARKET INDUSTRIAL, SUITE: 140 10,000 $36,000 PAYS NO EXPENSE WAREHOUSE SEP-2016 TO OCT-2019 5.52% $0.30 REIMBURSEMENT. $3.60/SF NNN 38 MONTHS $3,000

FURNITURE LIQUIDATORS $3.30 NOV-2018 $3.39 - - - NET: PAYS A FULL MARKET INDUSTRIAL, SUITE: 150 28,000 $92,400 NOV-2019 $3.48 PRO-RATA SHARE OF WAREHOUSE NOV-2017 TO OCT-2024 15.45% $0.27 NOV-2020 $3.58 ALL REIMBURSABLE $3.60/SF NNN 84 MONTHS $7,700 NOV-2021 $3.68 EXPENSES.

NOV-2022 $3.78

VACANT $3.71 DEC-2019 $3.82 - 1-3 100.00% NET: PAYS A FULL $0.77 $1.63 MARKET INDUSTRIAL, SUITE: 200 16,260 $60,292 DEC-2020 $3.93 PRO-RATA SHARE OF 8.67% WAREHOUSE DEC-2018 TO NOV-2023 8.97% $0.31 DEC-2021 $4.05 ALL REIMBURSABLE $12,561 $26,441 $3.60/SF NNN 60 MONTHS $5,024 DEC-2022 $4.17 EXPENSES.

TOTAL OCCUPIED SQFT 165,000 91.0% TOTAL AVAILABLE SQFT 16,260 9.0%

TOTAL PROPERTY SQFT 181,260 100.0%


MARKET OVERVIEW• CITY OF ATLANTA

• CITY OF ATLANTA - FORTUNE 1000 HEADQUARTERS

• ATLANTA INDUSTRIAL MARKET

• SE COBB/MARIETTA & I-20 WEST INDUSTRIAL SUBMARKETS

04



CITY OF ATLANTA

If present growth trends persist, Atlanta is on track to pass Miami, Washington

DC, and Philadelphia by 2025, moving from the ninth largest metropolitan

statistical area (MSA) in the country to the sixth largest MSA in the country

(2025 estimate of nearly 7.0 million people). From the 2000-2010, Census

period, Atlanta had the third-fastest growth of any major metropolitan area

in the United States, trailing only Houston and Dallas.

Atlanta’s population growth has corresponded with its economic growth,

with the city serving as the undeniable economic capital of the Southeastern

United States. According to the Atlanta Metro Chamber, Atlanta serves as

headquarters to 18 Fortune 500 and 29 Fortune 1000 companies. The low

cost of doing business, strong academic institutions, educated workforce,

and unmatched transportation infrastructure continues to lure headquarters

and regional headquarters to the area. For these reasons, Atlanta has become

a top destination for Millennials, and the city consistently ranks in national

publications as a one of the most desirable cities for Millennial relocation.

Millennials now comprise 25% of the MSA’s population.

The recession was harsh on Atlanta’s economy. During the downturn, Atlanta’s

unemployment rate doubled in a period of 20 months, from 5.3% in April

2008 to 10.6% in January 2010. Since the direst point in early 2010, the city

showed great resilience as its economy surged to life, with unemployment

dropping to 5.5% by October 2015 according to the Georgia Department of

Labor. Atlanta housing values displayed a similar bounceback, with median

home values now surpassing pre-recession figures, after what had been a

precipitous 40% dip from peak to trough (according to the Zillow Home

Value Index). Atlanta home values have climbed over 11% over the past year,

and predictions indicate that home values will rise around 5% during 2017.

Metropolitan Atlanta has shown unbridled growth over the past twenty years, nearly doubling its population to reach approximately 5.5 million people in 2010.

