offering memorandum - ackerman & co.€¦ · 3080 premiere parkway 5 highgate partners, the...
TRANSCRIPT
ConTenTS5 EXECUTIVE SUMMARY
8 PRoPERTY oVERVIEw
15 TEnAnT oVERVIEw
18 fInAnCIAl oVERVIEw
ConTACT:
BeAu TerreLL Vice President 404.272.0970 [email protected]
AnDrew murPhy Senior Vice President 770.913.3950 [email protected]
This Offering Memorandum and any subsequent evaluation material you may be provided (collectively known as the “Offering Memorandum”) is intended solely for your limited use in considering whether to pursue negotiations to acquire 3080 Premiere Parkway (the “Property”) located in Duluth, Georgia. The Property is being marketed for sale by Highgate Partners (“Broker”).
The Offering Memorandum contains brief, selected information pertaining to the business and affairs of the Property and has been prepared by Broker. It does not, however, purport to be all-inclusive or to contain all of the information that a prospective purchaser may desire. Broker makes no representation or warranty, express or implied, as to the accuracy or completeness of the Offering Memorandum or any of its contents, and no legal liability is assumed to be implied with respect thereto.
By acknowledgment of your receipt of the Offering Memorandum you agree that the Offering Memorandum and its contents are confidential, that you will hold and treat it in the strictest of confidence, that you will not directly or indirectly disclose, or permit anyone else to disclose, the Offering Memorandum or its contents to any other person, firm, or entity (including, without limitation, any principal for whom you have been engaged), without prior written authorization of Owner or Broker and that you will not use or permit to be used the Offering Memorandum or its contents to be copied or used in any fashion or manner detrimental to the interest of Owner. Photocopy or other duplication is strictly prohibited.
THE OFFERING MEMORANDUM SHALL NOT BE DEEMED TO REPRESENT THAT STATE OF AFFAIRS OF THE PROPERTY OR CONSTITUTE AN INDICATION THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS OR AFFAIRS OF THE PROPERTY SINCE THE DATE OF PREPARATION OF THE OFFERING MEMORANDUM.
The information provided in the Offering Memorandum has been gathered from sources that are deemed reliable, but the Broker does not warrant or represent that the information is true or correct. Prospective offerors are advised to verify information independently. The Offering Memorandum is not to be construed as an offer or as any part of a contract to sell the property.
Furthermore, the inclusion or exclusion in the Offering Memorandum of information relating to asbestos or any other hazardous, toxic or dangerous chemical item, waste or substance (hereinafter collectively referred to as “Waste”) relating to the Property shall in no way be construed as creating any warranties or representations, expressed or implied by the Broker as to the existence or nonexistence or nature of Waste in, under or on the Property, it may create significant legal and/or economic obligations upon the Owner, lessee and/or other holders of interest in the Property or a part thereof and you are hereby advised to obtain professional assistance such as from a consultant, engineer and/or attorney prior to taking an interest in the Property or a part thereof.
InfoRMATIon noT wARRAnTED
3080 Premiere Parkway
5
Highgate Partners, the exclusive representative,is pleased to present the opportunity to acquire 3080 Premiere Parkway, a multi-tenanted, 51,265 SF“ClassB”single-storyofficebuilding located inthe Duluth submarket of Atlanta, GA. Constructed in 1998, the property is 100% leased to three tenants (Group Resources, Rackspace US, Inc, and Saba Software, Inc.).
3080 Premiere Parkway offers an investor theopportunity to acquire an institutional quality asset thathasanaverage in-placeremaining leasetermof8.4years.Thatbeingsaid,aninvestorisprimedforsuccessbythelongtermin-placecashflowandthelimitedrolloverrisk.
inVeSTmenT hiGhLiGhTS
• CreditTenantBasewithExtensiveLeaseTerm• AssetDeliveredFreeandClearofExistingDebt• Measured Exposure • High Quality Asset• Proximity to Transportation Routes
CreDiT TenAnT BASe wiTh eXTenSiVe LeASe Term — The 3080 Premiere Parkway rent roll consists of a handful of credit worthy tenants, which adds stability to the tenant roster, further
inVeSTmenT ProfiLe
Rentable Square footage: 51,265 Sf
Debt Structure: free and clear
Acreage: 4.79
occupancy: 100%
Year one noI: $561,399
Asking Price: $7,017,487
In-Place Cap Rate: 8.00%
EXECUTIVE SUMMARY
3080 Premiere Parkway
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enhancing the quality of the asset for potential investors. GroupResources is the largesttenant in the building and represents 68% of the building. Group Resources has been in the building since its inception and just recently renewed for another ten years, pushing their expiration out to December 31st, 2024.
ASSeT DeLiVereD free AnD CLeAr of eXiSTinG DeBT — There is no debt currently encumbering thebuilding,offering the investors theopportunity to takeadvantageof theattractivedebtmarketsfora“preferredassetclass”asreferredbylenders.
meASureD eXPoSure —With8.44yearsofaverageremainingleasetermremaining,thepropertyprovidesconsiderablestabilityforaninvestor.Thetenantsinthebuildinghavestrongcommitmenttotheareawhichwillresultinahighrenewalprobabilitygiventheaccessibilityto their
hiGh QuALiTy ASSeT —3080PremiereParkwayisahighqualityofficebuilding.Theassethas been managed and meticulously maintained by the owner. The high quality asset has a brick andglass design andhas extensive landscaping in a lushpark settingwith abundantwraparound surface parking.
ProXimiTy To TrAnSPorTATion rouTeS — Adjacent to two major thoroughfares (I-85andSugarloafParkway)andsurroundedbyroadimprovements,visitorsandtenantscanreadilyaccesstheimmediateareaaswellasgreaterAtlantawithconvenienceandease.Astraffic congestion in the Atlanta area worsens, many employers are continuing to turn tosuburbanofficelocationstoincreasequalityoflifeforemployees.Thebuilding’sproximitytothesemajorthoroughfaresservetoattractnotonlytenantswiththeimmediatearea,butalsoopen the door to commuter employees.
EXECUTIVE SUMMARY, ConT’D.
3080 Premiere Parkway
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ACRES: 4.79
ToTAl REnTABlE SQUARE fEET:
51,265 Sf
YEAR BUIlT: 1998
foUnDATIon: Concrete slab
fRAME: Steel
Roof: Rubber membrane
STRUCTURE: Storefront glass, brick
flooRS: one-storyofficebuilding
TYPICAl flooR SIZE: 51,265 Sf
ElECTRICAl: 480V / 227V
lIfE SAfETY: Central monitor fA
HVAC: Multiple roof-top units
HVAC CoMPUTERSYSTEM:
Individualprogrammablethermostats
wInDowS: Double-pane windows
PARKInG: 4 per 1,000
SECURITY: Tenants maintain/pay for their own system
PRoPERTY InfoRMATIon
meADow ChurCh rD
SuGArLoAf PKwy
Prem
ie
r PKwy
• onemilefromI-85.
• oneblockfromtheGwinnett Arena.
• Convenienttoallareas of Gwinnett including all major banks, retail, residential and entertainment.
3080 Premiere Parkway
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PRoPERTY AERIAl
3080 Premiere PArKwAyDuLuTh, GA 30097
McDaniel Farm Park
ShortyHowell Park
Satellite Blvd
Mea
dow
Ch
urch
Rd
Old Peach
tree Rd
Sugarloaf Pkwy
85
316
120
23
Cartersville
McDonough
Covington
Oxford
Conyers
Loganville
Dacula
Sugar Hill
Buford
FloweryBranchCumming
Alpharetta
F U LTO N
D E K A L B
B A R T O WH A L L
Lawrenceville
DowntownAtlanta
CO B B
Kennesaw
Decatur
Duluth
Suwanee
G W I N N E T T
Stockbridge
McDonoughFayetteville
Braselton
113
41
400
675
78
3080 Premiere Parkway
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3080 PREMIERE PARKwAYDuLuTH(ATLAnTA),GA
AREA MAPS
3080 Premiere Parkway
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GroupResources is a third-party administratorprovidingbenefitandclaimsmanagement services relatedtohealthcarebenefits,cateringtosmall,mediumandlargebusinesses.ThecompanyisheadquarteredinAtlanta, with additional locations in Detroit, Dallas, Memphis, Sioux City and Phoenix.
Rackspace is the global leader in hybrid and open-source operating system for the cloud. Their product providesthebest-fitinfrastructureforanorganization’sITneeds,leveragingaproductportfoliothatallowsworkloadstorunwheretheyperformbest—publiccloud,privatecloud,dedicatedservers,oracombinationof platforms. Headquartered in San Antonio, TX, Rackspace operates nine data centers with more than 5,000 employees worldwide.
Saba is a global leader in next-generation cloud solutions for talent management. Cloud products include learning, performance, planning, collaboration, succession and recruiting. Headquartered in Redwood Shores,California,Sabahasofficesonfivecontinents,with2,200customersand31millionusersworldwide.
TEnAnT SUMMARIES
SQuAre fooTAGe35,000
LeASe eXPirATion12/2024
SQuAre fooTAGe11,002
LeASe eXPirATion02/2019
SQuAre fooTAGe5,298
LeASe eXPirATion12/2017
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TEnAnT nAME TYPE & SUITE nUMBER lEASE DATES & TERM
flooR SQfT BlDG SHARE
RATE & AMoUnTPER YEAR
PER MonTH
CHAnGES on
CHAnGESTo
DESCRIPTIon of oPERATInG EXPEnSE
REIMBURSEMEnTS
ASSUMPTIon ABoUTSUBSEQUEnT TERMS
foR THIS TEnAnTCoMMEnTS
Group Resources office,Suite:100Dec-1998 to Dec-2024 313 Months
35,00068.27%
18.85$659,750 $54,979
$4,581.60
Apr-2013 Apr-2014 Apr-2015 Apr-2016 Apr-2017 Apr-2018 Apr-2019 Apr-2020 Apr-2021 Apr-2022 Apr-2023 Apr-2024
$18.30 $18.85 $19.41 $20.00 $20.60 $21.21 $21.85 $22.51 $23.18 $23.88 $24.59 $25.33
FullService Market --
Rackspace US, Inc. office,Suite:115Mar-2011 to feb-2019 96 Months
5,70411.13%
15.45$88,127 $7,344 $611.99
Jan-2014 May-2014 May-2015 May-2016 May-2017 May-2018
$15.15 $15.45 $15.76 $16.08 $16.40 $16.73
ModifiedGross Market --
Rackspace US, Inc. Ex office,Suite:125oct-2013 to feb-2019 65 Months
5,29810.33%
14.00$74,172 $6,181
$515.08
Mar-2014 Mar-2015 Mar-2016 Mar-2017 Mar-2018
$14.00 $14.28 $14.57 $14.86 $15.15
ModifiedGross Market --
Saba Software, Inc. office,Suite:150Jan-2004 to Dec-2017 168 Months
5,26310.27%
17.85$93,945 $7,829
$652.39
Jan-2014 Jan-2015 Jan-2016 Jan-2017
$17.85 $16.50 $17.16 $17.85
Base Year Stop Market --
Total occupied Square feetTotalAvailableSquareFeet
51,265 0
100%0%
REnT Roll, AS of AUGUST 1, 2014
finAnCiAL oVerView
3080 Premiere Parkway
• Summaryof financial Assumptions
• CashFlowProjections
• In-PlaceIncome Reconciliation
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SUMMARY of fInAnCIAl ASSUMPTIonS
GLoBAL
Analysis PeriodCommencement Date December 1, 2014End Date november30,2024Term 10 Years
Area MeasuresBuilding Square footage (RSf) 51,265 Sf
Consumer Price Index (CPI) 2.00%
Vacancy loss [1] 5.00%
reVenue ASSumPTionS
2015 - 3.00% 2020 - 3.00%2016 - 3.00% 2021 - 3.00%2017 - 3.00% 2022 - 3.00%2018 - 3.00% 2023 - 3.00%2019 - 3.00% 2024 - 3.00%
