EXECUTIVE SUMMARY

On behalf of Ownership, Jones Lang LaSalle America, Inc. (“JLL”) has been retained as the exclusive sales representative for Coastal Commerce Center II (the “Property”) – an infill state-of-the-art, newly completed 314,288 SF Class-A rear-load multi-tenant distribution facility located within the explosive Savannah, Georgia industrial market. Situated just 6.7 miles and only two truck turns away from Savannah’s Garden City Terminal while being seven minutes away from the pivotal I-95 & I-16 intersection, the Property is an irreplaceable location easily accessible to all of Savannah’s major logistical thoroughfares. The Property is 52.6% leased to Palmer Distribution Services Inc. with a lease term of 4.9 years and 4% annual escalations, providing strong in-place cash flow along with significant additional upside once fully leased to 1 or 2 additional tenants.

Savannah’s industrial market fundamentals are among the best in the country, driven by the Port’s record high cargo volumes, future expansion projects, and its direct connectivity to a network of logistical nodes. Savannah has experienced 9 consecutive quarters with vacancy below 5%, five consecutive quarters with market record breaking rents, one of the highest amounts of tracked tenant demand in the country (#1 as a percentage of inventory from 2022 - 2023 YTD), and a record annual net absorption of 15.3 MSF in 2022 (also #1 as a percentage of inventory).

PROPERTY SPECS

INVESTMENT HIGHLIGHTS

Class A Design

• 314,288 SF state-of-the-art multi-tenant distribution facility
• Market appropriate multi-tenant functionality with 2 existing store fronts and the ability to add an additional storefront currently, and one more in the future once the current tenant vacates
  • Flexible design can accommodate up to 4 tenants in the future and 3 immediately
• Rear load: 185' full concrete truck court 
• 36' clear height
• 171 auto spaces and 76 trailer spaces
• ESFR sprinklers
• Available suite is move-in ready with 2,481 SF spec office and 30 FOC spec lighting (can be subdivided to two units)

Financial Highlights 

• Ability to subdivide vacant space into 2 suites 
  • Significantly increase returns through high market rents with limited competing supply
  • Boost year 2 NOI by an additional $167,586 as compared to a two-tenant asset
  • Diversify rent roll and stagger rollover exposure
• In-place lease
  • Palmer Distribution Services, Inc. occupies 165,411 SF (52.6%) of the Property
  • New 5-year term
  • 4% annual escalations
  • NNN lease 

Tenant Overview - Palmer Distribution Services, Inc. 

• Over the past decade, Palmer has experienced 15% annual growth (185% cumulative)
• Primarily operates public warehouses and packaging activities
• 14 locations and operates more than 2 MSF of warehouse space

Unprecedented Industrial Market Fundamentals

• Savannah ranked first in the country for tenant demand and net absorption as a percent of market inventory
• For the 5th quarter in a row, Savannah continues to reach record high rents with $6.58 (Q2 2023)
  • 10.6% YoY growth
• Generated 32.3 MSF of positive absorption over the last 3 years
  • Over the same time period, Savannah has delivered 31.7 MSF and increased supply by 42.4%
  • Record breaking 15.3 MSF absorption in 2022 (15.6% of its total inventory)
• 9 consecutive quarters with vacancy below 5%
  • Over 40% of the reported vacancy for Q2 2023 is in lease negotiation or has been leased since the end of the quarter
• 1.82% Vacancy for buildings below 500 KSF (Q2 2023)
• Discount to competing port markets which drives new tenant demand
• 35.5% of under construction warehouse & distribution inventory pre-leased or under negotiation
  • 62% when including the 17 MSF Hyundai manufacturing plant

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