Four years ago, I bought a 29-building campus in Rossville, Georgia, about 10 minutes south of downtown Chattanooga. It's 32 acres and 1.5 million square feet of former wool mill, and I paid $5.6 million for it. Run the math on that and it comes out to roughly $4 a square foot.
I was really good about updating you all for the first couple of years, and then time got away from me. So today I want to give you a real, in-depth update on the Peerless Mill: what we've done, what we're working on right now, and how I'm turning one of the biggest adaptive reuse projects in the Southeast into something that actually cash flows.
This is a masterclass in patient, phased commercial real estate investing, and it's the exact opposite of a quick flip. Let's walk through it.
In This Article
Why I Started With Self-Storage
The Tenants Bringing the Mill Back
Peerless Mill, By the Numbers
$5.6M
Purchase price, about $4 per square foot
1.5M SF
29 buildings across 32 acres
350 units
Climate-controlled self-storage, phase one
The Deal: $4 a Square Foot
I closed on the mill back in 2022, but we were under contract for eight or nine months before that. When you're buying a former wool mill, there are environmental concerns, and lenders get nervous. We had to do a phase one, a phase two, and then a second, much more intense phase two. I like to call it a phase two and a half, which doesn't technically exist, but that's where we were.
The good news is we found hardly any environmental issues. We know where the asbestos and lead paint are, and we found one 10-foot-by-10-foot area of arsenic in the soil that we'll remediate. But it's not a Superfund site, so we're working through the Georgia Brownfield program on a building-by-building basis. That environmental unknown is exactly what scared everyone else away, and it's a big part of why I got it so cheap.
Here's how I knew $5.6 million was a deal even with the property mostly vacant. One, the existing tenants were already covering the debt service, so it was break-even the day I bought it. Two, I bought it for $4 a square foot. Even if we had to deal with environmental issues, lose a couple of buildings that weren't salvageable, and only accomplish 20% of our overall plans, the project would still be a success. That's the margin of safety you want. I financed it by bringing in a couple of buddies rather than raising private equity, because I didn't want professional investors forcing us onto a five-year timeline. This kind of creative structuring is the same mindset behind buying commercial real estate with no money down.
Why I Started With Self-Storage
When we posted about the mill on Instagram and TikTok recently, I got a lot of comments like "oh great, more self-storage." And I get it. Self-storage isn't the sexiest use in the world. But it was the single smartest first move I could make, and here's why.
We built out 350 climate-controlled self-storage units for about $1.6 million. That's roughly 50,000 square feet at around $32 to $36 a foot. If I'd built out retail in that same space, it would have cost me $10, $15, maybe $20 million. Self-storage let me put in the least amount of capital, control the whole thing myself, and open the doors without a long leasing process. Once it's full, it should cash flow somewhere between $15,000 and $30,000 a month.
That cash flow is the whole point. It's the money I'll reinvest into cleaning up the rest of the site and building out spaces for new businesses, without having to constantly raise more capital. I even left another 25,000 to 30,000 square feet on the floor plate for expansion. A market survey said the area could support around 600 units, and we only built 350, so we can always add more later.
The infrastructure matters too. I spent $500,000 on sprinklers just for the storage facility, which sounds insane, but now I have sprinkler and power infrastructure that feeds multiple buildings. Getting power took almost 12 months, but now the utility knows the property and it's easy for them to drop the next transformer.
The Tenants Bringing the Mill Back to Life
The mill isn't a ghost town. There's real activity on site already, and it's the kind that builds momentum.
Cesario's Pizza opened out front and is absolutely crushing it. These are $21 personal pizzas, a high-end pizzeria, not another fast food spot, and they're worth every dollar. Flip Side Burger Bar is about to open. Prader's Flooring occupies a couple hundred thousand square feet. And Amigos runs one of their locations here, which the last time I checked was the number one restaurant in their entire chain of six.
That's the flywheel. Every business that opens makes the next lease easier to sign, because now a prospective tenant can drive over, eat a great pizza, and actually picture what this place is becoming.
What's Next: Brewery, Flex, and More
The building I'm most excited about is the old boiler room. It's going to be a brewery and tap room, and it might be the anchor gem of the whole site. It has 38 to 51-foot ceilings, it sits right next to the pond, and it's directly below the smokestacks, which are the most prominent thing you see driving through Rossville. Picture an outdoor beer garden right there. We're going to whitebox it and offer a tenant improvement allowance for the right brewery or distillery. If you know one looking at the Chattanooga area, send them my way.
After that, we've got a 1,350-square-foot standalone building with a brand-new roof that would make a perfect coffee shop, plus 7,400 square feet next door that could be a bar, restaurant, retail, or temporary art studios. We're also building out a 43,000-square-foot building into flex space for 8 to 12 tenants, and we've got warehouse and industrial real estate space, including a 3.5-acre laydown yard.
About that demolition. A storm recently took out a portion of one building whose roof was already gone, thanks to a previous owner who literally dragged HVAC units off the roof and threw them off. We had to bring in a demolition crew. To be clear, it's a portion of one building out of 29, not the whole mill. And we're saving every brick. It's 100-year-old brick you simply cannot remake, and we're going to reuse it throughout the site.
The Strategy: Cash Flow First, Then the Cool Stuff
Here's the honest truth about a project this size. I could drop $100 million into this mill tomorrow and you'd barely notice it. So the entire game is balancing all the cool, expensive things we want to do against what we can do today to bring revenue in and pay for the rest.
That's why we go one building at a time. Self-storage first because it was the cheapest thing I could build and fully control. Then flex space. Then the brewery, once the cash flow supports it. If a national brewery like Sweetwater came along tomorrow, I'd put a million dollars into that building in a heartbeat. But it makes zero sense to spend that money today and let it sit there waiting on a tenant. That's forced appreciation done with discipline, and it's the heart of every value-add project I take on.
We're also working through refinancing right now, and there are some genuinely great incentives on the table, community improvement tax credits and brownfield programs that give us attractive loan terms without a lot of cost. Between the incentives for us and the incentives we can offer tenants, the capital stack keeps getting more efficient the longer we're in it. If you want the fuller backstory on this property, I wrote about it in the Peerless Mill revitalization post.
Key Takeaways
Buy your margin of safety. At $4 a square foot with tenants covering debt service, the mill worked even if only 20% of the plan came together.
Lead with the cheapest cash flow. Self-storage cost about $32 a foot and opens without a leasing grind, funding everything that comes next.
Control your timeline. Partnering with friends instead of professional LPs let me avoid a forced five-year exit on a project that needs patience.
Tenants create momentum. Every restaurant and business that opens makes the next lease easier and tells the community's story for you.
Don't spend capital before it earns. Save the expensive builds like the brewery for when a real tenant and real cash flow justify them.
This article is adapted from an Office Hours episode on the Tyler Cauble YouTube channel. You can see the full marketing package and every available space at peerlessmill.com.
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