offerinG memorAnDum - Ackerman & Co.€¦ · 3080 Premiere Parkway 5 Highgate Partners, the...

3080 Premiere ParkwayDuluth (Atlanta), GA

offerinG memorAnDum

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

eXeCuTiVe SummAry

• InvestmentHighlights

• InvestmentProfile


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


6

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.


ProPerTy oVerView

• PropertyInformation

• Aerial

• AreaMap

• Photographs


8

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.


9

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


10

3080 PREMIERE PARKwAYDuLuTH(ATLAnTA),GA

AREA MAPS


11

PRoPERTY PHoToGRAPHS


12

PRoPERTY PHoToGRAPHS

TenAnT oVerView


• Tenant Summaries

• RentRoll


14

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


SQuAre fooTAGe5,298



15

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


• Summaryof financial Assumptions

• CashFlowProjections

• In-PlaceIncome Reconciliation


17

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


18

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


19

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]

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