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Self-Storage Facility

Burleson Storage Portfolio

243 Elk Dr, Burleson, TX 76028

Listing Price: $23,000,000

Cap Rate
4.43%
Number of Units
934
Occupancy
73.4%
Rentable SF
121,667
Price/Rentable SF
$189.04
Year Built
2018

Investment Overview

Offered for purchase within the Burleson Storage Portfolio are two institutional-quality self-storage facilities located in the Fort Worth, Texas suburbs of Burleson and Joshua. Built in 2018 and 2019, the facilities contain a combined 121,667 rentable-square feet of storage space distributed amongst 900 climate-controlled units, 12 non-climate drive-up units, 21 covered parking spaces, and one uncovered parking space. In terms of aesthetics, construction-quality, and functionality, the facilities are without question the most attractive in their respective trade areas. To be sure, brick façades, slab-on-grade concrete foundations, galvanized steel framing, multiple freight elevators, individually sprinkled units, 24-hour video surveillance cameras, perimeter lighting, interior sensor lighting, and canopied loading/unloading areas containing roll-up bay doors are all distinctive attributes that will ensure facilities’ the long-term viability. The current owner/developer is a local resident who leveraged his robust professional network and intimate knowledge of the submarket to choose very specific locations whose proximity to each other could be used to create operational efficiencies without risk of cannibalization. To that end, the facilities are located approximately five-miles apart, and each property resides virtually adjacent to TX-74, the primary commercial thoroughfare connecting Burleson and Joshua. As such, it typically takes less than ten minutes to drive from one facility to the other, which virtually eliminates the need for two dedicated on-site staffing teams. The facilities also benefit from their direct exposure to a variety of nearby traffic generators. More specifically, Joshua Storage is located next door to a Brookshire’s Grocery-anchored shopping center, and across the street from the Joshua ISD High School, while Burleson Storage is not only surrounded by major retailers like Walmart Supercenter, Target, Home Depot, H-E-B, and Kroger Marketplace, it is also located across the street the Burleson ISD High School. The facilities’ locations undoubtedly contributed to their rapid lease-up, as their blended physical occupancy rate sits at 97 percent as of April 25th, 2022. With that said, significant upside potential remains available for capture. A new operator could easily revise the highly accommodative managerial policies that (for sentimental reasons related primarily to the seller’s deep-rooted ties to the local community) currently obscure the path toward economic stabilization. More specifically, the current owner never raises rates on existing tenants, rarely applies late fees to consistently delinquent tenants, and deliberately chooses to keep street rates approximately 26 percent below the blended market average even though both Burleson Storage and Joshua Storage, the two nicest facilities in their submarket, are almost 100 percent physically occupied. Upon implementing operational policies that are more representative of 2022 industry norms, a new owner can reasonably expect to see a disproportionately low tenant attrition rate compared to what would otherwise be typical, not just because the current policies are so charitable, but also because the demographic profile, population growth rate, and supply/demand ratios characterizing the surrounding market are all uniquely attractive. To be sure, since 2010 the Burleson and Joshua markets have grown by an average of 42 percent, a variety of nearby single-family and multi-family developments are currently underway, and the average household income surrounding each facility approaches $100,000. At a purchase price of $23,000,000, the Burleson Storage Portfolio is offered at a year-one broker adjusted cap rate of 4.43 percent, and the opportunity to capture unleveraged returns in excess of 5.32 percent while simultaneously creating value throughout the hold period becomes readily apparent when taking into account the fact that these are the only two recently-constructed institutional-quality assets located within one of the fastest growing pockets of the Dallas-Fort Worth Metroplex.

Investment Highlights

  • "Mom & Pop" Owned and Operated
  • 97 Percent Physical Occupancy – Stabilized Cash Flow
  • Owner Never Raises Rates on Existing Tenants

Exclusively Listed By

Financing By

Self-Storage Facility

Burleson Storage Portfolio

Listing Price: $23,000,000

Cap Rate
4.43%
Number of Units
934
Occupancy
73.4%
Rentable SF
121,667
Price/Rentable SF
$189.04
Year Built
2018

Investment Highlights

  • "Mom & Pop" Owned and Operated
  • 97 Percent Physical Occupancy – Stabilized Cash Flow
  • Owner Never Raises Rates on Existing Tenants

Investment Overview

Offered for purchase within the Burleson Storage Portfolio are two institutional-quality self-storage facilities located in the Fort Worth, Texas suburbs of Burleson and Joshua. Built in 2018 and 2019, the facilities contain a combined 121,667 rentable-square feet of storage space distributed amongst 900 climate-controlled units, 12 non-climate drive-up units, 21 covered parking spaces, and one uncovered parking space. In terms of aesthetics, construction-quality, and functionality, the facilities are without question the most attractive in their respective trade areas. To be sure, brick façades, slab-on-grade concrete foundations, galvanized steel framing, multiple freight elevators, individually sprinkled units, 24-hour video surveillance cameras, perimeter lighting, interior sensor lighting, and canopied loading/unloading areas containing roll-up bay doors are all distinctive attributes that will ensure facilities’ the long-term viability. The current owner/developer is a local resident who leveraged his robust professional network and intimate knowledge of the submarket to choose very specific locations whose proximity to each other could be used to create operational efficiencies without risk of cannibalization. To that end, the facilities are located approximately five-miles apart, and each property resides virtually adjacent to TX-74, the primary commercial thoroughfare connecting Burleson and Joshua. As such, it typically takes less than ten minutes to drive from one facility to the other, which virtually eliminates the need for two dedicated on-site staffing teams. The facilities also benefit from their direct exposure to a variety of nearby traffic generators. More specifically, Joshua Storage is located next door to a Brookshire’s Grocery-anchored shopping center, and across the street from the Joshua ISD High School, while Burleson Storage is not only surrounded by major retailers like Walmart Supercenter, Target, Home Depot, H-E-B, and Kroger Marketplace, it is also located across the street the Burleson ISD High School. The facilities’ locations undoubtedly contributed to their rapid lease-up, as their blended physical occupancy rate sits at 97 percent as of April 25th, 2022. With that said, significant upside potential remains available for capture. A new operator could easily revise the highly accommodative managerial policies that (for sentimental reasons related primarily to the seller’s deep-rooted ties to the local community) currently obscure the path toward economic stabilization. More specifically, the current owner never raises rates on existing tenants, rarely applies late fees to consistently delinquent tenants, and deliberately chooses to keep street rates approximately 26 percent below the blended market average even though both Burleson Storage and Joshua Storage, the two nicest facilities in their submarket, are almost 100 percent physically occupied. Upon implementing operational policies that are more representative of 2022 industry norms, a new owner can reasonably expect to see a disproportionately low tenant attrition rate compared to what would otherwise be typical, not just because the current policies are so charitable, but also because the demographic profile, population growth rate, and supply/demand ratios characterizing the surrounding market are all uniquely attractive. To be sure, since 2010 the Burleson and Joshua markets have grown by an average of 42 percent, a variety of nearby single-family and multi-family developments are currently underway, and the average household income surrounding each facility approaches $100,000. At a purchase price of $23,000,000, the Burleson Storage Portfolio is offered at a year-one broker adjusted cap rate of 4.43 percent, and the opportunity to capture unleveraged returns in excess of 5.32 percent while simultaneously creating value throughout the hold period becomes readily apparent when taking into account the fact that these are the only two recently-constructed institutional-quality assets located within one of the fastest growing pockets of the Dallas-Fort Worth Metroplex.

Exclusively Listed By

Financing By

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