Offering 91% Subscribed
Hey <<First Name>>,
We are 91% subscribed on our most recent investment opportunity, a 20,000 sqft multi-tenant industrial property in the fastest growing and highest income suburb of Atlanta.
If you are interested, please let me know and I'm happy to discuss it further.
High Level Overview
We are purchasing a 20,000 sqft class-B multi-tenant industrial property in Cumming, GA, which is in Forsyth County - the fastest growing, highest income county in the Atlanta MSA. The property has 4 tenants, is fully leased, and we intend to stabilize at a 10% yield-on-cost once we roll the tenants to market rents. We projected market rents at $12.25 NNN, but we have comps showing that $14+ NNN is achievable. We are going in all cash and aim to return the majority of investor capital by the end of year 2 via a refinance.
$68/sqft Below Sale Comps (on Average)
We are acquiring this property off-market for $105/sqft, $68/sqft below the average market sale price of comparable properties since April 2022. This is a unique opportunity to acquire a very well located and functional asset for a fantastic basis due to the low in-place rents at the property.
A detailed list of sale comps, along with pictures and comparisons to other properties, is included inside.
Projected Rents Far Below Comps
We project leasing the spaces at $12.25 NNN once leases roll over (over the next 14 months), however, we are aware of 5 leases signed in Cumming in the last 24 months for spaces similar to ours, and all are between $12.50 and $14 NNN.
Based on the quality of our warehouses, large truck court, and dock door accessibility, we conservatively project that we can achieve $12.25 NNN rents at this property and think there is a strong upside case of achieving $13+ NNN.
Our projected rental rate is un-trended, i.e. we are assuming 0 market rent growth between now and when leases are executed (9-21 months from close), although it is reasonable to assume that market rent will grow over that time period; at a recent acquisition in a similar but inferior market nearby, we modeled $12 NNN rents, which were around market, and achieved a $12.50 NNN lease with 5% escalations just this month.
A detailed map showing comparable leases and unit sizes is included in the offering memorandum.
Conservative Assumptions and High Reserves
Although it is likely that at least 3 of 4 tenants stay, we are projecting very conservatively that each tenant leaves, it takes 9 months to re-tenant (3 months during the lease, 6 months of downtime), we have to pay a leasing broker a full 6% commission, and each tenant is given $4/sqft in TI towards their lease. On top of all of these reserves, we are reserving another $40k.
We are going all cash, and have 0 foreclosure risk.
Closing out the raise
We raised $1.6m to purchase this property using 40% debt, but have since switched to an all cash approach. Every existing investor in that deal is staying in despite the change in strategy, and we are looking for a few more. If you are interested in joining the deal, I would love to have you on. If you are interested in learning more, please set up a time to get introduced or send me an email if none of these times work.
Please let me know if you have any questions, and I hope to work with you soon.
All the very best,
Ryan Auger
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