Tennessee Department of Children’s Services 10 Year Lease - 6.5% Cap + Value Add
$7,500,000
2600 Western Ave, Knoxville, TN 37921
55,000 sqft
Building Size
9.11 acres
Lot Area
Details:
Highlights:
- 10-Year lease through November 30, 2035
- Leased by the State of Tennessee
- AAA+ S&P Global Credit Rating
- Tenant pays utilities and janitorial
- Built for DCS in 2009
- HVAC replaced in 2024
- 270 paved parking spaces
- Normal state appropriations clause
- Includes an additional 3.38-acre site
- ±6,478 SF for additional income
Description:
Opportunity to acquire a facility on ±9.11 acres with 270 parking spaces designed and built in 2009 for the Tennessee Department of Children’s Services (DCS). DCS has a lease through November 30th of this year with a new 10-year lease beginning as soon as current construction is completed, which should be by December.
The property includes two significant value-add components. The sale includes an additional ±3.38 acre site to build-up to a 20,000 building. Additionally, there will be ±6,478 SF to lease for added income. Let’s consider values for each component. Considering conservative pricing of $150,000 per acre for the site and a low $10.00/SF for leasable space at a 10% cap rate. The separate values are $6,352,200 for a ten-year state lease, which is an awesome cap rate of 7.7%. A 3.38 acre site at $500,000 and $100/SF for the leasable space to generate a 10% cap rate.
The property is perfectly located for DCS in Knoxville, TN, the second-fastest-growing city in the state of Tennessee. The sites are close to Interstates I-40 and I-640 in West Knoxville.
This property is located in Knoxville, Tennessee.
Documents:
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Knoxville_new_.pdf |
Location

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