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OFFERING MEMORANDUM

CLIMATE CONTROLLED INDUSTRIAL PROCESSING PLANT Absolute Bonded | Refrigerated/ Freezer Cold Storage Facilty

Moving Capital , Making Markets , Maximizing Value S&P ”A” Rating Newnan, Georgia (Atlanta MSA) Moving Capital , Making Markets , Maximizing Value INVESTMENT ADVISORS:

BRETT J. CHETEK Senior Director Miami Office Office: (786) 522-7091 Cell: (314) 775-4285 [email protected] ALEX R. PEREZ Senior Director St. Louis Office Office: (314) 889-2517 Cell: (314) 598-1469 [email protected] CHRIS GARAVAGLIA Senior Investment Advisor St. Louis Office Office: (314) 889-2562 Cell: (314) 941-4377 [email protected] RYAN BRIGGS Senior Financial Analyst Miami Office Office: (786) 522-7126 Cell: (314) 540-1421 [email protected]

2 INVESTMENT OVERVIEW ABSOLUTE NNN BONDED LEASE PRICING DATA 33 Dart , Newnan, Georiga 30265 Total Rentable Square Footage: 104,880 Lease Structure: Absolute Net

The Chetek Group of Marcus & Millichap, as which enables the to stay fresh for 18-days. Lease Commencement: 8/28/1998 exclusive advisor, is pleased to present the The meat is then packaged within a central facility unique opportunity to acquire 100% fee-simple in the Property and delivered directly to Walmart *Lease Expiration: 5/31/2029 interest in a 104,880 square-foot state-of-the- where it is ready to be placed into the display Year-1 Net Operating Income: $653,952 art climate-controlled meat processing, packing, case by any employee. Case-Ready packaging and plant (“The Property”) absolute eliminates the need for unionized butchers thus Cap Rate: 5.36% net leased to , Incorporated (“Cargill”) – the making it extremely profitable for grocers and largest privately-owned corporation in the US. improves their ability to keep meat products Price: $12,200,000 Cargill has a S&P “A” credit rating. The Property consistently in-stock for customers. The Case- Price Per Square Foot: $116.32 is located in the Atlanta, Georgia MSA – 20-miles Ready meat market is driven by Walmart, which from Atlanta International Airport, the busiest sells only Case-Ready meat in its more than 3,500 Rent Increases: 2% Annually airport in the world. The Atlanta, Georgia MSA Supercenters and 700 Neighborhood Markets *Pricing analysis assumes NOI as of 10/1/2018, which aligns with the effective date of the new 11-year renewal base rent schedule. Actual is the 9th largest in the US and the city is in the nationwide. year-1 NOI to be realized by Buyer in accordance with a projected closing date of 7/1/2018 as follows: $720,796 (a 5.54% cap rate). midst of a population boom. The institutional quality property was a build- PROPERTY DATA Cargill recently renewed their fully bonded to-suit for Cargill in 1998. Between 2010 and lease for 12-years, which includes 2% annual rent 2016 Cargill spent $16,543,000 on major capital Type: STNL Climate Controlled Processing & Packaging Plant increases. Projecting a July 31st, 2018 close there improvements such as – removing the width- Year Built: 1998 will be 10.9-years remaining of lease term, with wise production lines and replacing them with one 5-year renewal at fair market value rent. new state-of-the-art lengthwise production lines, Year Renovated/Upgraded: 2014 TCargill is currently paying is $6.20 PSF. Cargill’s specific for Walmart. The Property is in excellent rent is currently $3.30 Below Market. There is condition. 2010-2016 Tenant Improvements: $16,543,000 (Paid Entirely By Tenant) significant upside when the lease comes due Land Area: 12.58 Acres 5/31/2029 because the option is at a FMV rent Climate-controlled processing plants are some of determined by landlord. the best cost segregation real estate asset classes Refrigerated Area: 76,317 to own, resulting in major tax shelters. The Property is one of seven Cargill Case-Ready Office/Finished Area: 24,801 meat processing and packaging plants in North Cargill Incorporated, based in Minneapolis, Clear Height: 32 feet America and this plant exclusively services Minnesota, is the largest privately-owned Walmart throughout the Southeastern U.S. The company in the US and third largest in the world. Parking: 358 spaces property operates 24 hours a day, 365 days a Cargill’s diversified operations encompasses some year, utilizing 3 shifts with over 500 full-time 155,000 employees in more than 70 Countries and Outbuildings: One Steel Structure - 1,500 SF employees. This plant is the most technologically boasted revenue of $110 Billion in 2017. advanced of the seven with the latest production lines and Case-Ready improvements. The highly The property is being offered free and clear of specialized Case-Ready utilized at debt at a 5.36% cap rate totaling $12,200,000. CARGILL INC. IS: the property involves high-tech production lines #1 LARGEST PRIVATELY OWNED CORPORATION IN THE . #3 LARGEST PRIVATELY OWNED CORPORATION IN THE WORLD.

3 INVESTMENT OVERVIEW Located in Atlanta, Georgia MSA - 20-Miles from Atlanta International Airport, the World’s busiest airport, and 30-MIles from downtown Atlanta.

4 INVESTMENT OVERVIEW 5 INVESTMENT OVERVIEW INVESTMENT HIGHLIGHTS

» 104,880 square-foot state-of-the-art climate- » The lease includes 2% annual rent increases. controlled meat processing, packing, and distribution plant Absolute NNN leased to Cargill, Inc. – the largest Since 2010, Cargill has spent $16,543,000 on privately-owned corporation in the US, and the 3rd » major capital items including converting the largest in the world. production lines to suit Walmart’s specifications. CASE-READY | OVERVIEW

The Property is one of seven Cargill Case-Ready » Pursuant to a recent lease comparable meat processing and packaging plants in North » appraisal, the market rental rate for this America and this plant exclusively services Walmart building is $9.50 PSF. Cargill is currently paying Case-ready meats entered the meat has resulted in a growing percentage of total meat throughout the Southeastern U.S. This plant is the is $6.20 PSF. Cargill’s rent is currently $3.30 merchandising market in the late 1990s and early purchases being selected at the case, along with most technologically advanced of the seven with Below Market. There is significant upside when its the latest production lines and Case-Ready 2000s. Fast forward to 2018 and it’s difficult to find the number of shoppers who exclusively purchase the lease comes due 5/31/2029 because the improvements. a concept that does not have a meat from the case. The counter has morphed option is at a FMV rent determined by landlord. department which includes both the traditional into a destination for special occasions, a specialty The Property’s is over 75% climate-controlled » Corporate Guarantee from Cargill Inc. The service counter staffed by butchers, as well as self- cut, or a specialty amount. The case has become a with its ammonia system is routinely » Lease includes an additional Lease Guarantee serve cases filled with the growing size and variety destination for all routine purchases. maintained at 26 to 32°F. The system is capable of Instrument. Cargill, Inc. has a S&P “A” Credit of case-ready offerings. maintaining temperatures ranging from -15°F to 0°F. Rating. 2017 Revenue of $110 Billion. The climate controlled equipment is owned by the For branded case-ready products – including landlord. The emergence of case-ready meats has traditional products as well as organic, natural or Climate controlled industrial processing » significantly altered the selling and buying of fresh otherwise value-added items – the package has plants are the best cost segregators in all real The Property processes 1 million pounds of meat. Reflecting trends in the industry, small and gone beyond the important function of ensuring » estate classes, resulting in major tax shelters. beef a week and is ramping up to do 1.5 million mid-size processors are quickly adding case-ready quality, safety and integrity. To that end, the pounds a week; a 50% increase in output. This 150 Year Old Company | 155,000 Employees programs while larger companies are expanding package is also a billboard, providing information is accomplished through the existing footprint » in 70 Countries. their existing case-ready operations. The growth and conveying the look and message of the brand. without expansion and through creative and processing technology. of case-ready fresh meats and the greater variety In general, package are becoming cleaner » Priced significantly below replacement cost offered in the retail meat department allows for and more attractive and really focus on attributes of $150-$170 PSF. » The Property was a build-to-suit for Cargill processors, retailers, and consumers to make that people care about, like “organic”, “grass fed”, in 1998. In 2017 Cargill renewed their lease for decisions on product mix based on their increasingly “locally grown”, etc. Processors are now able to take 12-years. Projecting a July 31st close, there will be variable needs and demands. The longer advantage of packaging in different ways through 10.9-years remaining on their bonded lease. allows retailers the capability of merchandising process and they’re also able to keep these larger varieties of cuts that would have better of product through QR bar codes. Case- Atlanta boasts one of the country’s largest concentrations of air transportation, historically been avoided because of both shrink ready is also continuing to build on a reputation as a , and warehousing operations - making trade, transportation and utilities the and cutting complexity. Additionally, the consistent safer alternative to the meat counter. dominant employment sector, 22% percent of jobs. quality and convenience of shopping the meat case