MARKET OVERVIEW

PROJECTED POPULATION IN LARGEST METRO AREAS BY 2020

1. NEW YORK 20.59

2. LOS ANGELES 13.86

3. CHICAGO 9.77

4. DALLAS 7.85

5. HOUSTON 7.30

6. MIAMI 6.61

7. WASHINGTON D.C. 6.44

8. ATLANTA 6.40

9. PHILADELPHIA 6.16

10. PHOENIX 5.17

SOURCE: MOODY’S ECONOMY.COM, SEPTEMBER 2015

ATLANTA METRO POPULATION & FORECAST: 1990-2040 (in millions)

SOURCE: ATLANTA REGIONAL COMMISSION 2017



MARKET OVERVIEWCITY OF ATLANTA - FORTUNE 1000 HEADQUARTERS



Consistently one of the strongest industrial markets in the nation, Atlanta

absorbed 18 million square feet of warehouse space in 2014, an all-time record

for the city. 2015 and 2016 showed no signs of slowing either, absorbing

another 26 million SF in 24 months. The ongoing development of both the

Port of Savannah and the Appalachian Regional Port, as well as the high

velocity of corporate relocations to Atlanta has the city’s industrial market

poised for increased demand in the years to come. The vacancy rate for

warehouse space came in at 7.0% at the end of Q1 2017, the lowest vacancy

rate since 2001. Concurrently, average industrial rental rates improved to all-

time highs. The shift to an e-commerce and logistics-based economy have

made Atlanta an especially attractive market, with its tremendous highway

system, access to the ports, and world-class airport luring businesses from

across the country and the world.

ATLANTA INDUSTRIAL MARKET

Atlanta boasts the third largest industrial market in the country, trailing only Dallas and the Inland Empire.

MARKET OVERVIEW



SE COBB/MARIETTA & I-20 WEST INDUSTRIAL SUBMARKETS MARKET OVERVIEW

SE COBB COUNTY / MARIETTA INDUSTRIAL SUBMARKET

SE Cobb/Marietta is among the largest warehouse submarkets in the city,

based on number of properties and total rentable square footage. SE

Cobb/Marietta has performed very well in recent years, capitalizing on its

adjacency to I-285 and I-75. Vacancy rates matched the metro area at 7.1%,

but quoted rental rates exceeded the city average by a substantial margin,

with gross asking rents north of $6.00/SF. These are impressive figures

for the massive submarket, which boasts nearly 12MM SF of light industrial

warehouse space across 502 properties.

I-20W / DOUGLASVILLE INDUSTRIAL SUBMARKET

I-20W/Douglasville is another major warehouse submarket in the city,

and has been one of the strongest performers in the past five years. Very

recently, the announcement of a major UPS airhub at Charlie Brown airport

(third largest in the country for UPS), has catalyzed the area in anticipation

of the thousands of jobs it will create. Proximity to I-20, I-285, and the

airport will continue to help this submarket in the future. Vacancy rates

outperformed the metro area by 100 bps, coming in at 6.0% at end of

Q1 2017. Gross asking rents crept up to $5.39/SF as supply and demand

parameters continue to favor existing properties. The submarket figures

for I-20W/Douglasville are similar to SE Cobb/Marietta, with just over

10MM SF of light industrial warehouse space across 574 properties.


