overview video
investment highlights
- TREMENDOUS GROWTH STORY // Over 20 residential communities are in some phase of development within the trade area of the portfolio.
- MASSIVE CORPORATE GROWTH // Companies such as Tesla, HEB, and Daikin Industries have operations within the portfolio trade area.
- EXPANSION OPPORTUNITY // Approximately 12 Acres of Expansion Land Included.
- STABLE ASSET WITH LIMITED COMPETITION // The portfolio has been over 95 percent physically occupied for several years and is currently 93 percent economically occupied.
- 1,045 UNITS – 147,970 NRSF // 736 non climate units, 205 climate controlled units, 2 apartments, and 2 office warehouse space are included in the unit mix.
- SIGNIFICANT MANAGEMENT UPSIDE // No Dynamic Pricing or revenue management. Rental rates get manually changed about once per year. The property website doesn’t have the ability to handle online rentals. There’s no call center, no relief manager, and ancillary revenue streams such as tenant insurance aren’t being captured.
- SELLER FINANCING // Interest Rate: 5.25 Percent Interest Only | Term: 36 Months | LTV: 75 Percent
property summary
The Greater Houston 5 Storage portfolio is a five-property portfolio located between Brookshire, Pattison, Waller and Hockley, TX that totals 147,970 net rentable square feet and 1,045 units. The properties are along the western and northwestern edge of the Houston MSA approximately 40 miles from Downtown Houston. Royal Storage of Brookshire has 42,745 NRSF, 372 units and sits on approximately five acres while three miles to the north the 151 unit, 19,475 NRSF Royal Storage of Pattison operates as a satellite facility. Both Royal Storage of Brookshire (~2.32 undeveloped acres) and Royal Storage of Pattison (~2.36 undeveloped acres) have expansion land included in the opportunity. Similarly on the northwest side of the Greater Houston Area, Waller Storage Center (46,875 NRSF, 406 Units, 3.51 acres) acts as the hub facility for Waller Boat and RV Storage (25,200 NRSF, 60 Units, 5.00 acres) and Hockley Storage Center (12,950 NRSF, 113 Units, 4.00 acres). The properties feature several amenities including climate control units, concrete driveways, units with roll up doors, automatic gates with key code access, and surveillance cameras throughout.
From new schools to new homes, to global businesses, the assets sit in the midst of perhaps Houston’s hottest growth corridor. Waller High School opened a new campus in 2022 and has grown around 23 percent in the past five years. There are over 20 residential communities in some phase of development within the trade area of the portfolio. The residential sprawl
is only part of the story. Less than two miles from Royal Storage of Brookshire is The Empire West Business Park where Tesla plans to occupy over one million square feet. The 500,000 square foot Great 290 Distribution Center is less than a mile from Waller Storage Center and Daikin which is one of the world’s leading air conditioning manufacturers has it’s Texas Technology Park approximately three miles from Waller Storage Center that provides 4,000 jobs. Also, there are plans to expand Baethe Road which fronts Waller Boat & RV Storage and FM 2920 in front of Hockley Storage Center to four-lane thoroughfares.
These well-maintained assets are owned and operated by an out of area individual who self-manages the properties and is looking to exit the storage business. The Seller hasn’t implemented various management strategies often utilized by more sophisticated operators. For instance, there’s no dynamic pricing or revenue management as rental rates are adjusted manually about once per year. Furthermore, the property website is a non-interactive information only website and doesn’t have the capability to accept rentals online. There is no call center, no relief manager, and ancillary revenue streams such as tenant insurance aren’t being captured. The physical occupancy of the portfolio is over 95 percent and has been highly occupied for several years. The economic occupancy of the portfolio sits at 93 percent as of November 30th, 2023.
There is very limited competition with the closest climate control storage in the case of Brookshire and Pattison being about seven miles away in the neighboring suburb of Katy. Waller Storage Center only has one competitor who offers climate control units and Hockley Storage Center’s closest competition is nearly four miles away. The seller is willing to finance the properties at a 75 percent Loan-to-Value (LTV) at an interest rate of 5.25 percent interest only for a 36-month term.
