Investment Details
  • Location Various
  • Investment Type Equity 506(b)
  • Property Type Office
  • Distribution Schedule Quarterly
  • Targeted Hold 5 - 7 Years
  • Targeted IRR 11.00 - 13.00%
  • Targeted Cash on Cash 9.00 - 11.00%
  • Total Transaction Size $45,300,000
  • Minimum Investment $3,000

Atlanta Diversified Portfolio Various

 Confidential Private Placement Memorandum - September, 2015

 This property is no longer open for investment. In the future, shares may appear on the exchange.

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About This Investment

Acquire Real Estate is pleased to offer an investment opportunity in The Atlanta Diversified Portfolio (“Properties”, "ADP" or “Portfolio”). The Portfolio was recently purchased by an investment syndicate sponsored by Albany Road Real Estate Partners (“Sponsor”)Acquire Atlanta Portfolio LLC (the “Company”) owns 2.06% of the Membership Interests in the Sponsor’s investment syndicate.

Investment Entity  Acquire Atlanta Portfolio LLC (the “Company”)
Investment Entity Manager  Acquire Advisory LLC (the “Manager”)
Offering Type  Equity
Offering Amount  $267,500
Ownership Interest in Sponsor Syndicate  2.06%

Acquire Real Estate Investor Projected Returns

Avg Cash on Cash (average annual cash on cash throughout investment period)   9.2%
IRR  8.7%
Equity Multiple  1.4

Executive Summary

The Atlanta Diversified Portfolio (ADP) is a four-property portfolio of Class A office and fully leased industrial properties totaling 371,097 square feet. The ADP is presently 96% leased and is the combination of two acquisitions: the $27 million purchase of a 198,000 SF Class A “live-work-play” office building from Atlanta Property Group -- a large Atlanta-based private office owner -- and the $14.2 million purchase of a 173,000 SF industrial portfolio from Long Wharf Real Estate Partners, a Boston-based private equity fund. By combining the two acquisitions, a more diverse offering is created that enhances cash flow stability, creates operating efficiencies, and increases the likelihood of an institutional exit due to its larger size. The portfolio was acquired at an attractive basis and will provide investors with both critical mass and product diversity in one of the most sought-after markets in the Southeast. 

1200 Ashwood (“Ashwood”) is a Class A, six-story office building well-located in the heart of Atlanta's Central Perimeter. This “live-work-play” submarket offers tenants a competitive advantage for a variety of reasons. Its centralized location is convenient for both employees and executives traveling from almost any point in the metropolitan area. Its also proximate to multiple single-family and mid- and high-rise multifamily and mixed-use projects, four rapid-rail stations (MARTA), and an irreplaceable amenity base of restaurants and retailers. With over $1.3 million in recent capital improvements, Ashwood continues to appeal to a diverse tenant profile including current anchors Noble Systems and Humana that occupy a combined 34% of the building. Ashwood is situated on 11.6 acres and is currently 91% leased with an average remaining lease term of 5.6 years. 

The Long Wharf Portfolio is a 100% leased, three-building, 172,666 square foot industrial portfolio located in the Northwest and Northeast submarkets of Atlanta. The properties are attractive to tenants due to their easy access to the Atlanta urban core as well as to Interstates 75 and 85, and the Northwest and Northeast arteries connecting to the Midwestern and Mid-Atlantic United States. The Long Wharf Portfolio is a diverse and fully leased portfolio of shallow-bay distribution, R&D and flex-industrial properties offering cash flow stability through its nine-tenant rent roll with an average remaining lease term of over 5 years. 

The ADP also includes 1,050 surface parking parking spaces: 618 parking spaces in the office building -- a competitive parking ratio of 3.1 per 1,000 square feet (3.1:1) -- and 432 parking spaces in the industrial buildings. This healthy parking ratio of 2.5 per 1,000 square feet (2.5:1) allows for a multitude of industrial, flex and R&D/office uses. 