FINANCIAL OVERVIEW• SUMMARY FINANCIAL ASSUMPTIONS

• CASH FLOW PROJECTIONS

• IN-PLACE INCOME RECONCILIATION

• SALES COMPS

05



FINANCIAL OVERVIEWSUMMARY OF FINANCIAL ASSUMPTIONS

GLOBAL

Analysis Period

Commencement Date December 1, 2017

End Date November 30, 2027

Term 10 Years

Area Measures

Building Square Footage (RSF) 181,260 SF

Consumer Price Index (CPI) 3.00%

Vacancy Loss [1] 5.00%

REVENUE ASSUMPTIONS

Market Rent Growth

2018 - 3.00% 2023 - 3.00%

2019 - 3.00% 2024 - 3.00%

2020 - 3.00% 2025 - 3.00%

2021 - 3.00% 2026 - 3.00%

2022 - 3.00% 2027 - 3.00%

EXPENSE ASSUMPTIONS

Growth Rates

Operating Expenses 2.00%

Capital Reserves 2.00%

Management Fee (% of EGR) 3.00%

Operating Expense Source [2] 2016 P&L/2017

Budget

Capital Reserves $0.10 PSF

MARKET LEASING - 2ND GENERATION

Retention Ratio 80%

Lease Term 63 Months

2018 Annual Market Rent

Warehouse $3.60 PSF

Rent Adjustment 3.00% Annually

Expense Recovery Type NNN

2018 Tenant Improvements

New $0.75 PSF

Renewal $0.25 PSF

Weighted Average $0.35 PSF

Commissions

New 150% First Month + 6.00%

Renewal 4.00%

Weighted Average 30% First Month + 4.40%

Downtime

New 6 Month(s)

Weighted Average [3] 1 Month(s)

Rent Abatement

New 3 Month(s)

Renewal 0 Month(s)

Weighted Average 1 Month(s)

GENERAL PROPERTY NOTES

[1] A vacancy loss of 5.00% has been assumed for this analysis; no tenants have been excluded.

[2] Operating Expenses are based on 2016 actual operating expenses/2017 budget. All expenses are expected to grow at 2.00% annually for the duration of

the holding period.

[3] The weighted average downtime has been rounded to the nearest whole month.

*Any outstanding rent abatements and/or tenant improvement allowances will be credited to purchaser at close on a pro-rated basis.

MARKET LEASING - VACANT LEASE-UP

Total Vacant

as of October 25, 2017 16,260 SF

Absorption Period 13 Month(s)

Lease Term 5 Years

2018 Annual Market Rent $3.60 PSF

Rent Adjustment 3.00% Annually

2018 Tenant Improvements $0.75 PSF

Commissions 150% First Month + 6.00%

Rent Abatement 3 Month(s)

FINANCIAL OVERVIEW



CASH FLOW PROJECTIONS FINANCIAL OVERVIEW

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

FY 2018

POTENTIAL GROSS REVENUE $/SF/YR

BASE RENTAL REVENUE $3.19 $577,431 $608,260 $624,511 $641,318 $673,292 $711,876 $733,688 $764,137 $786,619 $829,721 $870,012

ABSORPTION & TURNOVER VACANCY (0.32) (58,536) (20,085) 0 (6,884) (8,779) 0 (35,557) (3,690) 0 (18,006) (10,483)

BASE RENT ABATEMENTS 0.00 0 (25,270) (1,910) 0 (9,521) 0 (15,316) (8,413) 0 (10,803) (6,290)

SCHEDULED BASE RENTAL REVENUE 2.86 518,895 562,905 622,601 634,434 654,992 711,876 682,815 752,034 786,619 800,912 853,239

EXPENSE REIMBURSEMENT REVENUE 0.51 92,292 103,089 116,234 117,859 125,145 130,405 126,040 135,413 139,303 139,217 144,323

OTHER INCOME 0.03 6,000 6,180 6,365 6,556 6,753 6,956 7,164 7,379 7,601 7,829 8,063

TOTAL POTENTIAL GROSS REVENUE 3.40 617,187 672,174 745,200 758,849 786,890 849,237 816,019 894,826 933,523 947,958 1,005,625

GENERAL VACANCY 0.00 0 (9,065) (31,130) (25,182) (24,410) (35,594) (362) (34,096) (39,331) (22,940) (32,703)

EFFECTIVE GROSS REVENUE 3.40 617,187 663,109 714,070 733,667 762,480 813,643 815,657 860,730 894,192 925,018 972,922

OPERATING EXPENSESMANAGEMENT FEE (0.10) (18,516) (19,893) (21,422) (22,010) (22,874) (24,409) (24,470) (25,822) (26,826) (27,751) (29,188)

ADVERTISING (0.02) (3,000) (3,060) (3,121) (3,184) (3,247) (3,312) (3,378) (3,446) (3,515) (3,585) (3,657)

GENERAL & ADMIN (0.03) (5,000) (5,100) (5,202) (5,306) (5,412) (5,520) (5,631) (5,743) (5,858) (5,975) (6,095)

