Lease-Up & Re-stabilization Opportunity: Following an extensive $3.6 million renovation between 2015-2017, 500 Fifth produced excellent cash flow until the onset of the coronavirus pandemic. In March 2020, property operations were going great, with physical occupancy at 97% and total monthly revenue collected (before expenses) at $250K. However, at the lowpoint during the pandemic, physical occupancy dipped into the 50s%. Since then, the property has been in lease-up mode, but has faced additional challenges including staff turnover, a fire on the roof in early 2023, and new supply headwinds in the downtown submarket. Over the trailing 12 months, total monthly revenue collected (before expenses) has ranged between $180K and $212K. With occupancy now at 80%, there’s an opportunity for new ownership to come in at an attractive basis and do some light value-add, complete the lease-up, and perform rent discovery during 2nd generation leasing following re-stabilization.
Attractive Assumable Debt: New ownership has the option to assume the attractive existing debt, which has an interest rate of 4.50%, a remaining balance of over $21M, and approximately 6 years of term left that matures in August 2029.
Renovations Due to Fire: The property recently had a fire causing damage to part of the roof and rooftop pool area. The damaged portion of the roof has already been repaired, and current ownership is in the process of restoring the rooftop pool and lounge area.
Property Tax Appeal: 500 Fifth’s current tax appraisal is $30,685,800. A tax appeal is currently underway, arguing for a tax value in the $18M – $20M range. If successful, an $18M tax appraisal would lower the Real Estate Taxes from $399,406 to $234,288 assuming the millage rate remained the same.
Proximity to Major Employers: 500 Fifth sits close in proximity to many major employers in the downtown Nashville area, including:
Access to Demand Drivers: 500 Fifth provides convenient access to nearby demand drivers, including:
THIS CONFIDENTIALITY AGREEMENT (“Agreement”) is made and agreed to by The Kirkland Company (“Broker”), exclusive listing broker for the Property, and (“Buyer”) regarding the sale of the property known as 500 Fifth (“Property”) located in Nashville, Tennessee. The obligation of confidentiality undertaken pursuant to this Agreement shall survive the terms of the Broker’s listing agreement with the Owner.
BUYER HAS REQUESTED information from Broker for the purpose of evaluating a possible acquisition of the Property. The Owner of the property has instructed Broker to deliver information concerning the Property, much of which is highly confidential, only to those potential purchasers who sign this Agreement. To receive an Offering Memorandum (“Offering Memorandum”) please read, sign and return this Confidentiality Agreement to Broker. The Offering Memorandum has been prepared by Broker for use by a limited number of parties and does not purport to provide a necessarily accurate summary of the property or any of the documents related thereto, nor does it purport to be all-inclusive or to contain all of the information which prospective Buyers may need or desire. All projections have been developed by Broker and designated sources and are based upon assumptions relating to the general economy, competition, and other factors beyond the control of the Seller and therefore are subject to variation.
THEREFORE, THE PARTIES AGREE, in consideration of the covenants and agreements contained herein, as follows:
THIS CONFIDENTIALITY AND BROKERAGE AGREEMENT ("Agreement") is made and agreed to by and between THE KIRKLAND COMPANY (“Broker”), and “Prospective Buyer” with respect to the sale of certain real property located in Nashville, Tennessee and known as 500 Fifth (“Property”).
NOW THEREFORE, the parties agree, in consideration of the covenants and agreements contained herein, as follows: