281 VETERANS MEMORIAL HIGHWAY SE...SK COMMERCIAL REALTY ATLANTA, GEORGIA OFFERING MEMORANDUM 281...

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 nearly 30,000 vehicles per day. Situated on 8.07 acres (with an additional

1.49 acre parcel) 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 two years,

leaving little to no deferred maintenance for the next owner. The building features a

wet sprinkler system, 32’ ceiling heights, a new high-bay LED retrofit, 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, upside potential, and pricing at a fraction of replacement cost

make 281 VM a compelling opportunity for investors.

INVESTMENT SALES TEAM

01 EXECUTIVE SUMMARY

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

02 PROPERTY OVERVIEW

Property Information Additional Land Parcel - 301 VM 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 developing corridor of Atlanta.

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

property leased to five proven tenants. Few comparable properties

share 281 VM’s high visibility and strong demographics (Smyrna,

Mableton, and Vinings), as well as its close proximity to interstate

highways and major thoroughfares. The constrained industrial

market and limited land for future industrial development in the

immediate vicinity make 281 VM a unique investment opportunity

at an attractive basis.

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 Acres

OCCUPANCY: 91.03%

IN-PLACE NOI: $487,776

PROJECTED Y1 NOI: $506,008

STABILIZED Y2 NOI: $580,820

ADDITIONAL LAND: 1.496 Acres (Zoned NRC)



INVESTMENT HIGHLIGHTS

STRONG MARKET DYNAMICS – As one of the most robust industrial markets in the nation, Atlanta currently boasts an industrial vacancy of 6.0%, the lowest since 2001. Among Atlanta’s submarkets, the SE Cobb and I-20 West submarkets have been two of the strongest submarkets in recent years. While one of the largest industrial submarkets in the metro area, SE Cobb saw its vacancy rate fall to 4.1%, with gross asking rents at $7.60/SF, significantly outpacing Atlanta’s average. The I-20 West submarket has also enjoyed success in recent years, with gross asking rents at nearly $4.50/SF. Additionally, 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 UPS’ 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 investors. 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 $117,053, more than double the national average. This strength is further reflected in the area’s median home values, which exceed $275,000. Population growth within a five mile radius is estimated at over 6% between 2010-present day, bringing the population to more than 167,000 people. There is still significant growth occurring, with estimates suggesting that an additional 10,000+ people will move to the area by 2023.

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 2023 Projection 6,761 59,190 178,133

Population 2018 Estimate 6,392 55,748 167,475

Population 2010 Census 6,009 51,083 151,373

2018-2023 Population Growth % 5.77% 6.17% 6.36%

2010-2023 Population Growth % 12.51% 15.87% 17.68%

Households 2023 Projection 2,470 22,062 69,963

Households 2018 Estimate 2,333 20,780 65,805

Households 2010 Census 2,187 19,069 59,723

2018-2023 Household Growth % 5.87% 6.17% 6.32%

2010-2023 Household Growth % 12.94% 15.70% 17.15%

2018 Average Household Income $117,053 $92,544 $85,376

2018 Median Household Income $87,730 $69,867 $62,036

2018 Median Home Value $278,911 $230,071 $203,134



EXISTING LEASE EXPIRATIONS EXECUTIVE SUMMARY

[1] BASED ON 181,260 SQUARE FEET.

75,000

RE

NTA

BL

E S

QU

AR

E F

EE

T

50,000

25,000

2022

FISCALYEAR

NUMBEROF SUITES

RENTABLESQUARE FEET

EXPIRING ANNUAL [1] CUMULATIVE [1]

2020 0 0 0.00% 0.00%

2021 1 12,000 6.62% 6.62%

2022 1 21,000 11.59% 18.21%

2023 1 26,000 14.34% 32.55%

2024 0 0 0.00% 32.55%

2025 1 81,000 44.69% 77.24%

2026 0 0 0.00% 77.24%

BEYOND 1 25,000 13.79% 91.03%

SUBTOTAL 5 165,000 91.03% 91.03%

VACANT 1 16,260 8.97% 100.00%

TOTAL 6 181,260 100.00% 100.00%

2020 2021 BEYOND2023 2024 2025 2026



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

• ADDITIONAL LAND PARCEL - 301 VM

• DESIGN AND CONSTRUCTION

• CAPITAL IMPROVEMENTS

• AREA MAPS

• AERIAL PHOTOGRAPHS

• RENDERINGS

• ZONING

• AS-BUILT FLOOR PLANS

02



PROPERTY INFORMATION PROPERTY OVERVIEW

BUILDING 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)



