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Self-Storage Facility

Castlerock Storage - Store It All Texas

4699 I-30 Frontage Rd, Caddo Mills, TX 75135

Listing Price: $19,000,000

Cap Rate
4.28%
Number of Units
640
Occupancy
90.3%
Rentable SF
166,327
Price/Rentable SF
$114.23
Year Built
2016

Investment Overview

Castlerock Storage / Store-it-All Texas is located on one parcel (approximately 11 acres) in Caddo Mills, Texas. Caddo Mills is situated on the far northeastern boundary of the Dallas-Fort Worth Metroplex, and as of May 2022, the 166,327 rentable-square-foot facility is approximately 90 percent physically occupied. The facility – originally constructed in 2016 then expanded in 2018 – contains 93 climate-controlled units, 352 non-climate drive up units, 42 enclosed boat/RV parking spaces, 147 covered boat/RV spaces, and six uncovered parking spaces. For several reasons (not the least of which is its location on the Interstate-30 frontage road), the “mom & pop” owner/operated facility has been performing at a high level for years. With that said, the facility is on the precipice of reaching heights never previously seen in terms of monthly revenue collections, effective rates per rentable square-foot, existing tenant street rate/effective rate reconciliation, and tenant insurance penetration. To be sure, less than one year ago only one percent of the existing tenants were leasing units at the current street rates. As of May 2022, that percentage has increased to approximately 25 percent. Additionally, gross monthly revenue in May 2022 is approximately eight percent higher than what it was just four months ago, and effective rates per occupied square foot are approximately 10 percent higher than they were in September 2021. These historical trends suggest year-over-year gross revenue and effective rate growth will continue throughout a new owner’s hold period. With that said, while the operating gains mentioned above are indeed a representation of the current owner’s desire to exploit the asset’s full potential, a more institutional operator will almost certainly find value in the application of management practices reflective of those used in 2022 by the industry’s top operators. To be sure, despite the institutional nature of the facility’s size, construction-quality, market, and location, at no time has anything resembling a sophisticated demand-driven revenue management program been employed. In fact, the current owner has neglected to take advantage of a legitimate opportunity to increase the facility’s gross potential rent (an entirely superficial increase of approximately one percent in September 2021 notwithstanding), despite the presence and validity of the recent gross revenue, effective rate, and physical occupancy gains mentioned above. Additionally, the current owner has never seriously explored carving-out the approximate 1.30 acres of raw land fronting Interstate-30 so that it could be purchased by a non-self-storage developer, nor has he investigated how much of that raw land could be used to expand the property’s self-storage footprint. Accordingly, a new operator will be uniquely positioned to leverage the facility’s historical performance and future potential as a springboard from which incremental revenue gains and value creation could be produced. The opportunities for value-creation become more readily apparent when one considers the fact that the facility is located only 30 miles away from downtown Dallas, the epicenter of the fastest growing metropolitan area in the United States (the D-FW Metroplex is projected to pass Chicago as the third largest MSA in the country by 2030). As the growing population continues to push the boundaries of the D-FW market outward, a new operator can reasonably expect to achieve unleveraged pro-forma returns of approximately 5.50 percent upon economic stabilization of a gross potential rent that is only moderately higher than what currently exists. In fact, the yield projections contained herein are only partially representative of the facility’s true potential. To be sure, the pro forma yields do not yet take into consideration what can be accomplished should a new buyer intend to hold the facility for more than just three years.

Investment Highlights

  • 90 Percent Physical Occupancy – Stabilized Cash Flow
  • Excellent Location on Interstate-30 Frontage – Approaching 50,000 Vehicles per Day
  • Opportunity for Future Storage Expansion

Exclusively Listed By

Financing By

Self-Storage Facility

Castlerock Storage - Store It All Texas

Listing Price: $19,000,000

Cap Rate
4.28%
Number of Units
640
Occupancy
90.3%
Rentable SF
166,327
Price/Rentable SF
$114.23
Year Built
2016

Investment Highlights

  • 90 Percent Physical Occupancy – Stabilized Cash Flow
  • Excellent Location on Interstate-30 Frontage – Approaching 50,000 Vehicles per Day
  • Opportunity for Future Storage Expansion

Investment Overview

Castlerock Storage / Store-it-All Texas is located on one parcel (approximately 11 acres) in Caddo Mills, Texas. Caddo Mills is situated on the far northeastern boundary of the Dallas-Fort Worth Metroplex, and as of May 2022, the 166,327 rentable-square-foot facility is approximately 90 percent physically occupied. The facility – originally constructed in 2016 then expanded in 2018 – contains 93 climate-controlled units, 352 non-climate drive up units, 42 enclosed boat/RV parking spaces, 147 covered boat/RV spaces, and six uncovered parking spaces. For several reasons (not the least of which is its location on the Interstate-30 frontage road), the “mom & pop” owner/operated facility has been performing at a high level for years. With that said, the facility is on the precipice of reaching heights never previously seen in terms of monthly revenue collections, effective rates per rentable square-foot, existing tenant street rate/effective rate reconciliation, and tenant insurance penetration. To be sure, less than one year ago only one percent of the existing tenants were leasing units at the current street rates. As of May 2022, that percentage has increased to approximately 25 percent. Additionally, gross monthly revenue in May 2022 is approximately eight percent higher than what it was just four months ago, and effective rates per occupied square foot are approximately 10 percent higher than they were in September 2021. These historical trends suggest year-over-year gross revenue and effective rate growth will continue throughout a new owner’s hold period. With that said, while the operating gains mentioned above are indeed a representation of the current owner’s desire to exploit the asset’s full potential, a more institutional operator will almost certainly find value in the application of management practices reflective of those used in 2022 by the industry’s top operators. To be sure, despite the institutional nature of the facility’s size, construction-quality, market, and location, at no time has anything resembling a sophisticated demand-driven revenue management program been employed. In fact, the current owner has neglected to take advantage of a legitimate opportunity to increase the facility’s gross potential rent (an entirely superficial increase of approximately one percent in September 2021 notwithstanding), despite the presence and validity of the recent gross revenue, effective rate, and physical occupancy gains mentioned above. Additionally, the current owner has never seriously explored carving-out the approximate 1.30 acres of raw land fronting Interstate-30 so that it could be purchased by a non-self-storage developer, nor has he investigated how much of that raw land could be used to expand the property’s self-storage footprint. Accordingly, a new operator will be uniquely positioned to leverage the facility’s historical performance and future potential as a springboard from which incremental revenue gains and value creation could be produced. The opportunities for value-creation become more readily apparent when one considers the fact that the facility is located only 30 miles away from downtown Dallas, the epicenter of the fastest growing metropolitan area in the United States (the D-FW Metroplex is projected to pass Chicago as the third largest MSA in the country by 2030). As the growing population continues to push the boundaries of the D-FW market outward, a new operator can reasonably expect to achieve unleveraged pro-forma returns of approximately 5.50 percent upon economic stabilization of a gross potential rent that is only moderately higher than what currently exists. In fact, the yield projections contained herein are only partially representative of the facility’s true potential. To be sure, the pro forma yields do not yet take into consideration what can be accomplished should a new buyer intend to hold the facility for more than just three years.

Exclusively Listed By

Financing By

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