Property Details
Asset Profile
Core Plus

Avistone Gateway Oaks, LLC

Marietta, GA

Industrial Property
Avistone LLC Laguna Niguel, CA
Avistone LLC
Targets
  • IRR 11.7%
  • Equity Multiple 1.65x
  • Hold Period 5Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 7%
  • Stabilized Cash on Cash 7% in Y1
  • First Distribution Dec 2018
  • Distribution Frequency Monthly
  • Co-Investment 3%
  • Preferred Return 8.0% (2)
  • Investor Profit Share 70%
  • Asset Profile Core Plus
  • Loan-to-Value 65%
  • Current Occupancy 90% (1)

About this Property

Avistone’s fifth investment offering in the Atlanta region, Gateway Oaks, is a 152,179 square-foot, multi-tenant flex/industrial park located in Marietta, Georgia, and provides versatile spaces for warehousing, business services and office uses. The property represents an opportunity to invest in a four-building, 13.46-acre business park just 14 miles from downtown Atlanta in the vibrant Franklin Gateway Corridor within Atlanta’s northwest industrial sub-market. Gateway Oaks is currently 90.97%1 leased to 11 tenants with a weighted average tenancy of more than five years, while no single tenant represents more than 17.5% of the leasable space.

Avistone’s primary objectives are to operate the property efficiently, distribute any available cash flow monthly to investors and create value by increasing occupancy and rental rates over the next several years given the strength of the region’s flex/industrial market. The existing rental rates at the property are approximately 8% under market. To facilitate bringing rental rates to market, on-site improvements will incorporate correcting deferred maintenance issues, as well as renovating exterior common areas including landscaping and painting. The successful execution of the plan will ultimately enhance the property’s net operating income and create the potential for property value appreciation over a 3- to 5-year anticipated investment holding period, although there is no assurance objectives will be realized.

1As of 9/1/2018. In Year 1, approximately 26.6% of leases are due for renewal

About this Property

Avistone’s fifth investment offering in the Atlanta region, Gateway Oaks, is a 152,179 square-foot, multi-tenant flex/industrial park located in Marietta, Georgia, and provides versatile spaces for warehousing, business services and office uses. The property represents an opportunity to invest in a four-building, 13.46-acre business park just 14 miles from downtown Atlanta in the vibrant Franklin Gateway Corridor within Atlanta’s northwest industrial sub-market. Gateway Oaks is currently 90.97%1 leased to 11 tenants with a weighted average tenancy of more than five years, while no single tenant represents more than 17.5% of the leasable space.

Avistone’s primary objectives are to operate the property efficiently, distribute any available cash flow monthly to investors and create value by increasing occupancy and rental rates over the next several years given the strength of the region’s flex/industrial market. The existing rental rates at the property are approximately 8% under market. To facilitate bringing rental rates to market, on-site improvements will incorporate correcting deferred maintenance issues, as well as renovating exterior common areas including landscaping and painting. The successful execution of the plan will ultimately enhance the property’s net operating income and create the potential for property value appreciation over a 3- to 5-year anticipated investment holding period, although there is no assurance objectives will be realized.