ADDITIONAL LAND PARCEL - 301 VM PROPERTY OVERVIEW

ADDRESS:301 Veterans Memorial Hwy SE

Mableton, Georgia 30126

ACREAGE: 1.496 Acres

COUNTY: Cobb

SITE CONDITION GRADED & CLEARED

ZONING: NRC (Cobb County)

TAX ID/PARCEL ID: 18-0045-0-0080

2014 APPRAISED VALUE: $270,000

NRC ZONING (NEIGHBORHOOD RETAIL COMMERCIAL)

“The NRC district is established to provide locations for convenience

shopping facilities...that have a neighborhood-oriented market and

which supply necessities that usually require frequent purchasing with

a minimum of consumer travel.”

Selected Permitted Uses:

• Banks/Financial Institutions

• Convenience Stores w/ Fuel

• Fast Food

• Climate-Controlled Self Storage

• Parking for Vehicles

• Daycare Establishments

• Dry Cleaning

• Self Service Fuel Stations

• Full Service Fuel Stations

• Light Auto Repair

• Communication Towers

• Professional Offices

• Neighborhood Retail Uses



ADDITIONAL LAND PARCEL - 301 VM PROPERTY OVERVIEW



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/showroom; Warehouse features abundant skylights throughout, and older metal halide fixtures have been retrofitted with sensor-controlled, energy-efficient LED fixtures.

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

SIGNAGE:Double-sided, 12’ aluminum post and panel monument sign



CAPITAL IMPROVEMENTS PROPERTY OVERVIEW

281 Veterans Memorial Hwy SE has undergone significant capital improvements over the last two years, totaling more than $430,000.

CATEGORY APPROX. COST DESCRIPTION

FENCING $3,000 REPAIRED PRIVACY FENCE ALONG WESTERN BORDER

LANDSCAPING $32,000 CLEANED DETENTION POND; REMOVED/REPLACED DEAD

DUMPSTER ENCLOSURE $5,000 DUMPSTER ENCLOSURE

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

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

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

ELECTRIC $35,000 HIGH-BAY LED RETROFIT; BREAKERS; PANELS; OUTLETS;

ROOF $60,000 REPAIRED ROOF LEAKS; FIXED ROOF CHANNEL

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

DOCKS $12,000 REPAIRED DOCK DOORS

TENANT BUILDOUT $200,000 FIREWALL; DOCK DOOR; FENCING; BATHROOMS; ETC.

MISC. $3,000 NEW MAILBOX; COMCAST FIBER INSTALL

2016-2018 CAPITAL IMPROVEMENTS $430,000+



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

Riverview Landing 2 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



AERIAL - TAX PARCEL

8.07 ACRES8.07 ACRESPARCEL # 18004500080PARCEL # 18004500080

1.49 ACRES1.49 ACRES

PARCEL # 18004500040PARCEL # 18004500040

PROPERTY OVERVIEW



RIVER

VIE

W R

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

D

FULTON IN

DUSTRIAL BLV

D

MA

BLETO

N PKW

Y

NEW UPS MAJESTIC SHIPPING HUB

FULTON COUNTY AIRPORT

ATLANTA INDUSTRIAL PARK

WEST MIDTOWN

PROVIDENCE PAVILION

CHATTAHOOCHEE RIV

ER



AERIAL - DOWNTOWN ATLANTA VIEW (EAST)

281 VETERANS MEMORIAL HWY SEMABLETON, GA 30126

VE

TE

RA

NS

ME

MO

RIA

L H

WY

278

PROVIDENCE PAVILION

LELAND VETINARY CLINIC

285 DOWNTOWN ATLANTA

VININGS

HEADQUARTERS

PROPERTY OVERVIEW



RENDERINGS PROPERTY OVERVIEW



ZONING

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 OVERVIEW



AS-BUILT FLOOR PLANS PROPERTY OVERVIEW


TENANT OVERVIEW• STACKING PLAN

• RENT ROLL

03



STACKING PLAN

*DRAWING NOT TO SCALE

TENANT OVERVIEW

ATL RESTAURANT SUPPLYSuite 12025,000 SFExp 04/27

VACANTSuite 20016,260 SF

FURNITURE LIQUIDATORS SUITE 15081,000 SFEXP 12/24

NEW TENANTSUITE 11012,000 SFEXP 03/21

ATL ROLLERGIRLSSUITE 13026,000 SFEXP 11/22



RENT ROLL (As of April 1, 2019)

TENANT NAMETYPE & SUITE NUMBERLEASE DATES & TERM

RENTABLESF BLDGSHARE

RATE & AMTPER YEAR PER

MONTH

CHANGESON

CHANGESTO

DESCRIPTION OF OPERATING

EXPENSE

IMPRVMNTSRATE

AMOUNT

CMMSSNSRATE

AMOUNT

ASSUMPTIONS ABT SUBSEQUENT TERMS

FOR THIS TENANT

1. GO MINIS ATLANTA 21,000. $3.60 - - GO MINIS - - MARKET - 80.00 %SUITE: 100 11.59% $75,60011/1/2016 - 10/31/2021 $0.305 YEARS $6,300FREEHOLD $75,600

2. ATL RESTAURANT & SUPPLY 25,000. $2.58 MAY-2019 $2.66 NET - - MARKET - 80.00 %SUITE: 120 13.79% $64,500 MAY-2020 $2.745/1/2017 - 4/30/2027 $0.22 MAY-2021 $2.8210 YEARS $5,375 MAY-2022 $2.90FREEHOLD $90,000 MAY-2023 $2.99

MAY-2024 $3.08MAY-2025 $3.17MAY-2026 $3.27

3. ATLANTA ROLLERGIRLS 26,000. $2.73 AUG-2019 $2.81 NET - - MARKET - 80.00 %SUITE: 130 14.34% $70,980 AUG-2020 $2.905/1/2017 - 11/30/2022 $0.23 AUG-2021 $2.985 YEARS 7 MONTHS $5,915FREEHOLD $93,600

4. FURNITURE LIQUIDATORS OF GA 81,000. $3.00 JAN-2020 $3.06 NET - - MARKET - 80.00 %SUITE: 150 44.69% $243,000 JAN-2021 $3.1211/1/2017 - 10/31/2024 $0.25 JAN-2022 $3.187 YEARS, 2 MONTHS $20,250 JAN-2023 $3.25FREEHOLD $244,800 JAN-2024 $3.31

5. NEW TENANT 12,000. $3.60 APR-2020 $3.71 NET - - MARKET - 80.00 %SUITE: 110 6.62% $43,2004/1/2019 - 3/31/2021 $0.30

2 YEARS $3,600FREEHOLD $43,200

6. VACANT 16,260. $3.82 NOV-2021 $3.93 NET $0.80 $1.67 MARKET - 80.00 %SUITE: 200 8.97% $62,101 NOV-2022 $4.05 $12,938 $27,23411/1/2020 - 10/31/2025 $0.32 NOV-2023 $4.17

5 YEARS $5,175 NOV-2024 $4.30

FREEHOLD $62,101

TOTAL OCCUPIED SQFT 165,000 91.03%

TOTAL AVAILABLE SQFT 16,260 8.97%

TOTAL PROPERTY SQFT 181,260 100.00%

TENANT OVERVIEW


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 14.8% over the past year,

and predictions indicate that they will rise around 7.6% this year.

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. The three subsequent years showed no signs of slowing either,

absorbing another 46 million SF in 36 months. The ongoing development

of both the Port of Savannah and the Appalachian Regional Port, the high

velocity of corporate relocations to Atlanta, and additions to Hartsfield-

Jackson International Airport have the city’s industrial market poised for

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

space came in at 6.1% near the end of Q2 2018, with asking industrial rental

rates at $5.55/SF accross the metro area. 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



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

proximity to I-285 and I-75. Warehouse vacancy rates for Q3 of 2018 came

in at 4.1%, about 2.9% below the city average, and gross asking rents were

north of $7.00/SF, with over 220,000 SF of net absorption.

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 came in at

8.3% at end of Q3 2018, as overall average rent was almost $4.50/SF. The

submarket figures for I-20W/Douglasville continue to exhibit hundreds

of thousands of square feet in positive net absorption each quarter, with

nearly 2.5 million square feet in year-to-date net absorption by the end of

Q3 2018.

SE COBB/MARIETTA & I-20 WEST INDUSTRIAL SUBMARKETS


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 April 1, 2019

End Date March 31, 2028

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

2020 - 3.00% 2025 - 3.00%

2021 - 3.00% 2026 - 3.00%

2022 - 3.00% 2027 - 3.00%

2023 - 3.00% 2028 - 3.00%

2024 - 3.00% 2029 - 3.00%

EXPENSE ASSUMPTIONS

Growth Rates

Operating Expenses 2.00%

Capital Reserves 2.00%

Management Fee (% of EGR) 3.00%

Operating Expense Source [2] 2018 P&L/

2019 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 2018 actual operating expenses/2019 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 April 1, 2019 16,260 SF

Absorption Period 24 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

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

FY 2020

POTENTIAL GROSS REVENUE $/SF/YR

POTENTIAL BASE RENT 3.18 575,548 590,870 608,712 636,218 667,705 697,169 739,589 761,777 812,841 839,312

ABSORPTION & TURNOVER VACANCY (0.32) (58,536) (60,292) (10,503) (8,523) 0 (28,170) 0 (18,175) (19,382) 0

FREE RENT 0.00 0 0 (21,827) (5,114) 0 (16,902) 0 (10,905) (5,700) (6,106)

SCHEDULED BASE RENT 2.85 517,012 530,578 576,382 622,580 667,705 652,097 739,589 732,697 787,758 833,206

TOTAL RENTAL REVENUE 2.85 517,012 530,578 576,382 622,580 667,705 652,097 739,589 732,697 787,758 833,206

EXPENSE REIMBURSEMENT REVENUE 0.61 111,204 113,520 130,211 137,257 142,577 139,460 149,661 148,755 152,778 160,249

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

TOTAL POTENTIAL GROSS REVENUE 3.50 634,216 650,279 712,958 766,394 817,035 798,512 896,414 888,831 948,138 1,001,283

GENERAL VACANCY 0.00 0 0 (18,841) (23,032) (33,385) (5,843) (36,979) (19,369) (20,975) (41,660)

EFFECTIVE GROSS REVENUE 3.50 634,216 650,279 694,117 743,362 783,650 792,669 859,435 869,462 927,162 959,623

OPERATING EXPENSESMANAGEMENT FEE (0.10) (19,026) (19,508) (20,823) (22,301) (23,509) (23,780) (25,783) (26,084) (27,815) (28,789)GENERAL & ADMIN (0.01) (2,000) (2,040) (2,081) (2,122) (2,165) (2,208) (2,252) (2,297) (2,343) (2,390)

LANDSCAPING (0.05) (9,000) (9,180) (9,364) (9,551) (9,742) (9,937) (10,135) (10,338) (10,545) (10,756)

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

ELECTRICITY (0.12) (21,507) (21,937) (22,802) (23,277) (23,814) (24,064) (24,776) (25,128) (25,625) (26,292)

WATER (0.01) (1,466) (1,496) (1,555) (1,587) (1,624) (1,641) (1,689) (1,713) (1,747) (1,793)

GAS (0.05) (9,776) (9,971) (10,365) (10,580) (10,824) (10,938) (11,262) (11,422) (11,648) (11,951)

TRASH REMOVAL (0.02) (2,933) (2,991) (3,109) (3,174) (3,247) (3,281) (3,378) (3,427) (3,494) (3,585)

INSURANCE (0.08) (15,000) (15,300) (15,606) (15,918) (16,236) (16,561) (16,892) (17,230) (17,575) (17,926)

RE TAXES (0.18) (32,500) (33,150) (33,813) (34,489) (35,179) (35,883) (36,600) (37,332) (38,079) (38,841)

MISCELLANEOUS (0.03) (5,000) (5,100) (5,202) (5,306) (5,412) (5,520) (5,631) (5,743) (5,858) (5,975)

TOTAL OPERATING EXPENSES (0.71) (128,208) (130,873) (135,123) (138,918) (142,577) (144,854) (149,661) (152,202) (156,447) (160,249)

