overview video
investment highlights
- ATTRACTIVE SELLER FINANCING // TERM: 5 Years | INTEREST RATE: 5% Interest Only | LTV: 75%
- BRAZORIA COUNTY LOCATION // Recreational hotspot 50 miles south of Downtown Houston that’s home to numerous prominent employers and is seeing tremendous industrial growth.
- AMENITIES INCLUDE // Roll-Up Doors, Concrete Driveways, On-Site Manager’s Office, Video Surveillance
- DAY ONE LEVERED YIELD 10.40 PERCENT // Street rents are about 20 percent below the top of the market, tenant insurance isn’t being offered. The investment is projected to provide a 13.50 percent end of year one cash on cash return.
- 4/10 OF AN ACRE OF EXPANSION LAND INCLUDED // There is room to add around 60 portable storage units (over 9,000 NRSF).
- 86 PERCENT PHYSICAL OCCUPANCY (BY UNIT) // This includes 20 new vacant units that came online in July 2023. The previous physical occupancy was over 89 percent.
property summary
The Brazoria County Three Property Portfolio is three self-storage facilities that total 64,880 net rentable square feet of self-stor-age. Lone Star RV & Mini Storage Brazoria and AD Storage, both in Brazoria, sit about one mile apart on TX State Highway 36. The third property, Lone Star Storage RV & Mini Storage Sweeny in Sweeny, Texas is about 10 miles away. The properties are located approximately 50 miles south of downtown Houston. Combined, the properties sit on 5.55 acres with nine single-story buildings consisting of 393 total units. The unit mix consists of 177 traditional drive-up non-climate storage units (27,740 NRSF), 200 portable storage units (32,000 NRSF), 12 covered parking spaces (5,140 NRSF), and three outdoor parking spaces. Lone Star RV & Mini Storage Brazoria was originally built in 2003 and then expanded in 2006. AD Storage was constructed between 1998 and 1999, and Lone Star Storage Sweeny consists entirely of portable storage units. Lone Star RV & Mini Storage Brazoria and AD Storage both feature concrete driveways, a mix of units with roll-up doors and storage containers, and perimeter chain link fencing. Lone Star Storage Brazoria has video surveillance and an on-site manager’s office.
With its beaches, bays, numerous bayous, and camping spots, Brazoria County is a popular area for outdoors enthusiasts. In addition to tourism, the area is bolstered by the numerous major employers in the surrounding Lake Jackson, Clute, Freeport, and Angleton areas. Dow Chemical, Phillips 66, and BASF are a few of the region’s most prominent companies. Additionally, along the Gulf Coast, Port Freeport has seen container operations capacity increase eight-fold in the past six years. That growth is evidenced in front of AD Storage as Highway 36 is in the middle of being widened into a four-lane road to accommodate the increased traffic coming from the port. Currently, 16,430 vehicles pass by the Lone Star Brazoria facility and AD Storage daily.
The well-maintained asset is owned and operated by local couple who self-manage the assets and are looking to retire. The Sell-er is willing to finance the assets with a five percent interest-only loan for a five-year term and a 75 percent Loan-to-Value (LTV). Street Rents are 80 percent of the lone professionally managed storage facility in the trade area. By increasing asking rates closer to market, reducing physical vacancy, and implementing a tenant insurance program the property would yield a year one cash on cash return of 13.50 percent. In addition to continuing to improve operations there is also approximately 4/10 of an acre of expansion land at the AD Storage property that would comfortably accommodate over 9,000 feet of container storage. Further-more, the seller is also a distributor for the mobile storage unit company and could install additional containers for a purchaser.
The physical occupancy of the portfolio is around 86 percent, but that takes into account 20 new units that were put online in July 2023. Before the addition of the new spaces, the property’s physical occupancy by unit count was 89 percent.
