NNN Exchange South, LLC -

NNN Exchange South, LLC

Available for §1031 exchange w llc investment

Offering Purchase Price: $29,735,000

Offering Price Per SF: $152.96

Available for §1031 exchange w llc investment

Situated on nearly 18 acres of land, Exchange South offers distribution and showroom space, an ideal amenity for businesses within the expanding Southside market. The property includes a 661-space surface parking lot with additional parking in the rear of each building. Exchange South is currently 93 percent leased to numerous tenants, including Florida Oncology Associates, P.

Property Summary

Exchange South is a five-building, 194,400-square-foot office portfolio in Jacksonville, Florida. Built in 1990 and 1996, the property is located along Philips Highway, one mile north of the Philips/I-95 intersection. With convenient access to the region’s major thoroughfares (Interstates 95 and 295), it is positioned to take full advantage of Jacksonville’s growing suburban areas. Situated on nearly 18 acres of land, Exchange South offers distribution and showroom space, an ideal amenity for businesses within the expanding Southside market. The property includes a 661-space surface parking lot with additional parking in the rear of each building. Exchange South is currently 93 percent leased to numerous tenants,
including Florida Oncology Associates, P.L., Columbia Analytical Services, and Unique Customer Concept, Inc.L., Columbia Analytical Services, and Unique Customer Concept, Inc.

TIC Offering

Offering Size: $12,335,000
Price Per 1% Ownership: $123,350 equity: $174,000 and assumed debt
Minimum Investment per SPE: 3.00% =$370,050 equity and $522,000 assumed debt for a total purchase price of $892,050
Suitability: Accredited Investors Only

LLC Offering

Offering Size: $616,750
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 five 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.
A high vacancy rate in the Southside/Bay Meadows office submarket of Jacksonville, Florida could cause aggressive competition for new and renewal tenants at the property.
Two tenants are currently not occupying all of their space. DHI Mortgage Company, Ltd. and Preferred Home Mortgage Company have vacated most of their space, which reduces the physical occupancy of the property to approximately 87 percent. In addition, Preferred Home Mortgage is expected to exercise its early lease termination effective January of 2009.
DHI Mortgage Company, Ltd. and Preferred Home Mortgage Company both rely on the residential real estate industry and an adverse change in the industry could negatively affect the property’s performance.
Projected performance of the property is partially based on a prospective lease that has not yet been signed with Biomedical Applications of Florida for 7,851 square feet or four percent of the property.
Unless extended by the tenants, the leases representing approximately 72 percent of the property will expire within the next five calendar years. In addition, the leases representing approximately 26 percent of the property contain early termination options.

Major Tenants (27 Total Tenants)

Florida Oncology Associates, P.L.

www.iconspecialists.com
Square Feet: 17,813 Lease or the property: 9.16%

Expiration: April 2009

Florida Oncology Associates, a division of Integrated Community Oncology Network, LLC, provides specialized care for patients with cancer and/or hematological disorders in Northeast Florida. 26 physicians and their staff members practice at nine community cancer centers in Duval, Clay, St. Johns and Putnam counties.

Columbia Analytical Services, Inc.

www.caslab.com

Square Feet: 17,637 or the property: 9.07%
Lease Expiration: December 2014

Consumer Analytical Services, Inc. (“CAS”) is a full service analytical laboratory providing testing for many industrial, government and consulting firms in the Southeastern United States. As with other CAS facilities, the CAS facility at the property serves international clients, having the necessary permits to accept foreign water and soils in the country for analysis. The laboratory’s technical expertise includes the analysis of routine environmental samples, landfill samples, DOD projects and waste stream characterization. CAS also performs industry specific testing for pulp and paper manufactures, offers field sampling and local courier service and provides a variety of customized reports, including electronic data deliverable and full CLP-like packages.

Unique Consumer Concept, Inc./DirectBuy

www.ucctotalhome.com

Square Feet: 14,863 or 7.65% of the property Lease Expiration: December 2010

DirectBuy is a members-only showroom and home design center that offers merchandise at manufacture-direct prices without traditional retail mark-up. Founded in 1971, DirectBuy is headquartered in Merrillville, Indiana and currently has over 130 locations throughout the United States and Canada.

Location Information

Jacksonville is the largest city in the state of Florida, and the largest city in terms of land area in the contiguous United States. Incorporated in 1832, it was named in honor of President Andrew Jackson, the first military governor of Florida. Located in the northeastern corner of the state on the banks of the St. Johns River, Jacksonville is the state’s leading transportation and distribution hub. The strength of the city’s economy lies in its broad diversification and is balanced among distribution, financial services, biomedical technology, consumer goods, information services, manufacturing, and other industries. Jacksonville has the largest deepwater port in the South Atlantic and is a leading port in the United States for automobile imports.

Office Market

In 2006, REIT reported 4.3 percent and seven percent increases in asking and effective rental rates. First quarter 2007 asking and effective rental rates increased 0.7 percent and one percent respectively.
Southside/Bay Meadows is forecasted to have a decline in vacancy rate to 11.4 percent by the end of 2008 and then continue the decline to nine percent by the end of 2011.

Economic Trends

According to a study by Inc. Magazine that analyzed job growth in over 350 cities, Jacksonville ranked as the No. 12 Boomtown in the nation.
In the third quarter of 2007, the unemployment rate of the Jacksonville Metropolitan Statistical Area (MSA) was 4.2 percent, compared to the national average of 4.9 percent.
The Jacksonville MSA population increased by 13.2 percent from 2000-2006. The Metro Statistical Area is ranked among the top 50 in the United States with a total population of more than one million.

ABOUT Triple Net Properties, LLC

Triple Net Properties, LLC has time-tested experience in real estate syndications, acquisitions, leasing and property management. Triple Net currently manages a growing portfolio of over 39 million square feet of real estate in 29 states valued in excess of $5.4 billion. Although past performance is no guarantee of future results, Triple Net Properties, LLC has an unparalleled track record and has acquired 293 properties to date.
Triple Net and affiliates have sold 107 properties for more than $2.5 billion since 2000.

Triple Net Properties, LLC is a wholly-owned subsidiary of NNN Realty Advisors, Inc., a nationwide commercial real estate asset management and services firm.