Investment Highlights

Efficiency and Diversity Through Multiple Acquisitions

Combining 1200 Ashwood and the Long Wharf Industrial Portfolio creates a more diverse investment due to geographic and property-type diversity. The complementary nature of the combined rent roll provides for a more stable cash flow stream by reducing the investment’s exposure to any single tenant, thereby reducing rollover risk and submarket exposure. The properties appeal to a wide range of tenants -- multi-story office, shallow-bay distribution, R&D and flex-industrial uses -- and the combined portfolio is more efficient to operate and potentially more attractive to institutional buyers upon sale.   

Location

ADP is concentrated in three Atlanta submarkets: the Central Perimeter Office market, the Northwest Industrial submarket, and the Northeast Industrial submarket. 1200 Ashwood, comprising 60% of the ADP’s NOI,  is located in Central Perimeter, one of Atlanta's most sought-after office submarkets due its central location, rare availability of mass-transit, “live-work’play” environment and irreplaceable amenity-base. Central Perimeter also offers phenomenal access to midtown, downtown and Buckhead as well as virtually all labor pools of the city due to its central location and proximity to major transportation arteries. The strong attributes of Central Perimeter continue to attract young, educated millennial workers, further solidifying the area as a home to many of Atlanta's Fortune 500, including GE, State Farm, Cox Communications and Mercedes Benz. The Long Wharf Portfolio, located in the Northwest and Northeast Industrial submarkets of Atlanta, is concentrated in two business parks: Barrett Park and Avalon Ridge Park. Both business parks offer outstanding access, a superior labor pool and easy access to the urban core of Atlanta.  

High Retention Rent Roll with Credit Tenancy

The Atlanta Diversified Portfolio boasts a strong rent roll with 95,000 SF leased to publicly-traded or government tenants. Additionally over 50% of the portfolio’s tenants utilize their location as the company’s headquarters. The combination of financial strength and commitment to the location further increases the likelihood of lease renewal upon expiration. The rent roll includes a diverse list of technology, healthcare and service tenants including Noble Systems, Humana Employers Health Plan of Georgia (NYSE: HUM), Uni-Select (TSE: UNS) and Mohawk Carpet (NYSE: MHK).

Stability

ADP has a very manageable lease expiration schedule. By combining the two acquisitions, 50% of the portfolio’s leases expire over the assumed five-year hold period, or an average of 10% per year. Since the in-place leases in the Long Wharf Portfolio were recently executed, the majority expire in 2020 and 2021. Albany Road will work to early extend these leases (in 2018 and 2019) ahead of a projected 2020 resale. In buildings such as 1200 Ashwood and the Long Wharf Portfolio, where tenants generally sign five-year leases, 20% annual expirations are the norm and one would expect to see 100% of the leases expiring during the initial five years of ownership. The lease expiration exposure for ADP is half of this.

Attractive Yield with Low Vacancy

The Portfolio is being acquired at a cap rate (initial, unlevered yield) of 7.4% with a quick path to +8% through a small amount of leasing, contractual rent increases and the burn off of free rent. With such strong occupancy, the projected yields are in-place with only 13,213 square feet (3.6%) of vacancy in the portfolio. Coupled with the credit tenancy of the portfolio and modest leasing assumptions, the risk profile of the investment compared to the projected return is very attractive for such a strong underlying real estate market. 

Favorable Pricing Metrics

The portfolio purchase price of $111 per square foot represents an estimated 34% discount to replacement cost, reducing the likelihood that the property will have to compete (from a rental rate perspective) with any new development projects when and if they were to be undertaken. Replacement cost for ADP is estimated to be between $105 and $185 per square foot, depending on product type. Please see the chart below for a detailed replacement cost analysis for each asset:  

Building Purchase Price Purchase Price (PSF) Replacement Cost (PSF) Discount to Replacement Cost (%)
1200 Ashwood $27,000,000 $136 $225 40%
Long Wharf Portfolio $14,200,000 $82 $105 22%
Total/Average $41,200,000 $111 $170 34%