NET OPERATING INCOME 2.79 506,008 519,405 558,993 604,444 641,073 647,815 709,774 717,261 770,715 799,374

LEASING AND CAPITAL COSTSTENANT IMPROVEMENTS 0.00 0 0 (25,191) (9,944) 0 (32,865) 0 (21,204) (11,084) (11,873)LEASING COMMISSIONS 0.00 0 0 (61,308) (27,652) 0 (91,392) 0 (58,964) (30,823) (33,017)

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

TOTAL LEASING AND CAPITAL COSTS (0.10) (18,126) (18,670) (105,729) (57,402) (20,401) (145,270) (21,643) (102,461) (64,869) (68,541)

CASH FLOW BEFORE DEBT SERVICE 2.69 487,882 500,735 453,264 547,042 620,672 502,545 688,131 614,799 705,847 730,833



TENANTSQUARE

FEET

LEASE

COMMENCEMENT

LEASE

TERMINATION

2019

BASE RENT PSF

2019

BASE RENT

2019 OPEX

RECOVERIES

2019

GROSS RENT

GO MINIS ATLANTA 21,000 11/16 10/21 $3.60 $75,600 $9,242 $84,842

ATL RESTAURANT & SUPPLY 25,000 5/17 4/27 $2.54 $65,468 $17,554 $83,022

ATLANTA ROLLERGIRLS 26,000 5/17 11/22 $2.68 $71,512 $18,256 $89,769

FURNITURE LIQUIDATORS 81,000 11/17 12/24 $3.00 $243,000 $56,875 $ 299,875

NEW TENANT 12,000 4/19 3/21 $3.60 $43,200 $9,277 $ 52,477

165,000 $498,780 $111,204 $609,984

VACANT 16,260 OTHER INCOME $6,000

TOTAL SQUARE FOOTAGE 181,260 EFFECTIVE GROSS INCOME $615,984

EXPENSES

MANAGEMENT FEE (19,026)

GENERAL & ADMIN (2,000)

LANDSCAPING (9,000)

REPAIRS & MAINT (10,000)

ELECTRICITY (21,507)

WATER (1,466)

GAS (9,776)

TRASH REMOVAL (2,933)

INSURANCE (15,000)

RE TAXES (32,500)

MISCELLANEOUS (5,000)

TOTAL EXPENSES ($128,208)

NET OPERATING INCOME $487,776

IN-PLACE INCOME RECONCILIATION FINANCIAL OVERVIEW



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

ACREAGE DOCKS CEILING HEIGHT

YEAR BUILT

ATLANTA GATEWAY

5255 FULTON INDUSTRIAL BLVD SW

ATLANTA 7/27/18 $3,362,800 100,380 $33.50 OWNER/USER 4.59 24 24’ 1973

ATLANTA FULTONINDUSTRIAL

575 WHARTON DR SW

ATLANTA 6/22/18 $4,150,000 100,080 $41.47 INVESTMENT 6.78 12 22’ 1978

1775 HILLCREST 1775 HILLCREST RD NORCROSS 12/18/17 $5,650,000 124,555 $45.36 INVESTMENT 10.06 12 24’-40’ 2000

5125 FULTON INDUSTRIAL

5125 FULTON INDUSTRIAL BLVD SW


4600 FRONTAGE 4600 FRONTAGE RD

FOREST PARKV 11/10/17 $3,428,571 103,829 $33.02 OWNER/USER 5.20 8 22’ 1960

BAY COLONY BUSINESS PARK

6610 BAY CIR NORCROSS 10/20/17 $3,925,000 86,400 $45.43 INVESTMENT 5.27 24 22’ 1984

ATLANTA FULTON INDUSTRIAL

5201 PHILLIP LEE DR SW


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

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


WESTPARK 4300 WESTPARK DR SW

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

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

AVERAGE

SUBJECT

$5,138,489

TBD

135,814

181,260

$38.28

TBD

N/A

TBD

7.95

8.07

21

26

25’

32’

1980

1998/2003

SALES COMPS FINANCIAL OVERVIEW

PARAMETERS:

1) PROPERTY TYPE: INDUSTRIAL (WH OR DIST)2) SALE DATE: 01/01/2017 – PRESENT

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

3) LOCATION: OUTSIDE I-285; < 3 MI TO MAJOR HWY4) RSF: 80,000 – 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]

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