6 INVESTMENT OVERVIEW TOAL REFRIDGERATED FINISHED AREA DESCRIPTION AREA SF AREA SF ARE SF RECEIVING 16,024 16,024 - PROPERTY Receiving 2,122 2,122 - Raw Materials Cooler 9,102 9,102 - DESCRIPTION Dry Storage 4,800 4,800 - PRODUCTION 37,115 37,115 - » IMPROVEMENTS DESCRIPTION: » CLIMATE-CONTROLLED SYSTEM: Processing/Packaging 36,400 36,400 - The Property’s improvements are comprised of one The Property’s Ammonia refrigeration system is Handwashing Vestibule 715 715 - single-tenant cold storage/food production building routinely maintained at 26 to 32 degrees Fahrenheit. and one maintenance outbuilding. The subject The system is capable of maintaining temperatures SHIPPING 21,538 21,538 - property is unique in that it exhibits a mixture of in the range of -15 to zero degrees Fahrenheit. As Finished Products Warehouse 18,890 18,890 - uses and components, including climate-controlled shown in the area breakdown, approximately 72.8% Shipping Dock 2,040 2,040 - food production area, cold storage area and of the subject consists of climate-controlled area. climate-controlled shipping and receiving areas. The climate-controlled area may be further broken Inedible Dock 608 608 - Furthermore, the Property’s current configuration is down between (a) typical cold storage area, which adaptable and it could rather easily be converted to SUPPORT 7,992 1,640 270 reflect that of a more traditional cold storage facility. includes refrigerated warehousing space, raw Compressor Room 1,640 1,640 - For example, the climate-controlled production material coolers and refrigerated shipping/receiving areas possess a drop ceiling resulting in a 15-foot docks, and (b) climate-controlled food processing/ Electrical Room 800 - - clear height. In order to increase the amount of production area. Overall, the more traditional cold Maitenance 2,440 - - traditional cold storage area, the drop ceiling could storage area represents 37.4% of overall building be removed resulting in 32-foot clear height. area, whereas the food processing/production area Sanitation 616 - - represents 35.4% of overall building area. Kemco 476 - - Q/A Lab 1,200 - - Laundry 550 - - USDA 270 - 270 EMPLOYEE WELFARE 13,458 - 15,778 Cafeteria (seat count: 402) 4,418 - 4,418 Lockers/Toilets (locker count: 524) 4,160 - 4,160 Training Room (mezzanine) 1,280 - 3,600 Other 3,600 - 3,600 OFFICES 8,753 - 8,753 Production Office 403 - 403 Circulation 850 - 850 Administrative Offices 7,500 - 7,500 TOTALS 104,880 76,317 24,801

7 INVESTMENT OVERVIEW RECENT IMPROVEMENTS

Recent improvements to the Property consisted of an extensive Walmart production line conversion totalling $7.7 Million as well as, processing line floor area, shipping dock upgrades, welding exhaust renovations and roof railing. In addition other major improvements contributed by the tenant to the Property include:

• Patting • Vemags • KABOB Machine • Walmart Conversion • Line 30 Floor • ID Tech labeler • Remote Panelview

PROJECT NAME PROJECT COST

FY2010 Patty Machine $2,074,000 FY2011 Vemags $1,427,000 FY2012 Kabob Machine $765,000 FY2013 Walmart Conversion $7,707,000 FY2014 Line 30 Floor $2,871,000 FY2015 ID Tech Labeler $1,277,000 FY2016 Remote Panelview $422,000

Total $16,543,000

8 INVESTMENT OVERVIEW PROPERTY DESCRIPTION

» YEAR BUILT/ RENOVATED: » : The Property was built in 1998 and renovated in Tilt-up concrete wall panels of 3,000 p.s.i. concrete. 2014. » ROOF SYSTEM: » BUILDING AREA: Insulated standing seam metal roof. Roof joist has a 104,880 Square Feet. metal deck with insulated panel. » CLEAR HEIGHT: » FLOORING: 32 feet in the storage area. 15 feet in the production Concrete floors with plasticized polymer sealer and area. colorplete hardener added in production areas. » STORIES: » FOUNDATION: One Story. 6” concrete slab on grade. » FAR: » FINISHED AREA: 0.195, floor-to-area ratio. Painted concrete block walls and drywall. Drop acoustical ceilings. Carpeted floors and sealed » FOUNDATION: tile floors. 6” concrete slab on grade. AMENITIES: DOCK HIGH DOORS: » » Fitness center, small medical office, cafeteria, 8 total dock high doors. 6 cold storage and 2 dry training rooms and outdoor recreational areas. storage. » LIGHTING: LED lighting. » MAINTENANCE OUTBUILDING: One steel maintenance structure containing 1,500 SF. The structure is 30’x30’x18’ resulting in a 900 SF building footprint and includes a 30’x20’ mezzanine area. Constructed in 2007.

9 INVESTMENT OVERVIEW LEASE SUMMARY

GLA % LEASE DATES PAYMENT DATES MINIMUM RENT RECOVERIES TENANT OPTION NOTICE SHARE START END START END ANNUAL QUARTERLY PSF CAM TAXES INS.

CARGILL 104,880 8/28/98 5/31/29 1/6/18 9/30/18 $917,328.00 $229,332.00 $8.75 Absolute Net 100% 10/1/18 9/30/19 $649,952.00 $162,488.00 $6.20 33 DART ROAD 10/1/19 9/30/20 $662,948.00 $165,737.00 $6.32 NEWNAN, GA 30265 10/1/20 9/30/21 $676,208.00 $169,052.00 $6.45 10/1/21 9/30/22 $689,732.00 $172,433.00 $6.58 DEPOSIT: 10/1/22 9/30/23 $703,528.00 $175,882.00 $6.71 GUARANTOR: Cargill Incorporated 10/1/23 9/30/24 $717,596.00 $179,399.00 $6.84 10/1/24 9/30/25 $731,948.00 $182,987.00 $6.98 10/1/25 9/30/26 $746,588.00 $186,647.00 $7.12 10/1/26 9/30/27 $761,520.00 $190,380.00 $7.26 10/1/27 9/30/28 $776,752.00 $194,188.00 $7.41 10/1/28 5/31/29 $792,284.00 $198,071.00 $7.55 6/1/29 5/31/34 - - Fair Market Value - - Option #1 1/2/28

*Pricing analysis assumes NOI as of 10/1/2018, which aligns with the effective date of the new 11-year renewal base rent schedule. Actual year-1 NOI to be realized by Buyer in accordance with a projected closing date of 7/1/2018 as follows: $720,796 (a 5.54% cap rate).