PHONE/INTERNET (0.02) (3,000) (3,060) (3,121) (3,184) (3,247) (3,312) (3,378) (3,446) (3,515) (3,585) (3,657)

LANDSCAPING (0.03) (5,000) (5,100) (5,202) (5,306) (5,412) (5,520) (5,631) (5,743) (5,858) (5,975) (6,095)

REPAIRS & MAINT (0.06) (10,000) (10,200) (10,404) (10,612) (10,824) (11,041) (11,262) (11,487) (11,717) (11,951) (12,190)

SECURITY/MONITORING (0.03) (6,000) (6,120) (6,242) (6,367) (6,495) (6,624) (6,757) (6,892) (7,030) (7,171) (7,314)

ELECTRICITY (0.05) (9,551) (10,048) (10,404) (10,561) (10,760) (11,041) (11,005) (11,460) (11,717) (11,825) (12,117)

WATER (0.02) (3,821) (4,019) (4,162) (4,224) (4,304) (4,416) (4,402) (4,584) (4,687) (4,730) (4,847)

GAS (0.01) (1,910) (2,010) (2,081) (2,112) (2,152) (2,208) (2,201) (2,292) (2,343) (2,365) (2,423)

TRASH REMOVAL (0.02) (3,821) (4,019) (4,162) (4,224) (4,304) (4,416) (4,402) (4,584) (4,687) (4,730) (4,847)

INSURANCE (0.07) (13,000) (13,260) (13,525) (13,796) (14,072) (14,353) (14,640) (14,933) (15,232) (15,536) (15,847)

RE TAXES (0.16) (29,000) (29,580) (30,172) (30,775) (31,391) (32,018) (32,659) (33,312) (33,978) (34,658) (35,351)

MISCELLANEOUS (0.01) (2,000) (2,040) (2,081) (2,122) (2,165) (2,208) (2,252) (2,297) (2,343) (2,390) (2,438)

TOTAL OPERATING EXPENSES (0.63) (113,619) (117,509) (121,301) (123,783) (126,659) (130,398) (132,068) (136,041) (139,306) (142,227) (146,066)

NET OPERATING INCOME 2.78 503,568 545,600 592,769 609,884 635,821 683,245 683,589 724,689 754,886 782,791 826,856

LEASING AND CAPITAL COSTSTENANT IMPROVEMENTS 0.00 0 (32,389) (3,713) 0 (18,514) 0 (29,781) (16,358) 0 (21,007) (12,230)LEASING COMMISSIONS 0.00 0 (81,577) (10,325) 0 (51,485) 0 (82,814) (45,486) 0 (58,416) (34,008)

CAPITAL RESERVE (0.10) (18,126) (18,670) (19,230) (19,807) (20,401) (21,013) (21,643) (22,293) (22,961) (23,650) (24,360)

TOTAL LEASING AND CAPITAL COSTS (0.10) (18,126) (132,636) (33,268) (19,807) (90,400) (21,013) (134,238) (84,137) (22,961) (103,073) (70,598)

OPERATING CASH FLOW 2.68 485,442 412,964 559,501 590,077 545,421 662,232 549,351 640,552 731,925 679,718 756,258



TENANTSQUARE

FEET

LEASE

COMMENCEMENT

LEASE

TERMINATION

2018

BASE RENT PSF

2018

BASE RENT

2018 OPEX

RECOVERIES

2018

GROSS RENT

GO MINIS ATLANTA 21,000 11/16 10/21 $3.60 $75,600 $8,299 $83,899

FERGUSON ENTERPRISES 55,000 8/17 11/18* $3.30 $181,500 $34,475 $215,975

ATL RESTAURANT & SUPPLY 25,000 5/17 4/27 $2.54 $63,594 $15,672 $79,266

ATLANTA ROLLERGIRLS 26,000 5/17 8/22 $2.68 $69,589 $16,297 $85,886

GEORGIA GREENBOX 10,000 9/16 10/19 $3.60 $36,000 $0 $36,000

FURNITURE LIQUIDATORS 28,000 11/17 10/24 $3.31 $92,612 $17,549 $110,161

165,000 $518,895 $92,292 $611,187

VACANT 16,260 OTHER INCOME $6,000

TOTAL SQUARE FOOTAGE 181,260 EFFECTIVE GROSS INCOME $617,187

EXPENSES

MANAGEMENT FEE (18,516)

