overview video
investment highlights
- $59.22/NRSF // Below Replacement Cost With Considerable Upside
- 71 PERCENT PHYSICAL OCCUPANCY // 6.44 Percent End of Year One Cap Rate at 75 Percent Economic Occupancy
- TRAFFIC COUNTS // 19,200 VPD on Highway 6 and 13,530 FM 1764. Well Positioned Assets Throughout Santa Fe, TX.
- 682 UNITS – 97,090 NRSF // Four Locations located within about a two-mile radius of one another.
- RAPID REVENUE GROWTH // Seller implemented professional management upon purchasing the assets in late 2021 and has seen achieved revenue increase by nearly 60 percent in less than 2 years.
- NEW SINGLE-FAMILY CONSTRUCTION // Chesmar Homes has started construction on the Mulberry Farms community (168 homes) adjacent to the Avenue J location and K-Hovnanian is starting construction on Centennial Oaks (over 100 homes) in two months next to the Highway 6 facility.
property summary
Santa Fe Storage Portfolio is four self-storage facilities in Santa Fe Texas (Houston MSA) that comprise 97,090 net rentable square feet. The properties sit on approximately 4.35 acres of land and there are 17 single story buildings and one two-story office residence. There are a total of 682 rentable spaces made up of 654 non-climate units, 24 outdoor parking spaces, two small office spaces, a billboard, and an efficiency apartment. All the properties have entrance gates with digital keypad access. The Highway 6 location was constructed in 1984, the FM 1764 and Avenue G ½ properties were built in 1980, and the Avenue J asset was constructed in 1979. There is an on-site management office with a residence at the Highway 6 location while the other properties are unmanned. The four properties are located either on or close to the main streets in Santa Fe within a two-mile radius and provide convenient access to customers throughout the town.
At just under $60/foot, this investment offers an investor the opportunity to acquire nearly 100,000 feet of storage at below replacement cost with considerable upside. The Seller is an out of state group who purchased the asset less than two years ago but has found a different asset that they want to move to closer to home. When ownership purchased the asset the rental rates on existing tenants had never been increased and the physical occupancy was inflated with an enormous loss to lease. Achieved revenues have risen nearly 60 percent even though the facility is currently around 71 percent physically occupied. The seller’s business plan is being cut short, which gives an investor the opportunity to continue to drive occupancy and rents. By maintaining professional management that captures ancillary income streams and getting to 75 percent economic occupancy at the end of the 1st year of ownership the property is projected to yield an un-levered return of over 6.5 percent.
Santa Fe is in Galveston County approximately 35 miles southeast of downtown Houston. Santa Fe features three major thoroughfares State Highway 6, FM 646, and FM 1764, which provide residents convenient access to the employment centers along I-45 in Galveston and Clear Lake along with the south and southwest portions of Greater Houston. The Santa Fe Storage location on Highway 6 sees daily traffic counts north of 19,000 and the FM 1764 property is also highly visible with daily traffic counts around 13,530. The city of Santa Fe is seeing signs of economic growth fielding calls weekly from well-known retailers, restaurants and other business looking to expand their footprint into the city. In fact, Chesmar Homes is underway on construction on Mulberry Farms which is a 168 home community that sits adjacent to the Avenue J location and K-Hovnanian Homes is starting construction on Centennial Oaks, a new 100 home neighborhood adjacent to the Highway 6 facility. Other commercial projects coming online include the Big Horn Barbecue restaurant that is under construction 6/10 mile from the Avenue J location and a new Whataburger being built on an H-E-B pad site approximately 5/10 of a mile from the 1764 location.
