How Much Will It Cost to Save This Building?

Four years ago we bought Peerless Mill in Chattanooga: 32 acres, 29 buildings and about 1.5 million square feet. The plan was always to keep every piece of it. In this video I'm walking Building 21 because I'm selling it. Building 21 is 43,000 square feet on about two and a half acres, and the price is $500,000. It's going out of the Peerless Mill partnership and into a new one with Dave and the Greenleaf team, and I'm a partner in both. That puts me on both sides of the deal, so I have to believe the price is right twice, once as the seller and once as the buyer. Here's how we're looking at the deal: - Paying for the dirt and getting the building for free - A new roof at about $400,000, which costs almost as much as the property - About $3,000 an acre per month for the industrial outdoor storage laydown yard, plus around $2 a foot net on the building - Roughly $160,000 a year in NOI, which at an 8 cap is about a $2 million value on a $1.5 million basis - Going to market well below market rents so lease-up goes faster and we're not carrying the debt for long - Why we're bringing in a strategic partner on a project that would take over $100 million to finish ## Key Takeaways - **Building 21 is being sold for $500,000** from the existing Peerless Mill partnership into a new partnership with Dave Codre and the Greenleaf team. Tyler remains involved in both partnerships. The sale is intended to help recapitalize Peerless Mill, pay down debt, and fund future development. - **The deal is primarily about the land.** The property includes about **43,000 square feet** and **2.5 acres**. The partners see the land as valuable for industrial outdoor storage, with the building effectively included at no additional cost. - **The renovation carries significant cost and scope risks.** The roof is estimated at about **$400,000**, with additional electrical work needed. Tyler is comparing three roofing bids against the same scope and including contingencies in the budget. - **The leasing plan prioritizes flexibility and quick occupancy.** The rectangular building could suit one tenant or be divided among multiple tenants, using the existing columns to guide the layout. The team wants to minimize shared areas because they add operational complexity. - **The financial plan targets competitive rents and roughly $160,000 in annual NOI.** The discussion cites about **$2 per square foot net** for the building and roughly **$7,500 per month** for the laydown yard. Tenants would take responsibility for expenses such as utilities and landscaping. - **The next development phase is expected to start by the end of 2026 or early 2027.** The nearly completed self-storage space is awaiting EPB’s transformer installation so it can be fully powered and receive its certificate of occupancy.