RENTAL: REPAIRS & MAINTENANCE; REPLACEMENT: Base rent is paid quarterly on the 1st day of each January, April, July, and October. Tenant is responsible for all costs and Tenant shall, at its sole cost and expense, keep the Premises in good order and condition, at all times during the Term. Tenant expenses in connection with the management, operation, maintenance and repair of the Premises. Landlord shall have no shall promptly and adequately repair the Premises and all its component parts, and replace or repair all landscaping and all obligations or liabilities whatsoever with respect to the management, operation, maintenance, and repair of the Premises. damaged or broken fixtures (including Tenant’s trade fixtures) and appurtenances, including but not limited to: parking lot Notwithstanding the foregoing, throughout the term of lease, Tenant shall pay, as Additional Rent, all premiums for all surface and stripes, mechanical systems, electrical and lighting systems, and sewage systems, roof, foundations property and liability covering the Premises carried by Landlord, all Property Taxes that accrue during the term. and floor slabs, glazing systems, structural steel, masonry walls and wall enclosures, and water tightness of all curtain walls. Tenant pays a fixed $1,000 administrative fee every quarter. It is intended by Tenant and Landlord that Landlord shall have no obligation, in any manner whatsoever, to repair or maintain the Premises, whether structural or nonstructural, all of which obligations are intended to be those of Tenant. NET LEASE: This is an absolutely net lease. It is the intention of the parties that the Fixed Rent shall be an absolutely net return to Landlord throughout the Term. RENEWAL OPTION: Tenant has one - (5) year option; 17 months’ notice; rent to be determined in accordance with Fair Market Value as determined UTILITIES: by Landlord. Tenant shall supply and pay for any utilities servicing the Premises at its sole cost and expense.

OPTION TO PURCHASE: Tenant has one-time option to purchase the Premises for the (“2029 Purchase Price”); Fair Market Value as determined by Landlord; notice required by no later than 1/2/2028.

10 FINANCIAL ANALYSIS SUMMARY OF COMPARABLE INDUSTRIAL COLD STORAGE

% CLIMATE CURRENT NO. PROPERTY NAME/LOCATION BUILDING AREA YOC CLEAR HEIGHT LEASE TERM EXEC. YEAR OCCY. RENT STEP COMMENTS CONTROLLED LEASE RATE/SF

Single-tenant facility. Lease rate is based on a master lease agreement across a national cold storage portfolio, which was "20 $7.88/SF “2.5% 1 LINEAGE MACON, GA 135,102 1991 74% 30' 2014 100% established as the market absolute lease rate as determined by YEARS" NNN annually” an appraisal of the facility. Near Interstates 75 and 16 in Central Georgia. Base lease rate of $7.50/SF which commenced in 2014.

Single-tenant. 100% leased at $8.17/SF on a NNN basis - sale/ "12.5 $8.66/SF "6% every 2 GLAZIER FOOD COPPELL, TX 281,813 1998 75% 30' 2013 100% leaseback transaction. Base lease rate of $8.17/SF which com- years" NNN 3 yrs" menced in 2013.

"Single-tenant facility. 100% leased on a NNN basis - sale/lease- "10+ $9.02/SF "2.0% back transaction. Located within strong and 3 AMERICOLD GAINESVILLE, GA 127,632 1989 75% 30' 2013 100% years" NNN annually" processing market. Base lease rate of $8.50/SF which commenced Sept. 2013."

"Single-tenant facility. 100% leased on a NNN basis - sale/lease- "10+ $10.16/SF "2.0% back transaction. Located within strong poultry farming and 4 AMERICOLD PENDERGRASS, GA 243,233 1996 85% 34' 2013 100% years" NNN annually" processing market. Base lease rate of $9.58/SF which commenced Sept. 2013."

$11.73/SF Tenant purchase for owner-occupancy. Cited lease rate reflects 5 FRESH EXPRESS GRAND PRAIRE, TX 113,000 2000 75% 32' N/A 2016 100% N/A NNN the in-place rental rate at the time of the sale.

"Single-tenant facility. 100% leased on a NNN basis - sale/lease- "10+ $12.47/SF "2.0% back transaction. Located within strong poultry farming and 6 AMERICOLD CARTERSVILLE, GA 179,240 1998 95% 30'-35' 2013 100% years" NNN annually" processing market. Base lease rate of $11.75/SF which commenced Sept. 2013."

"The subject is fully leased to Cargill Inc. through May 2029. Ammonia system with capability to maintain temperatures $6.20/ SF “2.0% as low as -15° Fahrenheit. 32' clear height in cold storage "SUBJECT - CARGILL INC. NEWNAN, GA" 104,880 1998 73% 32' 11 YEARS 2017 100% NNN annually” area and 15' clear height in food production area. The food production area has drop ceilings and clear height may be increased to 32' if drop ceiling removed."

The Current Rent For The Property Is $6.20 PSF. The Market Rent For The Property Is $9.50 PSF NNN, Valadated by a Refrigerated/Freezer/Cold Storage Appraiser Cargill’s Rent Is Currently $3.30 PSF Below Market.

11 FINANCIAL ANALYSIS Cargill, Inc., is a global corporation based in TENANT PROFILE: Minneapolis, Minnesota, and is the largest privately held company in America by revenue. The company Tenant Name: Cargill Inc. has held this top ranking for nearly 35 consecutive years since Forbes began the list, having Headquartes: Minnetonka, MN fallen to the 2nd position only once in this timeframe. : www.cargill.com If it were a public company, it would rank number 12

on the Fortune 500 based on 2016 metrics. It was Private founded in 1865 and celebrated its 150th anniversary in 2015 with $120.4 Billion in revenue. Area Served: Worldwide; 70+ Countries

Cargill’s diversified operations include grain, cotton, Founded: 1865 sugar, and petroleum trading; financial trading, food Revenue (2017): $110 Billion processing; futures brokering; and feed and production. Cargill accomplishes this through Credit Rating: S&P “A” 150,000 employees in more than 1,000 locations in 70 countries. The company is the leading grain Ownership: Private producer and exporter in the US, and its Meat # of Employees: 155,000 Solutions division is one of the top US meatpackers. Cargill’s brands include Diamond Crystal (),

Along with its grain and meatpacking businesses, Cargill is a trader and top producer of animal feed and crop . It is also a global supplier of , syrups, , and other products used in food processing.

12 TENANT OVERVIEW With speed and conviction, Cargill is taking action to achieve results that help others thrive. Our purpose is to nourish the world in a safe, responsible and sustainable way. We are the food system closer together through insights and that accelerate impact.

FINANCIAL PERFORMANCE We reached $3.04 billion in adjusted operating earnings in fiscal 2017, an 85 percent increase year-on-year Net and adjusted operating earnings with gains across all four business segments. Net earnings on a U.S. GAAP basis rose 19 percent to $2.84 DOLLARS IN MILLIONS | • NET EARNINGS • ADJUSTED OPERATING EARNINGS

billion. Revenues grew 2 percent to $109.7 billion on higher of grain, oilseeds and metals. Cash flow from $3,000 operations climbed 38 percent to $4.69 billion.

$2,000 These broad-based gains were accomplished in a period of mixed macroeconomic trends for . A

fourth consecutive year of strong crop yields worldwide led to large surpluses, low commodity prices and little $1,000 volatility. Despite solid demand and robust movement of crops along supply chains, stocks continued to build

at both origin and destination. $0 2013 2014 2015 2016 2017

SEGMENT RESULTS Animal Nutrition & Protein was the largest contributor to Cargill’s adjusted operating earnings, with results lifted by exceptional performance in global protein. Results were buoyed by customer-focused strategies with a shift toward value-added products. Renewed consumer demand for beef also created favorable market conditions in North America. Animal nutrition earnings came in just above the prior year, as feed demand in Momentum many countries was buffeted by a mix of environmental and market factors. Cargill is leading in a rapidly evolving landscape. Customers, farmers and Achievements this year need a bold Established a new Reshaped the Provided training Mapped 166 million The fair value of partner with a broad view strategic direction, in adjusted operat- business portfolio to more than hectares across Cargill stock, which identifying and ing earnings, with through $1 billion of 650,000 farmers on about 1,900 Cargill is independently and deep insights. Around strengthening all four segments investment in stra- agricultural best sourcing areas valued on a quar- capabilities that will reporting year-on- tegic acquisitions, practices to raise worldwide to estab- terly basis, reached the globe, our passion is set us apart as we year gains. joint ventures, and productivity and lish a baseline for a record high on serve our customers new and expanded protect the planet. measuring progress May 31, 2017. translating their goals into and partners. facilities, as well in eliminating defor- as $700 million estation from our solutions. Each day, we are of divestitures in supply chains. advancing new possibilities. non-strategic assets.

13 TENANT OVERVIEW MARKET OVERVIEW

ATLANTA , GEORGIA

14 CARGILL INC. | ATLANTA MSA ATLANTA GEORGIA Metropolitan Statistical Area - Market Overview

Distribution and logistics companies continue to be ATLANTA HIGHLIGHTS: attracted to Atlanta amid limited new construction, which has continued tightening vacancy in the metro industrial market. Industrial space in metro Atlanta » Heavy concentration of headquarters. is currently in high demand. The metro area is a key Atlanta ranks fifth in the nation in the number of logistics hub because of its world-leading airport, Fortune 500 headquarters with 18, including UPS, rail and road infrastructure and proximity to a major Coca-Cola, Delta Air Lines and SunTrust . seaport. Atlanta and the Southeast are also in the midst of a population boom. Locating logistics hubs » High median household income. in high-density markets speeds up turnaround time The metro’s annual median household income of and reduces costs. $59,000 places it above the U.S. level of $56,100.

As mentioned above, the Atlanta area benefits from » Low costs of living and doing business attract jobs. the nearby of Savannah, which is the fourth A pro-business environment and affordable home busiest port in the nation. Port activity will continue prices helped Atlanta rise to fourth in the nation in job to increase in coming years as plans move forward to creation last year. deepen the Savannah to better accommodate larger shipping vessels. These factors have motivated retailers, manufacturers and logistics companies to relocate to the Atlanta metro. McMaster-Carr, TJX Cos., Procter & Gamble, and Kroger are all currently expanding their local footprint and building new facilities within the metro Atlanta area.

Recently the Atlanta metro area has seen a growing population with disposable income, which has lead to increased leasing in the industrial market from the and high-end home tenants. Logistics and e- companies have also been leasing-up space in the metro market, as both of those sectors saw an uptick in sales in 2016.

The market has posted positive annual net absorption in every year since 2011. Rental rates have increased in each of the last four years, due to decreasing vacancy rates and positive absorption levels.

15 MARKET OVERVIEW | ATLANTA, GEORGIA TRANSPORTATION AND TECHNOLOGY Atlanta’s infrastructures rank among the largest and most efficient in the world

METRO: The Atlanta metro is home to more than 5.6 million » AIRPORTS : residents. From 2010 to 2015, the population rose • Hartsfield-Jackson Atlanta International Airport • Six reliever airports by 351,100 people. In the coming five years, annual population growth will flourish even more rapidly with MAJOR ROADWAYS : the addition of 481,600 people. Fulton is the most » • Interstates 20, 75, 85, 285 and 575 populous county in the metro with 1 million residents. Atlanta is the largest city, with 465,200 citizens. » RAIL : • Freight - CSX, Norfolk Southern INFRASTRUCTURE: • - Amtrak Atlanta’s extensive and well-developed transportation • Commuter - MARTA network is a key competitive advantage. Hartsfield- Jackson Atlanta International Airport is the busiest » THE ATLANTA METRO IS: passenger airport in the world. It is also home to Delta • 250 miles from Savannah • 640 miles from Washington, D.C. Air Lines and a major hub. • 720 miles from Chicago • 790 miles from Dallas The metro’s extensive road, rail and airport systems and its proximity to the Port of Savannah ensure its status as the pre-eminent distribution hub for the Southeast. CSX and Norfolk Southern provide rail connections nationally through five intermodal yards.

The Metropolitan Atlanta Rapid Transit Authority (MARTA) operates train and bus service throughout the region; its system contains dozens of train stations running on four lines with a link to the airport and around 125 bus lines. The Atlanta Regional Commission is embarking on an exciting new initiative that will provide major transportation system improvements including expanding passenger rail lines and developing a new regional bus service.

16 MARKET OVERVIEW | ATLANTA, GEORGIA DIVERSIFIED ECONOMY Well Positioned For Continued Economic Growth

The Atlanta economy is thriving, with both gross ATLANTA MAJOR EMPLOYERS metropolitan product (GMP) and retail sales Delta Air Lines 31,699 progressing above national levels. The metro ranks Emory /Emory Healthcare 26,026 high in the nation for Fortune 500 headquarters The Home Depot 25,000 and serves as a financial hub for the Southeast; it WellStar Health System 20,000 is home to SunTrust and the Federal Reserve AT&T 17,000 Bank of Atlanta. UPS 16,231 Northside 14,577 Many companies favor Atlanta for its low corporate Piedmont Healthcare 12,906 taxes, pro-business climate, and access to national and global markets. The metro boasts one of the Marriott International 12,000 country’s largest concentrations of air transportation, Publix Super Markets 9,755 cargo and warehousing operations, making Georgia State University 9,422 trade, transportation and utilities the dominant Center for Disease Control & Prevention 9,151 employment sector. Cox Enterprises 8,269 Southern Company 7,800 Atlanta is also an exceptional business and Children's Healthcare of Atlanta 7,208 government center. Numerous governmental and SunTrust Bank 7,128 educational entities are based in Atlanta, including State Farm 7,000 the Centers for Disease Control, the Federal Reserve Georgia Institute of Technology 6,860 District Six and more than 30 accredited higher Grady Health System 5,999 learning institutions. Technology-focused R&D Bank of America 5,552 programs and facilities at the boost Turner System, Inc. (TBS) 5,421 high-tech employment. Lockheed Martin 5,400 Gwinnett Medical Center 4,856 Media outlets have an immense presence in Kennesaw State University 4,813 Atlanta with CNN headquartered in the city, Verizon Communications Inc. 4,349 along with Turner Broadcasting System, Cox Wells Fargo 4,253 Communications and The Weather Channel. Five Georgia Power Company 4,154 local media production companies have aided in MARTA 4,144 the establishment of the prosperous , DeKalb Medical 4,066 which now has a statewide economic impact of $5.1 Comcast Cable Communications 4,016 billion annually. Veterans Affairs Medical Center Atlanta 4,006 Allied Universal 3,500

17 MARKET OVERVIEW | ATLANTA, GEORGIA MAJOR EMPLOYERS Other major employers include transportation Atlanta is one of the nation’s leading business companies such as Southwest and Delta Air centers. In total, 18 Fortune 500 companies call the Lines, which has a local payroll of more than 27,000 metro their headquarters, and many of the world’s workers. Many of the transportation jobs are located most recognizable companies have a substantial at Hartsfield-Jackson Atlanta International Airport. presence in the metro. Large employers include Delta, Home Depot, (UPS) and Telecommunications companies in the metro Cox Communications. Among these, both UPS and include AT&T, CNN and Cox Communications. The Cox chose to relocate to Atlanta to take advantage area also hosts a growing biotechnology industry, of the high-quality workforce, a low cost of doing and defense manufacturer Lockheed Martin is business and a well-developed transportation located in Marietta. infrastructure. Mercedes-Benz is in the process of moving their headquarters to Atlanta, adding Atlanta has the largest concentration of government hundreds of employees and State Farm will anchor and financial offices in the Southeast, including the the largest corporate office project in the metro. State of Georgia, Centers for Disease Control and When completed, the 2.2-million-square-foot SunTrust Banks. It also has many population-serving mixed-use project in Dunwoody will house 8,000 employers, such as American Cancer Society, STRONG LABOR FORCE employees. WellStar Health Systems and Emory University. Through 2020, all major employment sectors will expand

For the last five years, nonfarm employment in the The professional and business services industry Atlanta metro has consistently averaged higher growth accounts for 19 percent of local jobs and is projected per year than the U.S. In the coming five years, this trend to post annual gains of 2.8 percent through 2020. will continue as Atlanta posts an average 2.0 annualized Expansion in this sector will fuel the need for office growth rate, exceeding the national average of 1.3 space. and health services employment also percent annually. With the existing employment base continues to escalate as the population rises. This sector totaling more than 2.6 million positions, job growth will currently provides nearly 321,800 jobs and is expected sustain an expanding economy. to average 3.1 percent annual growth in the coming five years. Currently, the largest share of metro employment is represented by the trade, transportation and utilities During this period, all sectors will expand, but the sector, which comprises 22 percent of jobs. The sector fastest employment growth will be in construction. The derives its strength from the region’s position as the sector will add jobs at an annual pace of 3.8 percent as primary distribution hub for the Southeast; numerous new housing starts increase and major developments, large companies have office and warehouse facilities such as facilities for the Atlanta Braves and Atlanta in the area. Employment in trade, transportation and Falcons, proceed. utilities is expected to expand at an average rate of 1.6 percent annually over the next five years.

18 MARKET OVERVIEW | ATLANTA, GEORGIA QUALITY OF LIFE The Atlanta metro features a surging business The metro has several acclaimed cultural institutions, environment and modern infrastructure while providing including Zoo Atlanta and the High Museum of Art. and attractions in a safe and comfortable Central Atlanta continues its urban renaissance with an . With its genuine Southern hospitality, abundance of , and entertainment Atlanta boasts a lifestyle that attracts many people. venues, including the Atlanta Symphony Orchestra and Affordable housing lowers the average cost of living, the Atlanta Ballet. The Georgia Aquarium, the National allowing citizens to lead prosperous lives in the region, Center for Civil and Human Rights, the College Football whether in a rural or urban setting. Hall of Fame and the World of Coca-Cola museum are all located downtown in Centennial Park. Outdoor and sports enthusiasts will find plenty to enjoy. Mild weather year-round beckons residents to hike and More than 30 institutions of higher learning call Atlanta bike on the many trails in and around Atlanta. Atlanta is home, including Emory University, Georgia Institute of also home to professional sports franchises in the NFL, Technology and Spelman College. MLB, NBA and WNBA.

DEMOGRAPHICS Through 2020, all major employment sectors will expand

Atlanta’s emergence as a world-class business center least a bachelor’s degree, up from 31 percent in 2000. and the population shift to Sun Belt areas continue to Job quality has also increased, as reflected in a median drive population growth. The metro is ranked among household income of nearly $59,000 per year, above the nation’s top 10 largest, and will exceed 6 million the national median of $56,100 annually. residents by 2019. In the coming five years, the rise in household income Many of the young people who move to Atlanta for will outpace a tick up in home prices. This trend employment have chosen to remain in the region and should expand the homeownership rate in the metro. have families. This has lowered the median age to 35.6 Atlanta home prices are among the most affordable of years, which is younger than the U.S. median. More Southeastern cities, with a median price of $175,900. than 62 percent of residents are in their working years, This has contributed to a homeownership rate of 64.2 and seniors comprise just 10 percent of the population. percent, slightly higher than the national average.