 Healthy, Vibrant and Diverse Economy

The metro Atlanta area has recorded monthly year-over-year employment gains for over four consecutive years according to the Bureau of Labor Statistics. It’s been almost 30 quarters since Atlanta’s pre-recession peak job level was reached. Due to the consistent and increasing job growth, Atlanta is on pace to meet previous peak job levels by the end of 2015. The job growth has already shown positive effects in the office market. Atlanta’s job growth will outpace that of most other metros, as low living and business costs fuel strong population gains and a healthy number of corporate relocations and expansions. Moody’s estimates employment in the region totaled 2.5 million in 2014 and is projected to grow 2% annually through 2020. That rate exceeds growth for the U.S. overall by nearly 1% annually and places Atlanta among the fastest growing MSAs.   

Contractual Rent Increases

Over 75% of the Tenants in ADP have annual contractual rent increases of approximately $0.50/sf/year, which equates to approximately $150,000 per year in increased revenue. This creates a built-in property value increase, based on a simple cap of in-place income, that equates to $1.8 Million a year. In addition, almost half of the portfolio has tenants on a net-lease structure, which provides for a full pass through of all operating expense, further reducing operating expense exposure.  

Investor Returns

This calculator predicts your cash flow based on your initial investment and the targeted returns for the property. The output is based on an investment made on day one of the offering.

Returns
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Internal Rate of Return
Equity Multiple
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* The return of capital fee is only processed once the investor receives a full return of initial capital, excluding operating distributions.

Property Description

1200 Ashwood and the Long Wharf Portfolio (Vaughn, Roberts, and Avalon) were built between 1985 and 1996. In the aggregate, the portfolio sits on 31.2 acres of land and totals 371,097 rentable square feet.  

1200 Ashwood

1200 Ashwood was developed in 1985 as a six-story, 198,431 square foot Class A office building. Ashwood offers tenants a beautiful office setting within a tree-lined and heavily landscaped campus with two scenic ponds and walking trails. The propery is also walking distance to an irreplaceable amenity base of over 30 restaurants and retailers. Ashwood’s location is a competitive advantage due to the  “live-work-play” environment it offers. Ashwood is proximate to mid- and high-rise Class A apartments, rail-transit (MARTA) and a dynamic amenity base. Coupled with its central location and the access that the Central Perimeter provides, Ashwood is an ideal location for the majority of companies in the market. Anchored by Noble Systems and Humana Employers Health Plan of Georgia that occupy a combined 34% of the building through 2025 and 2020, Ashwood has a very manageable lease expiration schedule. The property has 618 parking spaces and a parking ratio of 3.1:1, which is appropriate for multi-story office.   

1200 Ashwood Site Plan

1200 Ashwood Typical Floor Plan

1200 Ashwood Tenant Roster

Tenant  Square Feet LED
Noble Systems Corp. (Data Center) 8,049 Dec-25
Yas Inc. (DBA Bon Apetit Bistro) 2,390 Feb-16
General Services (DBA US Forest Service Storage) 225 Nov-24
Evan L. Kane LLC 1,972 Nov-17
What's Up LLC 6,577 Dec-16
The Jackson LeBlanc Agency LLC 1,021 Aug-16
Humana Employers Health Plan of Georgia Inc. 5,522 Aug-20
Calvin Edwards & Company LLC 2,386 Dec-16
Entaire Global Companies Inc. 10,221 Sep-20
Humana Employers Health Plan of Georgia Inc. 1,792 Aug-20
Social Security Advocates for the Disabled LLC 1,270 Jun-16
Techwood Consulting LLC 1,542 Jan-17
Mortgage Assurance Inc. 9,581 Sep-20
Ritter Insurance Marketing 1,705 Jul-20
General Services (DBA US Forest Service) 6,785 Nov-24
Humana Employers Health Plan of Georgia Inc. 18,850 Aug-20
Noble System Corp. 33,471 Dec-25
International Society of Travel Medicine Inc. 2,429 Jul-20
Pearl Net LLC 7,467 Jun-15
Holzer & Holzer LLC 1,678 Dec-19
Sedgwick Claims Management Services Inc. 21,834 Mar-17
General Services (DBA US Forest Service) 4,153 Nov-24
ACTA Inc. (DBA USTA Atlanta) 3,424 Aug-18
ACDP Lawyers LLC 1,502 May-17
Payroll 1 Inc. 2,864 Dec-15
UC Travel Inc. 943 Apr-16
MCCI Group Holding LLC 7,453 Dec-18
OoVoo LLC 2,109 Dec-15
The Abram Law Group LLC 2,220 May-15
American Israel Public Affairs Committee 4,920 Oct-20
Patriot Capital Corporation 2,665 Sep-18
9008 Group Inc. (DBA Agile 1) 2,710 Oct-15
Total / Average Occupied  181,730  
Tenant Common 3,488  
Available 13,213  
Property Total 198,431  

