Post on 19-Aug-2020
OFFERING MEMORANDUM
281 VETERANS MEMORIAL HIGHWAY SEMABLETON, GA 30126
SPENCER COAN, CAIA, CCIMSVP - INVESTMENTS404-252-1200502-500-6084SCOAN@SKCR.COM
JARED BARNETT, ESQ.VP - INVESTMENTS404-252-1200404-606-3420JBARNETT@SKCR.COM
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: 502.500.6084scoan@skcr.com
JARED BARNETT, ESQVice President – InvestmentsO: 404.252.1200C: 404.606.3420jbarnett@skcr.com
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 6
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 7
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 8
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 9
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 12
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)
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 13
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 14
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+
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 15
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 17
RIVER
VIE
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D
AERIAL - I-285/I-20 INTERCHANGE PROPERTY OVERVIEW
281 VETERANS MEMORIAL HWY SEMABLETON, GA 30126
VETERANS MEMORIAL HWY
20
285
285
20
DISCOVERY B
LVD
LEE INDUSTRIA
L BLV
D
OAKDA
LE R
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FULTON IN
DUSTRIAL BLV
D
MA
BLETO
N PKW
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NEW UPS MAJESTIC SHIPPING HUB
FULTON COUNTY AIRPORT
ATLANTA INDUSTRIAL PARK
WEST MIDTOWN
PROVIDENCE PAVILION
CHATTAHOOCHEE RIV
ER
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 18
PROPERTY OVERVIEWAERIAL - DOWNTOWN ATLANTA VIEW (EAST)
281 VETERANS MEMORIAL HWY SEMABLETON, GA 30126
VE
TE
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ME
MO
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L H
WY
278
PROVIDENCE PAVILION
LELAND VETINARY CLINIC
285 DOWNTOWN ATLANTA
VININGS
HEADQUARTERS
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 19
PROPERTY OVERVIEWRENDERINGS
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 20
PROPERTY OVERVIEWRENDERINGS
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 21
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 22
PROPERTY OVERVIEWAS-BUILT FLOOR PLANS
281 VETERANS MEMORIAL HIGHWAY SE
TENANT OVERVIEW• STACKING PLAN
• RENT ROLL
03
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 25
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 26
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%
281 VETERANS MEMORIAL HIGHWAY SE
MARKET OVERVIEW• CITY OF ATLANTA
• CITY OF ATLANTA - FORTUNE 1000 HEADQUARTERS
• ATLANTA INDUSTRIAL MARKET
• SE COBB/MARIETTA & I-20 WEST INDUSTRIAL SUBMARKETS
04
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 29
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 30
MARKET OVERVIEWCITY OF ATLANTA - FORTUNE 1000 HEADQUARTERS
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 31
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 32
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.
281 VETERANS MEMORIAL HIGHWAY SE
FINANCIAL OVERVIEW• SUMMARY FINANCIAL ASSUMPTIONS
• CASH FLOW PROJECTIONS
• IN-PLACE INCOME RECONCILIATION
• SALES COMPS
05
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 35
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 36
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 37
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 38
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
ATLANTA WEST DISTRIBUTION BLDG 6
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
SK COMMERCIAL REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 39
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
ATLANTA WEST DISTRIBUTION BLDG 11
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 REALTYATLANTA, GEORGIA
OFFERING MEMORANDUM281 VETERANS MEMORIAL HIGHWAY SE 41
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)scoan@skcr.com
JARED BARNETT, ESQSK Commercial RealtyVice President – Investments404.252.1200 (Office)404.606.3420 (Mobile)jbarnett@skcr.com
281 VETERANS MEMORIAL HWY SE