eXPenSe ASSumPTionS
Growth Ratesoperating Expenses 2.00%CapitalReserves 2.00%Property Taxes 2.00%Property Taxes Reassessed no
Management fee (% of EGR) 3.00%operating Expense Source [2] CY 2013 P&l2011CapitalReserves $0.10 PSf
MARKET LEASING - 2ND GENERATION
Retention Ratio 75%lease Term 5 Years
2014 Annual Market RentSuites 100 & 150 $18.00 PSfSuites 100 & 150 $15.00 PSf
Rent Adjustment 3.00% Annually
ExpenseRecoveryTypeSuites 100 & 150 FullServiceSuites 100 & 150 ModifiedGross
2014TenantImprovementsnew $20.00 PSfRenewal $10.00 PSfWeightedAverage $12.50 PSf
Commissions new 1st and 4.00%Renewal 4.00%
Downtime new 6 Month(s)WeightedAverage[3] 2 Month(s)
[1]Avacancylossof5.00%hasbeenassumedforthisanalysis.
[2] operating Expenses are based on CY 2013 operating expenses. All entered 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 thenearest whole month.
General Property Notes
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Fiscal Year ending - november 30 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025FY 2015
POTENTIAL GROSS REVENUE $/SF/base rental revenue $18.04 $924,798 $950,867 $978,615 $1,012,548 $1,074,305 $1,115,901 $1,149,379 $1,183,859 $1,219,374 $1,255,356 $1,237,386
absorption & Turnover vacancy 0.00 $0 $0 $0 ($17,253) ($37,149) $0 $0 $0 ($20,001) ($43,065) ($141,111)
Scheduled Base Rental Revenue 18.04 924,798 950,867 978,615 995,295 1,037,156 1,115,901 1,149,379 1,183,859 1,199,373 1,212,291 1,096,275
expense recoveries 0.36 18,636 19,709 20,808 19,279 5,583 3,084 5,568 8,123 7,633 4,196 2,021
TOTAL POTENTIAL GROSS REVENUE 18.40 943,434 970,576 999,423 1,014,574 1,042,739 1,118,985 1,154,947 1,191,982 1,207,006 1,216,487 1,098,296
vacancy loss (0.92) (47,172) (48,529) (49,971) (34,338) (16,845) (55,949) (57,747) (59,599) (41,349) (19,913) 0
EFFECTIVE GROSS REVENUE 17.48 896,262 922,047 949,452 980,236 1,025,894 1,063,036 1,097,200 1,132,383 1,165,657 1,196,574 1,098,296
OPERATIONG EXPENSE
repairs & maintenance (0.84) (43,000) (43,860) (44,737) (45,632) (46,545) (47,475) (48,425) (49,393) (50,381) (51,389) (52,417)
real estate Tax (1.25) (63,863) (65,140) (66,443) (67,772) (69,127) (70,510) (71,920) (73,359) (74,826) (76,322) (77,849)
insurance (0.13) (6,500) (6,630) (6,763) (6,898) (7,036) (7,177) (7,320) (7,466) (7,616) (7,768) (7,923)
Telephone (0.07) (3,761) (3,836) (3,913) (3,991) (4,071) (4,152) (4,235) (4,320) (4,406) (4,494) (4,584)
electricity (1.64) (83,860) (85,537) (87,248) (88,993) (90,773) (92,588) (94,440) (96,329) (98,255) (100,220) (102,225)
gas (0.14) (7,038) (7,179) (7,322) (7,469) (7,618) (7,770) (7,926) (8,084) (8,246) (8,411) (8,579)
