Avistone’s 1031 Exchange Investment Opportunity – Atlanta, GA

If you’re an accredited investor currently looking for a 1031 exchange property with the opportunity for monthly distributions and the potential for capital appreciation upon sale after a 3- to 5-year hold period, then investing in Avistone’s latest 1031 exchange property could meet your investment goals.

Gateway Oaks, Avistone’s latest 1031 exchange opportunity, is a multi-tenant flex/industrial park located in Marietta (Atlanta), Georgia, and provides versatile spaces for warehousing, business services and office uses.  The 152,579 SF property 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.  If you want to learn more about this 1031 exchange property, call 949.682.7216 or complete the form below.

Investment Terms

  • Minimum Investment:  $500,000 for 1031 Exchanges
  • Estimated Hold Period:  3-5 Years
  • Projected Cash Distributions:  See Offering Documents
  • Projected IRR:  See Offering Documents

Property Details

  • Square Footage:  152,179 SF
  • Land Area:  13.46 Acres
  • Occupancy:  90.97%
  • Space Layout:  85% Office / 15% Warehouse (15 Units)
  • Year Built:  1999

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Investment Highlights

  • Prime Business Location – Opportunity Zone

The property’s Marietta location is  in the center of Atlanta’s northwest flex/industrial sub-market, adjacent to I-75 and US 41 in Cobb County. The location provides linkage to the entire Atlanta metro area and to the heart of the Atlanta central business district. Downtown Atlanta is approximately 14 miles from the property.

Additionally, Gateway Oaks is located within a Qualified Opportunity Zone (QOZ) created by the new federal tax code (TJCA) to stimulate long-term investment in these zones. New businesses leasing space at the property may qualify as QOZ assets and would have the opportunity to defer capital gains on the sale of the business after five or seven years and be free from capital gains if the business is sold at a profit after 10 years.  With these tax incentives, Gateway Oaks could be appealing to owners of businesses that qualify for TCJA benefits.

  • Submarket Growth Drivers

The property benefits from its dynamic location and close proximity to the Atlanta Braves’ Sun Trust Park and Atlanta Battery, a lifestyle destination, offering a mix of modern residential options, 400,000+ square feet of retail space, entertainment and restaurant venues.[a]  In addition, Cobb County budgeted $1.25 billion to improve the County’s quality of life and to attract new businesses to the area, with $500 million already pumped into the area. Some of the new businesses attracted to the area from the county’s investment include an IKEA in Marietta, which is expected to be the second largest single retailer in the state upon its opening[b]  and Thyssenkrup Elevator’s new $240 million headquarters.

  • 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. The property is located within the Northwest Atlanta industrial sub-market, which has a vacancy rate of 3.7% for shallow bay/flex. (Source: Colliers)

  • Strong Tenant Base

The property is 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. The strong tenant base includes many high-profile tenants, including UnitedHealth Group, one of the largest healthcare companies in the world with $201 billion in revenue in 2017;[c] Georgia Department of Labor’s Georgia Vocational Rehabilitation Agency; and FirstKey Homes, which owns 14,000 homes across 24 U.S. markets and rents them to working-class families.[d] 

  • Market Presence and Expertise

The asset will be managed by Avistone Management, LLC, which currently manages four similar properties in the Atlanta market representing more than 850,000 of flex/industrial space. One property is just one mile away, creating the potential for synergistic leasing opportunities.

Gateway Oaks, a Class A multi-tenant, flex/industrial park in Marietta (Atlanta), Georgia

Investment Strategy

Avistone’s primary objectives are to operate the property efficiently, distribute 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% below 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.

Why Partner with Avistone for Your 1031 Exchange?

The experienced Avistone team manages the day-to-day leasing and management needs of the property.

Avistone has a current average distribution yield of 7% to its 1031 exchange investors.

Defer capital gains taxes after the sale of your income property by completing a 1031 Exchange into a multi-tenant industrial property.

Stabilized cash flow through in-place rents.

Properties are located in dynamic markets with strong job growth and high occupancy.

Avistone is focused on preservation of capital. Risk is mitigated by acquiring stabilized properties at a purchase price that is substantially below the property’s replacement cost.

Properties are acquired at a price that is approximately 60% to 65% of their replacement cost.

Atlanta Market Highlights

The greater Atlanta 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. (Source: Forbes, KPMG, U.S. Census Bureau)

Avistone’s Track Record

With a portfolio of 19 high-occupancy properties representing more than 2.5 million square feet of flex/industrial space in California, Texas, Georgia, Florida and Ohio, Avistone specializes in acquiring and operating stabilized multi-tenant flex/industrial properties that have the potential to deliver investors in-place cash flow for distribution and the potential for capital appreciation from increased rents and net operating income, although there is no assurance these objectives will be realized. 

Sources:

a) https://rebusinessonline.com/braves-development-signs-four-new-tenants-at-the-battery-atlanta
b) https://www.mdjonline.com/news/ikea-will-bring-new-furniture-store-to-marietta/article_752469b8-e5ca-11e7-bbbb-ff46834d9a21.html
c) https://www.nasdaq.com/article/an-overview-of-unitedhealths-2017-performance-cm910245
d) https://www.bloomberg.com/news/articles/2018-02-16/wall-street-s-home-rental-bets-shift-to-lower-end-u-s-houses

Disclaimers:

1) As of 8/1/2018; in Year 1, approximately 26.6% of leases are due for renewal.
2) The Members will be entitled to receive a preferred return in an amount equal to an 8% cumulative but not compounded annual return on their Net Capital Contributions. The preferred return is paid from cash flow from operations or sale subject to available cash flow.
3) This communication is intended solely for accredited investors as such is defined in the Securities Act, and is not intended as an offer to sell, or the solicitation of an offer to buy any securities or ownership interests. Past or projected performance does not guarantee or predict future results; all projections and estimates contained herein are subject to change any time without notice. This investment opportunity may not be available in all states. All information contained herein is in summary form, does not purport to be all-inclusive or contain all the information or risk factors a prospective investor needs to evaluate the potential investment opportunity contained herein. Any such evaluation must be considered in conjunction with the final Private Placement Memorandum (the “PPM”); the information contained herein is qualified in its entirety by such and all prospective investors are strongly encouraged to read all “risk factors” in the PPM. Further, some of the initial information provided above contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties, and investors should not rely on them as predictions of future events. The forward-looking statements included herein are based upon Avistone’s current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Although Avistone believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Property’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, assumptions pertaining to leasing rates, reimbursements, market vacancy, tenant rollover and retention percentages, capitalization rates and other assumptions which may be inaccurate. Prospective Purchasers of Interests are cautioned not to place undue reliance on any forward-looking statements contained herein. The actual results of the Project may differ significantly from the results discussed in the forward-looking statements. Avistone reserves to the right to withdraw this investment opportunity at any time for any reason without liability to any party. Investments in private securities contain a high degree of risk and often have long hold periods. They are illiquid and may result in the loss of principal. Avistone’s strategy may not occur due to numerous external influencers.
4) Commercial Real Estate is subject to risks inherent to the acquisition, management and ownership of real property, including environmental concerns, changes in economic conditions, changes in the investment climate for real estate investments, new competition, changes in the demand from competing properties, changes in local market conditions, changes in lease-up periods, changes in real estate tax rates and other operating expenses.
5) Security transactions administered by WealthForge Securities, LLC, member FINRA | SIPC. WealthForge Securities and Avistone are not affiliated.
6) Past performance may not be indicative of future results; there is no assurance that objectives will be met.
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