1705 State St. Nashville, TNOffering Memorandum

Single Tenant Net Leased Investment National Credit Tenant

Presented by:

Randy Hollandrandy.holland@compass.com m: 615.579.9686 

1705 State St.Nashville, Tennessee, 37203

THE TENANT AND FINANCIALS

NASHVILLE BY THE NUMBERS

PROPERTY OVERVIEW

1705 State St.Nashville, Tennessee, 37203

FINANCIALS

Nashville1422 Tamarind Avenue is located in the booming, culturally rich neighborhood of Hollywood. The recent revitalization of Hollywood, long in the making, is now in full swing. Major entertainment and tech companies like Netflix & Viacom are now embracing the neighborhood. In the past 12 months alone, more than 7,500 new jobs were created in Hollywood.

Hollywood is one of those neighborhoods that needs no introduction, synonymous as it is with the city of Los Angeles itself. Because of its history and famous sites like the Hollywood Walk of Fame, it has always attracted hordes of tourists, but now it has become the epicenter of new Class A office campuses in Los Angeles. Developers are creating millions of square feet of Class A office space and thousands of new luxury rental units. Old Hollywood is stepping in too, with Paramount Pictures recently winning approval for a 1.4 million-square-foot studio expansion. Companies specializing in streaming media and virtual reality are now flocking towards Hollywood. Hollywood is also one of the most populated areas for schools, with a wide range of colleges and specialized programs like AMDA (American Musical & Dramatic Academy), Emerson College, the Musicians Institute, and AFI. In the past two years, there has been a spike in the number of college students relocating here.

A Neighborhood that needs no introduction

Property Overview

Property Description1705 State Street is a 14-unit hotel property located just south and west of downtown Nashville in the heart of Nashville’s most explosive urban growth, in a neighborhood known as Midtown. Walking distance to a myriad of bars, coffee shops, restaurants, hospitals, and Vanderbilt University. The property is master leased to a national credit hospitality tenant. The building is comprised of (12) one-bedroom, one-bathroom units, and (2) studio units. Built originally in 1962, the building has been completely renovated with all-new plumbing, tankless instant hot-water, HVAC, kitchens and bathrooms, and features a beautifully landscaped central courtyard with bocci-ball court. 14 parking spots are included in the property.Separate from a short-term rental property, this property is zoned and permitted as a hotel eliminating any risk of lost use due to changes in local laws regarding short term rentals.

Property Details

14 Units

17th Ave S between West End and Church StMajor Intersection

Midtown Market

HotelLegal Defined Use

MUI-AZoning Type

6,684 SqFtBuilding SqFt

8,276 SqFtLot Size SqFt

The Tenant

The consistency and service of a great hotel that doesn’t come in a typical hotel format, combined with the warmth and comfort of staying in a space that feels more like a home, and the ability to choose the perfect location from the best neighborhoods in cities around the world. We believe this is the foundation of good travel. We’ve designed and outfitted every Sonder space for living, not just staying. A room that’s more than a room. Comfortable beds, nice linens, soft towels, and well-chosen amenities and essentials. We also made the service really simple. If there’s anything you need, just text us, 24 hours a day.

TAKING STAY FURTHER

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The Tenant

STAY IN CITIES AROUND THE WORLD

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The consistency and service of a great hotel that doesn’t come in a typical hotel format, combined with the warmth and comfort of staying in a space that feels more like a home, and the ability to choose the perfect location from the best neighborhoods in cities around the world. We believe this is the foundation of good travel.

TAKING STAY FURTHER

The Tenant

Our business started in 2012, but the real story of Sonder starts two years later in 2014, when we visited San Francisco for the first time. We’d booked an apartment and we were having a hard time getting in touch with our host. When we arrived with all of our

luggage, no one was there. After many unreturned messages, we finally connected, and learned there was a key under the mat. The apartment didn’t look like it was ready for visitors. There was half-eaten food in the fridge and dog hair blanketing the furniture. When

Lucas’s allergies started acting up, we realized we’d have to find another place to stay. We booked a hotel room downtown, and arrived to find comfortable beds with fresh white linens. Nothing exciting, but no dog hair at least. There weren’t too many restaurants in the area, so we ate at a generic chain and went back to our room. What if there was a place as reliable as a hotel, but with all the warmth and character of a home? That's why we founded Sonder — because you shouldn’t have to choose between great service

and an authentic travel experience. Happy travels,

Year 2

$248,814

$0

$248,814

$ 37,963* $210,851

$195,524

$ 15,327

$ 65,575

$ 80,903 7.3%

Year 3

$253,971

$0

$253,971

$ 39,414* $214,376

$195,524

$ 18,852

$ 68,690

$ 87,543 7.9%

Year 4

$258,887

$0

$258,887

$ 39,642* $219,225

$195,524

$ 23,701

$ 71,953

$ 95,654 8.6%

Year 5

$264,044

$0

$264,044

$ 41,168* $222,877

$195,524

$ 27,353

$ 75,372

$102,724 9.2%

Financials

Investment Summary

Price

Down Payment

Number of Units

Price Per Unit

Proposed Financing

Loan Rate

Loan Amortization

Loan Payment (P&I)