ADVERTISING (3,000)

GENERAL & ADMIN (5,000)

PHONE/INTERNET (3,000)

LANDSCAPING (5,000)

REPAIRS & MAINT (10,000)

SECURITY/MONITORING (6,000)

ELECTRICITY (9,551)

WATER (3,821)

GAS (1,910)

TRASH REMOVAL (3,821)

INSURANCE (13,000)

RE TAXES (29,000)

MISCELLANEOUS (2,000)

TOTAL EXPENSES ($113,619)

NET OPERATING INCOME $503,568

IN-PLACE INCOME RECONCILIATION FINANCIAL OVERVIEW

*FERGUSON ENTERPRISES EXP 08/18. IN-PLACE ASSUMES EXTENSION TO 11/18 AT EXISTING TERMS



BUILDING NAME ADDRESS CITY SALE DATE SALE PRICE RENTABLE SF SALE PRICE/SF INVESTMENT/OWNER-USER

ACREAGE DOCKS CEILING HEIGHT

YEAR BUILT

DISCOVERY INDUSTRIAL PARK

6925 DISCOVERY BLVD SE

MABLETON 9/28/17 $3,075,000 54,080 $56.86 INVESTMENT 4.39 8 22’ 2000

5345 BUFORD 5345 BUFORD HWY NORCROSS 8/24/17 $4,350,000 78,200 $55.63 OWNER-USER 4.88 12 22’ 1984

6945 NORTHEAST 6945 NORTHEAST EXPY

DORAVILLE 6/19/17 $6,250,000 163,000 $38.34 INVESTMENT 8.75 15 23’-30’ 1980

ATLANTA WEST DISTRIBUTION BLDG 23

6255 BOAT ROCK BLVD

ATLANTA 6/1/17 $6,500,000 179,501 $36.21 OWNER-USER 13.30 40 24’ 1986


6160 PURDUE DR ATLANTA 5/10/17 $2,710,000 96,800 $28.00 OWNER-USER 4.72 17 22’ 1979

6840 BARTON 6840 BARTON RD MORROW 3/28/17 $2,818,000 80,022 $35.22 OWNER-USER 5.82 10 24' 1978

WESTPARK 4300 WESTPARK DR SW

ATLANTA 3/22/17 $6,500,000 216,074 $30.08 INVESTMENT 10.09 28 24' 1980

SALES COMPS FINANCIAL OVERVIEW



BUILDING NAME ADDRESS CITY SALE DATE SALE PRICE RENTABLE SF SALE PRICE/SF INVESTMENT/OWNER-USER

ACREAGE DOCKS CEILING HEIGHT

YEAR BUILT

RIVERSIDE 7900 TROON CIR AUSTELL 1/27/17 $9,400,000 160,000 $58.75 INVESTMENT 14.09 34 32’ 1997

NORCROSS 85BLDG 6395

6395 MCDONOUGH DR

NORCROSS 1/27/17 $4,700,000 110,356 $42.59 INVESTMENT 5.15 17 22' 1976

SWEETWATER INDUSTRIAL PARK

3255 S SWEETWATER RD

LITHIA SPRINGS 12/29/16 $3,623,000 150,934 $24.00 OWNER-USER 13.06 24 24'-28' 1988


6170 DUQUESNE DR ATLANTA 9/16/16 $2,678,000 105,600 $25.36 OWNER-USER 4.93 19 22’ 1985

ATLANTA WEST 16 6095 FULTON INDUSTRIAL BLVD

ATLANTA 6/3/16 $6,600,000 180,281 $36.61 INVESTMENT 6.97 16 22' 1982

SOUTHERN ROAD LOGISTICS CENTER

1040 SOUTHERN RD

MORROW 1/4/16 $7,120,000 209,780 $33.94 INVESTMENT 10.36 35 28’ 1979

AVERAGE

SUBJECT

$5,102,000

TBD

137,279

181,260

$37.16

TBD

N/A

TBD

8.19

8.07

21

26

24'