Educational attainment is high, as 34.6 percent of the local population age 25 and older have obtained at

19 MARKET OVERVIEW | ATLANTA, GEORGIA ATLANTA MARKET OUTLOOK Demand Continues to Drive Expansion

Employment growth in the Atlanta metro has market, scooping up local portfolios at attractive sparked swelling demand for industrial space, as discounts to individual property values. Distribution local and regional users are growing in lockstep and high-clearance facilities will be of keen interest with the expanding local economy. Large national this year as investors position for additional growth warehouse and distribution center tenants in the e-commerce market after Amazon and Wal- are thriving as well, creating robust operating Mart announced their intentions to expand in the conditions in the sector. The stabilization of the city. Particular areas of interest will include the economy has encouraged a resumption of growth airport and locations in the northern section of the and Atlanta figures strongly into the corporate metro with easy access to transportation routes. expansion plans of Google, Office Depot and Exel, which each recently signed leases at or above 400,000 square feet. Strong market conditions have driven developers to expand the construction pipeline dramatically, focusing primarily on high- traffic and -demand areas such as the Airport/North Clayton and I-20 West/Douglasville submarkets. As a result, new industrial completions will outpace net absorption for the first time in several years. Despite the increased pace of development, most of the new space is pre-leased, reducing the upward pressure on vacancy from speculative projects. These headwinds will be unable to sideline rent growth, however, allowing asking rents to rise for the third straight year.

Cheap access to credit and the desire to deploy capital before the Federal Reserve raises interest rates have been motivating investors to bid up Atlanta industrial assets. Combined with greater access to debt financing, institutional capital in the metro fostered an accelerated volume of deals over the past year, with investors quickening the pace through the first quarter of 2018. Large corporate buyers have been active at the high end of the

20 MARKET OVERVIEW | ATLANTA, GEORGIA CONFIDENTIALITY AND DISCLOSURE

STNL PACKAGE DISCLAIMER Marcus & Millichap hereby advises all prospective purchasers of Single Tenant Net Leased property as follows: The information contained in this Marketing Brochure has been obtained from sources we believe to be reliable. However, Marcus & Millichap has not and will INVESTMENT ADVISORS: not verify any of this information, nor has Marcus & Millichap conducted any investigation regarding these matters. Marcus & Millichap makes no guarantee,

BRETT J. CHETEK warranty or representation whatsoever about the accuracy or completeness of any information provided. As the Buyer of a single tenant property, it is the Senior Director Buyer’s responsibility to independently confirm the accuracy and completeness of all material information before completing any purchase. This Marketing Miami Office Brochure is not a substitute for your thorough due investigation of this investment opportunity. Marcus & Millichap expressly denies any obligation Office: (786) 522-7091 to conduct a due diligence examination of this Property for Buyer. Any projections, opinions, assumptions or estimates used in this Marketing Brochure are for Cell: (314) 775-4285 [email protected] example only and do not represent the current or future performance of this property. The value of a single tenant property to you depends on factors that should be evaluated by you and your tax, financial and legal advisors. Buyer and Buyer’s tax, financial, legal, and construction advisors should conduct a careful, ALEX R. PEREZ independent investigation of any single tenant property to determine to your satisfaction with the suitability of the property for your needs. Senior Director St. Louis Office Like all real estate investments, this investment carries significant risks. Buyer and Buyer’s legal and financial advisors must request and carefully review all legal Office: (314) 889-2517 Cell: (314) 598-1469 and financial documents related to the property and tenant. While the tenant’s past performance at this or other locations is an important consideration, it is [email protected] not a guarantee of future success. Similarly, the lease rate for some properties, including newly-constructed facilities or newly-acquired locations, may be set based on a tenant’s projected sales with little or no record of actual performance, or comparable rents for the area. Returns are not guaranteed; the tenant and CHRIS GARAVAGLIA Senior Investment Advisor any guarantors may fail to pay the lease rent or property taxes, or may fail to comply with other material terms of the lease; cash flow may be interrupted in part St. Louis Office or in whole due to market, economic, environmental or other conditions. Regardless of tenant history and lease guarantees, Buyer is responsible for conducting Office: (314) 889-2562 his/her own investigation of all matters affecting the intrinsic value of the property and the value of any long-term lease, including the likelihood of locating Cell: (314) 941-4377 a replacement tenant if the current tenant should default or abandon the property, and the lease terms that Buyer may be able to negotiate with a potential [email protected] replacement tenant considering the location of the property, and Buyer’s legal ability to make alternate use of the property. RYAN BRIGGS Senior Financial Analyst By accepting this Marketing Brochure you agree to release Marcus & Millichap Real Estate Investment Services and it harmless from any kind of claim, cost, expense, or liability Miami Office Office: (786) 522-7126 arising out of your investigation and/or purchase of this single tenant property. Cell: (314) 540-1421 [email protected] ALL PROPERTY SHOWINGS ARE BY APPOINTMENT ONLY. PLEASE CONSULT YOUR MARCUS & MILLICHAP AGENT FOR MORE DETAILS.

21 CARGIL INC. | ATLANTA MSA