1As of 9/1/2018. In Year 1, approximately 26.6% of leases are due for renewal

Key Points

  • Nearby Growth Drivers - Gateway Oaks benefits from its dynamic location within a Qualified Opportunity Zone with potential for tax benefits which we believe will cause an influx of development beyond what is currently happening. The area surrounding the property is experiencing a major revitalization attributable to a significant influx of private and public investment including the Atlanta Braves’ Sun Trust Park and Atlanta Battery, a lifestyle destination, offering a mix of modern residential options, retail space, entertainment and restaurants. Also, the Atlanta United FC recently built a training facility, Home Depot moved its national IT operations to the area and a second IKEA location in the Atlanta market is being built right near the property.
  • Strength of Tenant Base – The Property is currently 90.97% leased to 11 tenants, with no single tenant occupying more than 17.5% of the net rentable area (NRA).* The weighted average length of tenancy is more than five years, which accentuates the long-term value proposition for the Property. The three largest anchors are Pivotal Retail Group (17.5% of NRA) Northwest Express Roadbuilders (15.7% NRA) and UnitedHealth Group, Inc. (12% of NRA). (*As of 8/1/18., approx. 26.6% of leases are due for renewal in Yr 1.)
  • Atlanta Market Growth – Atlanta is Georgia’s state capital and is considered to be a top business city and a primary transportation hub of the Southeastern U.S. The greater metropolitan area ranks nationally 5th in population, 3rd in population growth, 6th in economy, 3rd in the most Fortune 500 headquarters, and is one of the fastest growing markets in the U.S. with an average growth rate of 1.5% (2011-2016) and an average annual employment growth that has outpaced the national average for the past six years. Atlanta features a diversified economy with a high concentration in trade, transportation, services, and is one of the least expensive major American cities in which to operate a business. (Sources: Forbes; U.S. Census Bureau)
  • Atlanta Industrial Market – The Atlanta industrial / warehouse market has experienced aggressive absorption over the past several years. The industrial market consists of more than 697 million square feet, with a current overall vacancy rate of 7.0%. The size of the shallow-bay and flex/industrial market stands at 74 million square feet, which was approximately 93.5% occupied at the end of Q2 2018. Gateway Oaks is located within the Northwest Atlanta Industrial Submarket, which has a vacancy rate of 3.7% for shallow bay/flex. (Source: Colliers)
  • Sponsor's Market Presence & Expertise – Currently, Avistone owns and operates four multi-tenant flex business parks in the Atlanta market totaling more than 850,000 square feet. The company’s 470,971 square-foot Northwest Business Center in Marietta is one mile from the Property, creating the potential for synergistic leasing opportunities. Avistone’s Atlanta-based property management team will endeavor to facilitate a smooth transition after acquisition, efficient lease-up of vacant space, and creation of strong relationships with tenants.
  • See the Disclaimer Document located in the "Documents" tab for additional disclaimers regarding this offering.

Offered By

Avistone LLC

Avistone LLC

Laguna Niguel, CA

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Assets Under
Management

Currently
$215MM 10+ assets
Exited
$0 less than 10 assets
Portfolio LTV
70%  
Historical
Realized Returns

Total IRR
0%  
Equity Multiple
0x  
Annual Cash
8%  
Years Of
Experience

As Principals
30+ years  
In Business
6 years  
Size
16 Staff * Dedicated investor relations
* All information is reported by Avistone LLC as of 1/15/2019.
Assets Under
Management

Currently
$215MM 10+ assets
Exited
$0 less than 10 assets
Portfolio LTV
70%  
Historical
Returns

Total IRR
0%  
Equity Multiple
0x  
Annual Cash
8%  
Years Of
Experience

As Principals
30+ years  
In Business
6 years  
Size
16 Staff * Dedicated investor relations
* All information is reported by Avistone LLC as of 1/15/2019.

Financials

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Offering Financial

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Diligence Preview

Location Details

Marietta, GA

The Property is well located within the Franklin Gateway Corridor micro-market in the center of Atlanta’s Northwest Flex/Industrial Submarket, adjacent to I-75 and US 41 (Cobb Parkway) in the City of Marietta in Cobb County. The location provides linkage to the entire Atlanta metro area and to the heart of the Atlanta central business district (15 miles south). As noted by Colliers International, the Franklin Gateway Corridor represents “one of Atlanta’s most rapidly transforming and dynamic corridors.”

The Property’s location is an area designated by the Georgia Department of Community Affairs as a Qualified Opportunity Zone (“QO Zone”), where businesses may qualify for a $3,500 tax credit for 5 years when two or more eligible net new jobs are created within a single tax year. In addition, the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts Act”) includes provisions which allows for temporary deferral of capital gains and other benefits for investments in a QO Zone. While the Property will likely not qualify directly for such benefits (because it does not require substantial renovation), the region itself may see substantial inflows of investment and development capital as a result of this legislation.

Documents

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Offering Agreement Documents

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