Annualized Financials

Scheduled Gross Income

Vacancy Allowance

Gross Operating Income

Less Expenses (See above)

Net Operating Income

Less Loan Payment

Pre-Tax Cash Flow

Plus Principal Reduction

Total Return Before Taxes

$4,000,000

$ 1,113,000 (27.8%)

14, MASTER LEASE

$285,714

$2,887,000

4.65% / 10 years

25 years

$16,931 per month

Current Year

$243,936

$0

$243,936

$ 37,749*

$206,187

$195,524

$ 10,663

$ 62,602

$ 73,274 6.6%

Year Built

Approx. Lot Size

Approx. Bldg. Sq. Ft

1960

8276

6,784

Price per SqFt

Current CAP

Zoning

$589.62

5.2%

MUI-ACurrent Year Expenses

Taxes

Insurance

Reserves (Right)

Utilities

Repairs

On-site Manger

Misc

Total Expenses

$ 24,609

$ 7,140

$ 6,000

TENANT

TENANT

TENANT

TENANT

$ 37,749

* - Future expenses estimated

Item

Roof

H20 heater

HVAC

Reserves Analysis

Replacement cost

$40,000

$30,000

$50,000

Expected life (yrs)

20

20

20

Total

Annual reserve

$2,000

$1,500

$2,500

$6,000

Property taxesCasualty insuranceBuilding Systems, Roof, Foundation

ManagementCleaningSales taxesHospitality taxes UtilitiesMaintenanceRepairsReplacementsLiability insuranceHotel license

Financials

Lease Abstract

All Units

Master Lease

Annual Rent

$243,600

Lease Start

7/01/2019

Lease End

6/30/2024

Escalations

2.0% per year

Options

Two 5-year

Landlord pays: Tenant pays:

Sold Properties

May 10, 2019Suntrust BankNashville, TNSelling Price: $2,327,792 CAP: 5.45%Term Remaining: 3 YrsOptions: One 5-yearEscalations: 2% annually

1.

3. August 23, 2017Hardee’sNashville, TNSelling Price: $2,535,000 CAP: 5.00%Term Remaining: _____ YrsOptions: _________Escalations: __________

December 18, 2018Chili'sNashville, TNSelling Price: $2,850,401CAP: 4.75%Term Remaining: 15 YrsOptions: Four 5-yearEscalations: 10% every 5 years

2.

On-Market Properties

Panera BreadShepherdsville, KYAsking Price: $3,173,000 CAP: 5.20%Corporate guaranteeTerm Remaining: 13.3 YrsOptions: Three 5-yearEscalations: 10% every 5 years

1.

2.

3.

Wendy'sKnoxville, TN Asking Price: $2,647,058CAP: 5.10%216-store franchisee guaranteeTerm Remaining: 20 YrsOptions: Three 5-yearEscalations: 7.5% every 5 years

7-ElevenSt. Cloud, FL Asking Price: $5,632,653CAP: 4.90%Corporate guaranteeTerm Remaining: 14.9 YrsOptions: Four 5-yearEscalations: 10% every 5 years

Disclaimer

This Offering Memorandum has been prepared exclusively by Urban Compass, Inc. d/b/a Compass (“Compass”) on behalf of the owner of the property (the “Owner”), regarding the purchase of property described herein at 1705 State Street, Nashville TN 37203 (the “Property”). It is intended solely for your limited use and benefit in determining whether you desire to express further interest in the purchase of the Property.  The materials in this Offering Memorandum contain selected information pertaining to the Property and do not purport to be a representation of the state of affairs of the Property or the Owner, to be all-inclusive or to contain all or part of the information which you may require to evaluate a purchase of the Property.

Although the information contained herein is believed to be correct, Compass, the Owner and their employees disclaim any and all liability for representations and warranties, expressed and implied or inaccuracies contained in or omitted from this Offering Memorandum or any other written or oral communication transmitted or made available to you.  All financial projections and information are provided for general reference purposes only and are based on assumptions relating to the general economy, market conditions, competition and other factors beyond the control of the Owner and Compass. Therefore, all projections, assumptions and other information provided and made herein are subject to material variation.  All measurements are approximations. You shall exercise independent due diligence in verifying all such information.

The Owner and Compass expressly reserve the right, in their sole discretion, to reject any or all expressions of interest or offers to purchase the Property, and/or to terminate discussions with any entity at any time with or without notice which may arise as a result of review of this Offering Memorandum.

You agree that this Offering Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest of confidence and that you will not disclose this Offering Memorandum or any of its contents to any other entity without the prior written authorization of the Owner or Compass.  You also agree that you will use this Offering Memorandum or any of its contents in any manner detrimental to the interest of the Owner or Compass.

If after reviewing this Offering Memorandum, you have no further interest in the Property, kindly return this Offering Memorandum to Compass.

No inspections of the Property are permitted unless accompanied by the Owner or a representative from Compass.

For more information, please contact:

Randy Hollandrandy.holland@compass.com m: 615.579.9686 

Holland & Co are a team of real estate licensees affiliated with Compass RE, a licensed real estate broker and abides by equal housing opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting or other professional advise outside of the realm of real estate brokerage. To reach the Compass RE office, call 615-475-5616.