Water (0.26) (13,533) (13,804) (14,080) (14,362) (14,649) (14,942) (15,241) (15,546) (15,856) (16,174) (16,497)
security and life safety (0.13) (6,800) (6,936) (7,075) (7,216) (7,361) (7,508) (7,658) (7,811) (7,967) (8,127) (8,289)
landscaping (0.37) (18,798) (19,174) (19,557) (19,949) (20,348) (20,755) (21,170) (21,593) (22,025) (22,465) (22,915)
Trash collection (0.10) (5,090) (5,192) (5,296) (5,402) (5,510) (5,620) (5,732) (5,847) (5,964) (6,083) (6,205)
Janitorial (0.70) (35,732) (36,447) (37,176) (37,919) (38,677) (39,451) (40,240) (41,045) (41,866) (42,703) (43,557)
maintenance (0.39) (20,000) (20,400) (20,808) (21,224) (21,649) (22,082) (22,523) (22,974) (23,433) (23,902) (24,380)
management Fee (0.52) (26,888) (27,661) (28,484) (29,407) (30,777) (31,891) (32,916) (33,971) (34,970) (35,897) (32,949)
TOTAL OPERATING EXPENSES (6.01) (334,863) (341,796) (348,902) (356,234) (364,141) (371,921) (379,746) (387,738) (395,811) (403,955) (408,369)
NET OPERATING EXPENSES 11.48 561,399 580,251 600,550 624,002 661,753 691,115 717,454 744,645 769,846 792,619 689,927
LEASING & CAPITAL COSTS
Tenant improvements 0.00 0 0 0 (69,814) (148,861) 0 0 0 (77,081) (164,355) (533,310)
leasing commissions 0.00 0 0 0 (20,610) (44,376) 0 0 0 (23,892) (51,444) (168,565)
capital reserves (0.10) (5,126) (5,229) (5,334) (5,440) (5,549) (5,660) (5,773) (5,889) (6,007) (6,127) (6,249)
TOTAL EASING & CAPITAL COSTS (0.10) (5,126) (5,229) (5,334) (95,864) (198,786) (5,660) (5,773) (5,889) (106,980) (221,926) (708,124)
OPERATING CASH FLOW 11.38 556,273 575,022 595,216 528,138 462,967 685,455 711,681 738,756 662,866 570,693 (18,197)
CASH flow PRoJECTIonS
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TEnAnT SQUARE fEET
lEASE CoMMEnCEMEnT
lEASE TERMInATIon
2015 BASE REnT PSf
2015 BASE REnT
2015 oPER. EXP RECoVERIES
2015GRoSS REnT
Group Resources 35,000 12/98 12/24 $19.23 $672,909 $0 $672,909
Rackspace US, Inc. 5,704 3/11 2/19 15.63 89,172 9,331 98,503
Rackspace US, Inc. Expansion 5,298 10/13 2/19 14.21 75,285 8,667 83,952
Saba Software, Inc. 5,263 1/04 12/17 16.61 87,432 638 88,070
51,265 $924,798 $18,636 $943,434
Vacant 0 Effective Gross Income $943,434
Total Square Footage 51,265
In-PLACEInCoMEREConCILIATIon(FISCALYEAREnDInGnovEMBER30)
EXPEnSES
Repairs & Maintenance ($43,000)
Real Estate Tax ($63,863)
Insurance ($6,500)
Telephone ($3,761)
Electricity ($83,860)
Gas ($7,038)
water ($13,533)
Security and life Safety ($6,800)
landscaping ($18,798)
Trash Collection ($5,090)
Janitorial ($35,732)
Maintenance ($20,000)
Management fee ($26,888)
($334,863)
$608,571
foR MoRE InfoRMATIon, PlEASE ConTACT:
BeAu TerreLL Vice President 404.272.0970 [email protected]
AnDrew murPhy Senior Vice President 770.913.3950 [email protected]