 

1965 Vaughn Road

1965 Vaughn Road was developed as a one-story, 46,808 square foot, shallow-bay distribution building in 1992. The building is 40% office and 60% warehouse, offering tenants an ideal operations-facility mix. Vaughn is currently leased to three tenants: Pivotal Retail, Comfort Systems USA and Abe Enterprises. The project has 62 parking spaces, offering a parking ratio of 1.3:1. This is sufficient for tenants using flex-industrial space, which has a lower percentage of office space.

Vaughn Road Site Plan

Vaughn Road Floor Plan

Vaughn Road Tenant Roster

Tenant  Square Feet LED
Pivotal Retail Group 22,257 May-20
Comfort Systems USA 11,212 Mar-19
ABE Enterprises 13,339 Sep-19
Total / Average Occupied  46,808  
Available 0  
Property Total 46,808  

Roberts Boulevard 

Roberts was developed as a single-story, 65,000 square foot office/R&D building in 1991. The building comprises concrete construction with steel frame and glass on all sides, which efficiently accommodates the three tenants who need R&D space within a park environment. Roberts is currently 100% leased to three tenants: Dornier Medtech, Uni-Select and Mohawk. The project has 186 parking spaces and offers a parking ratio of 2.9:1, a very attractive ratio to R&D tenants who generally utilize a higher percentage of office finish.  

Roberts Boulevard Site Plan

 

Roberts Boulevard Floor Plan

Roberts Boulevard Tenant Roster

Tenant  Square Feet LED
Dornier Medtech America 35,059 Jul-20
Uni-Select 17,415 Jun-19
Mohawk Carpet 12,526 Dec-19
Total / Average Occupied  65,000  
Available 0  
Property Total 65,000  

Avalon Ridge

Avalon was developed as a 60,858 square foot, single-story, shallow-bay distribution building in 1996. Built with a higher parking ratio and abundant glass, the building is very versatile and has gravitated toward a heavier office finish. Avalon is currently 100% leased to three tenants: EFI, Capital City Mechanical and Universal Hospital Services.  The project has 184 parking spaces and offers a parking ratio of 3.0:1, an ideal ratio to attract tenants to single-story office product.   

Avalon Ridge Site Plan

Avolon Ridge Floor Plan

Avolon Ridge Tenant Roster

Tenant  Square Feet LED
Capital City Mechanical 16,550 Sep-19
Universal Hospital 15,781 Dec-16
Electronics for Imaging 28,527 Nov-21
Total / Average Occupied  60,858  
Available 0  
Property Total 60,858  

Major Tenant Profiles 

Founded in 1989, Noble Systems Corporation (NSC) is a global leader in the customer communications industry, providing the best-in-class services in customer interaction management, business process management, and customer analytics. NSC offers a unified suite of multi-channel inbound, outbound and blended contact processing, strategy planning, and resource management tools for companies of all sizes, helping them convert their call centers into true profit centers. NSC serves as the technology vendor of choice for tens of thousands of agents at over 4,000 client sites around the world, powering millions of customer contacts each day. The global company has more than 400 employees throughout its offices located in the US, the UK, France, Mexico, Brazil, Australia, India, and the Philippines. This location serves as NSC’s headquarters. Noble System occupies 41,520 square feet in 1200 Ashwood through December 2025.   