32’

1984

1998/2003

SALES COMPS FINANCIAL OVERVIEW

PARAMETERS:

1) PROPERTY TYPE: INDUSTRIAL (WH OR DIST)2) SALE DATE: 01/01/2016 – PRESENT

7) DOCK DOORS: 8 MIN; 40 MAX8) SPRINKLER – YES

3) LOCATION: OUTSIDE I-285; < 3 MI TO MAJOR HWY4) RSF: 50,000 – 250,000

5) ACREAGE: 4.00-15.006) CEILING HEIGHT: 22’ MINIMUM



SK Commercial Realty LLC is hereby defined as “Broker.” The information contained herein is considered to be confidential and is being provided solely for the purpose of review by prospective purchasers or brokers/consultants representing prospective purchasers (“Recipient”) of the Property described herein. All materials are proprietary, confidential, and the sole possession of the Seller. Any distribution, in whole or in part, of any of the contained information to a party other than the party receiving it directly from Broker is strictly prohibited.

The information contained in this Offering Memorandum (OM) is provided solely to facilitate the prospective purchaser’s own due diligence, for which it shall be fully and solely responsible. The OM is not meant to serve as a substitute for Recipient’s performance of a thorough analysis and “due diligence” investigation of all components of said Property, including but not limited to financial performance, loan details, market conditions, compliance with state and federal laws and regulations, or Property’s physical condition.

The materials contained herein are based on information and sources that are deemed reliable, but no representation or warranty, expressed or implied, is being made by Broker or Seller or any of their respective representatives, affiliates, officers, employees, partners, etc. as to the accuracy or completeness of said information. Seller reserves the right at its sole and absolute discretion, to withdraw the Property from being marketed for sale at any time and for any reason. Seller and Broker each

expressly reserves the right, at their sole and absolute discretion, to reject any and all expressions of interest or offers regarding the Property and/or to terminate discussions with any entity at any time, with or without notice. This offering is made subject to omissions, corrections of errors, change of price or other terms, prior to sale or withdrawal from the market without notice.

Seller shall have no legal obligation or commitment of any kind to any Recipient in performing additional investigations and/or making an offer to purchase the Property, unless and until a binding written agreement for the purchase of the Property has been fully executed, delivered, and approved by the Seller. Recipient of this Offering Memorandum agrees: (a) the enclosed information is highly confidential and will be held and treated in the strictest of confidence and any physical copy of the OM shall be returned to Broker or Seller promptly upon request; (b) not to contact employees or tenants of the Property directly or indirectly regarding any aspect of this information without the prior written approval of the Broker or Seller; and (c) no portion of the enclosed information may be copied or otherwise reproduced without the prior written authorization of Broker or Seller.

INFORMATION NOT WARRANTED

FOR MORE INFORMATION PLEASE CONTACT:

SK Commercial Realty is a registered trademark of SK Commercial Realty LLC. All other trademarks belong to their respective companies.

*Broker and Salespersons are affiliated with the ownership entity.

SPENCER COAN, CAIA, CCIMSK Commercial RealtySenior Vice President – Investments404.252.1200 (Office)502.500.6084 (Mobile)[email protected]

JARED BARNETT, ESQSK Commercial RealtyVice President – Investments404.252.1200 (Office)404.606.3420 (Mobile)[email protected]

281 VETERANS MEMORIAL HWY SE

Documents

281 VETERANS MEMORIAL HIGHWAY SE - SK Commercial Realty · SK COMMERCIAL REALTY ATLANTA, GEORGIA OFFERING MEMORANDUM 281 VETERANS MEMORIAL HIGHWAY SE 7 DEMOGRAPHICS EXECUTIVE SUMMARY