1600 Barberry Lane, LLC

Available for §1031 Exchange & LLC  Investment

Offering Price: $42,860,000

Price Per Unit: $137,372

  • Purchase Date: 3rd Quarter 2008
  • Offering LTV: 55.51%
  • Offering Price Cap Rate: 6.18%
  • 1st Year Cash Flow: 6.04%

1600 Barberry Lane is a 312-unit garden-style apartment community in the Atlanta suburb of Peachtree City, Georgia. Situated on nearly 26 acres, the approximately 306,000-square-foot property consists of 15 residential buildings and a separate building that houses the clubhouse and leasing center.

Available for §1031 Exchange & LLC 

The property is located in the South Fulton submarket, which led Atlanta in rent growth in 2007 with a 4.6 percent increase. This market is said to have 29,550 units

Property Highlights

  • As of June 25, 2008, the property was approximately 95 percent occupied and the manager believes that occupancy rates will remain high during the holding period.
  • The property was completed in 1998 and is in good condition. This will enable the manager to maximize rental income by performing minor upgrades to the unit interiors.
  • The manager believes that as leases renew or turn, higher rents will be achieved due to the upgrades and market conditions, including favorable forecasted rental growth rates in the submarket.
  • The property has 64 attached garages.
  • The property is favorably located in Atlanta, an area with a population of approximately 5.6 million:
  • Easy access to the Atlanta Hartsfield Airport;
  • Located in Peachtree City, a well developed community and one of Atlanta’s most sought after residential areas;

TIC Offering

  • Offering Size: $19,070,000
  • Price per 1% Ownership: $190,700 equity and $237,900 assumed debt
  • Minimum Investment per SPE: 3.00% = $572,100 equity and $713,700 assumed debt for a total purchase price of $1,285,800
  • Suitability: Accredited investors only

LLC Offering

  • Offering Size: $953,500
  • Price Per Unit: $5,000
  • Minimum Investment: $25,000
  • Suitability: Accredited investors only

Business Plan

  • Preserve the capital investment.
  • Realize income through the acquisition, operation and sale of the property.
  • Make monthly distributions, which may be partially tax-deferred as a result of depreciation and amortization expenses.
  • Within approximately seven years, profitably sell the property based on the value added through effective management and operation of the property.
  • There is no guarantee that the business plan will be successfully executed, that the property’s value will be enhanced, or that the property will be sold within the planned time period.
  • There can be no assurances that the property manager will be able to renew expiring leases or lease vacant spaces in the property.

Location Information

Founded in 1837, Atlanta is the capital and most populous city in the state of Georgia. In the last decade, Atlanta has experienced unprecedented growth – the official city population remains steady at about 420,000, but the metropolitan population has skyrocketed nearly 40 percent to 5,138,223. With the addition of 890,000 residents since April 1, 2000, the Greater Atlanta area boasts the largest numerical gain of any metropolitan area in the United States during that time. A good measure of growth is the ever-changing downtown skyline, along with skyscrapers constructed in the Midtown, Buckhead, and outer perimeter (fringing I-285) business districts. Atlanta ranks fifth in the number of Fortune 500 companies headquartered in its metropolitan area.

Apartment Market

  • According to Reis, the 2007 year end vacancy was 8.0 percent, down from 8.3 percent one year earlier. Although there were 4,565 completions, increasing the inventory by 1.2 percent, there were 5,019 net absorptions and asking rents increased by 2.8 percent across the market.
  • The property is located in the South Fulton submarket, which led Atlanta in rent growth in 2007 with a 4.6 percent increase. This market is said to have 29,550 units and minimal new inventory coming online in the next five years, an average of approximately 356 units per year until 2012. The rental growth is projected to continue at an average rate of 2.9 percent for the next five years.

ABOUT Grubb & Ellis

Grubb & Ellis Realty Investors, LLC is the real estate investment and asset management subsidiary of Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm. Grubb & Ellis Realty Investors and affiliates manage a growing portfolio of assets valued in excess of $6.1 billion located throughout 30 states. One of the nation’s most active buyers and sellers of commercial real estate, Grubb & Ellis Realty Investors has completed acquisition and disposition volume totaling approximately $10.4 billion on behalf of program investors since its founding in 1998; more than 70 percent of this volume has been transacted since January 1, 2005.

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