Dornier MedTech America, Inc. manufactures therapeutic and diagnostic products for urology and medical-aesthetic laser markets. It offers urology imaging systems, lithotripters, orthopedic shock wave devices, urology tables, surgical lasers, and medical aesthetic lasers. The company was incorporated in 1984 and is headquartered in the Roberts Building. Dornier MedTech America, Inc. operates as a subsidiary of Dornier MedTech GmbH.  Dornier’s early findings in research and design laid the cornerstone for the evolution of metal aircraft. His research and design resulted in the invention of extracorporeal shock wave lithotripsy, which is used to treat stones in the kidneys, gallbladder and liver.  As a global leader, Dornier continues to develop innovative solutions to benefit patients and physicians alike. Dornier MedTech America occupies 35,059 square feet in the Long Wharf Portfolio through July 2020.

EFI is the world’s leader in digital imaging and print-management solutions, serving commercial and enterprise printing companies. Silicon Valley, California-based EFI helps businesses and enterprises work more productively and cost-effectively. Its integrated product portfolio consists of industrial inkjet printers and inks, powerful digital front ends, precise color management tools, eCommerce, web-to-print & productivity software for business automation, and mobile and cloud printing products. Its customers choose EFI because of its expertise in developing printing-related technology, quick turnaround, cost savings, and strong brand recognition among print professionals and corporate clients.  EFI has offices throughout North America and around the world. EFI occupies 28,527 square feet in the Long Wharf Portfolio through November, 2021.   

Humana (NYSE: HUM) is an American for-profit healthcare company that markets and administers health insurance. With over 13 million customers, 52,000 employees, and 2013 revenue of $41.3 billion, Humana is the 3rd largest healthcare provider in the US and is ranked 73rd in the Fortune 500 as of 2013. The Louisville, KY-based company was originally formed in 1961 as a nursing home company, going public in 1968. Humana started marketing insurance products in 1984 and continued to transition into a consumer health benefits company throughout the 1990s. Today, Humana offers a diverse line of insurance products including family, military, and employee plans. Humana occupies 26,164 square feet in 1200 Ashwood through August 2020.  

Investment

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Market

Location Overview

Atlanta is the hub and economic engine of the Southeast, which is the fastest growing region in the U.S.  The city’s thriving economy and job base, coupled with its high quality and low cost of living, make it an ideal destination to draw young and educated talent from the region’s major universities. 

With an overall population of 5.5 million throughout the 28-county metro area, Atlanta is the ninth–largest Metropolitan Statistical Area (MSA) in the United States and is projected to be the 6th most populated metro area by 2020. Over the course of the 1990s and into the 2000s, Atlanta evolved from the regional “capital” of the Southeast into its current distinction as a leading international city for business. During that period of time, Atlanta led the U.S.  economy in terms of job growth, averaging between 80,000 and 100,000 new jobs created each year for several years. 

Since the economic downturn in 2008, Atlanta’s positive economic momentum has returned. Atlanta prospers by combining layers of logistical advantages with a low cost of doing business, an educated workforce and high quality of living. Diversified and substantial investment from corporations and state and local governments make Atlanta a favorable place to conduct business. 

Atlanta is home to the headquarters of 11 Fortune 500 companies including: Delta, Coca-Cola, UPS, Home Depot and Southern Company. An additional 2,100 international companies can be found in Atlanta. As further proof that Atlanta is a mainstay of global commerce, this fast-growing metropolis is also host to the busiest airport in the world in terms of passenger volume -- Hartsfield-Jackson Atlanta International Airport -- which averages over 250,000 passengers a day. Atlanta is also within a two-hour flight of 80 percent of the U.S. population.

Technology

Atlanta is one of the fastest-growing high-tech urban centers in the nation. Annual growth for tech jobs is projected at 4.5 to 5.0 percent, as compared to less than 2.0 percent for other industries. A pool of educated talent and Atlanta’s generally low cost of living are prime attractors for tech companies. More than 13,000 technology companies exist in Atlanta, and the city is established for its strengths in telecom, Internet security, digital media and a thriving mobility ecosystem. The Technology Association of Georgia, based in Atlanta, is one of the largest and most active tech organizations in the nation. Companies like NCR Corporation, First Data and Sony Ericsson are just a few examples of companies that have chosen to relocate to Atlanta in recent years. 

Healthcare

Atlanta’s reputation as a healthcare hub continues to grow as industry players tackle new challenges and the sector attracts more investment. DeKalb County is home to the Centers for Disease Control and Prevention (CDC) as well as Emory University Hospital, which employs a staff of nearly 15,000. 

Atlanta served as a focal point for Ebola expertise, as the recent Ebola epidemic has underscored the concentration of medical expertise and the sophistication of the medical facilities in Atlanta. Professionals at Emory University Hospital and the Centers for Disease Control and Prevention played leading roles in domestic efforts to combat the deadly virus.  

Logistics and Transportation

Home to the busiest airport in the United States, Atlanta is a vital transportation and logistics hub. Investment in infrastructure in the years leading up to the 1996 Summer Olympics is one reason that Atlanta is now home to a number of leading transportation and logistics companies. The largest employer in the Metro Atlanta area is Delta Air Lines. One of the largest logistics companies in the world, United Parcel Service (UPS), moved its headquarters to Atlanta in 1991 and continues to be one of the city’s largest employers. 

Education

Atlanta is home to more than 50 accredited universities, colleges, and technical schools, including Georgia Institute of Technology, Emory University, Georgia State University, and the Atlanta University Center, which includes Clark, Spelman, and Morehouse colleges. More than 58% of individuals over the age of 25 in Atlanta have a post-secondary education, above the national average of 52%. Atlanta’s high concentration of educated professionals will continue to make the area a preferred destination for corporate relocations and expansions.

ADP's tenancy is diversified with concentrations in Healthcare (Humana, Dornier, Universal Hospital) and Technology (Noble Systems). Furthermore, the tenants within Vaughn, Roberts and Avalon are all logistics-based which draws them to the light-industrial nature of the buildings (truck courts, loading docks, etc.).

Market Overview

Overall Atlanta Office and Industrial Market                                 

The Atlanta Class A and B office market encompasses 10 different submarkets totaling 162.8 million square feet. Of this total, 26.4 million square feet is direct vacant space, with the current Class A and B market vacancy resting at 16.9%.

The overall Atlanta office market absorbed 992,000 net square feet during the second quarter, the most in a single quarter since the start of 2014. This took the overall office market’s vacancy down to 17.0%, the lowest since the start of 2009. From 2009 to 2011, the market had negative 3.6 million square feet of net absorption and had a peak vacancy rate of 21.1%. Since that time, 8.2 million square feet of office space has been absorbed. The Class A office sector was responsible for 80% of the overall net absorption, posting 781,000 net square feet absorbed. This is the highest mark for Class A absorption since 2007. The absorption has pushed the Class A vacancy level to its lowest mark in 14 years (15.3%), when the market was 20 million square feet smaller. This activity has pushed Class A asking rents to pre-recession levels. The Northeast submarket boasted some of the quarter’s largest occupancies. Comcast occupied its new 88,000 square foot regional headquarters at 6200 The Corners Parkway, a move that is expected to add 150 new jobs to the area. Also in the Northeast, Liberty Mutual occupied a 52,000 square foot office space at The Terraces at Suwanee Gateway. Elsewhere, Veritiv occupied their 68,000 square foot headquarters at 400 Northpark, and Intercontinental Hotels Group expanded its office by 38,000 square feet at Three Ravinia for a total of 321,000 square feet, both in the Central Perimeter submarket. In Midtown, Norfolk Southern occupied a 92,000 square foot space at 400 Colony Square.

The Atlanta Industrial market includes 12 different submarkets containing 445.6 million square feet. Of this total 48.6 million square feet is direct vacant space, with current vacancy sitting at 11.2%, the lowest in 15 years.  

The second quarter marks the 13th in a row with at least 1 million square feet of net absorption. The 3.8 million square feet absorbed reduced the overall vacancy to 11.3%, the lowest in 15 years. With the decreasing amount of available space, developers such as Majestic, Ridgeline, and TPA Group have ramped up construction of speculative space. The 10 million square feet of speculative space currently under construction is the most at one time in almost 10 years.

The Central Perimeter Atlanta Office Submarket

The Central Perimeter submarket is Atlanta’s largest office submarket containing 23.3 million square feet and 13.7% of Atlanta’s total office inventory. Central Perimeter has become the home to many of Atlanta's Fortune 100 and 500 companies with State Farm and Mercedes Benz being the most recent relocations. The central location and surplus of quality amenities provide tenants with efficient access to virtually all of Atlanta's educated talent base.  

The Central Perimeter office market saw a market-leading 856,000 square feet absorbed in 2014, and an additional 168,698 through Q1 2015 dropping the vacancy rate to 15.2%. The submarket’s Class A vacancy rate of 11.7% is the lowest vacancy of all the Atlanta submarkets. While vacancy continues to drop, rents have consistently risen.  Class A rents have gone up $2.30 per square foot since the start of 2014 to finish Q1 2015 at $26.30 per square foot.  

In addition to rising rents and lower vacancies, the Central Perimeter Office market continues to attract large corporations. Construction continues on the 2.2 million square foot State Farm Insurance corporate campus. In addition, Mercedes-Benz USA announced it is relocating its U.S. Headquarters to Atlanta from Newark, NJ. Mercedes will invest about $100 million in a 200,000 square foot build-to-suit headquarters. The company is looking at potential sites in the Central Perimeter market and expects to be in its new office space in 2017. Meanwhile, Mercedes plans to move into temporary space starting in mid-year 2015. The move is expected to bring approximately 1,000 jobs to the Atlanta area.  

The Northwest Atlanta Industrial Submarket                                                                                                                                                             

The Northwest Industrial submarket is Atlanta’s third largest industrial sector totaling 45.6 million square feet. Finishing 2014 on a strong note, Northwest Atlanta absorbed almost 800,000 square feet in the fourth quarter. The Northwest has the second-lowest vacancy rate at 9.6% and the second-highest average asking rents at $4.66. 

The submarket has seen strong construction with 2.3 million square feet recently under construction, but these are mainly build-to-suit properties, most notably Surya Rugs 1 million square foot distribution center in Cartersville and the 500,000 square foot manufacturing facility for Beaulieu International. Shaw Carpets is in the process of occupying its new 750,000 square foot facility.

The Northeast Atlanta Industrial Submarket

The Northeast submarket contains Atlanta’s largest concentration of industrial space, with over 130.8MM square feet and a quarter of Atlanta’s industrial inventory. The majority of this submarket lies within Gwinnett County. Over 1.1 million square feet of industrial space was absorbed in Northeast Atlanta in the first quarter of 2015. At a vacancy rate of 9.2%, the lowest in 15 years when the submarket was 33 million square feet smaller, Atlanta’s largest industrial submarket enjoys the lowest vacancy rate in the overall industrial market. Overall industrial asking rents are $4.17 in the market, up slightly from $3.98 per square foot at the end of 2014.   

Management

Albany Road Real Estate Partners

Albany Road Real Estate Partners is a Boston-based firm that was established in July 2012 by four partners committed to providing investors with attractive, risk adjusted returns.  The firm was established with an initial focus on acquisition opportunities across the Northeast.  Albany Road has since expanded its reach into the Southeast, with multiple holdings in Atlanta, GA and Nashville, TN, and the concurrent opening of a regional office in Nashville, TN.


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