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Warehouse

2407 N Preston Street

2407 N Preston St, Ennis, TX 75119

Listing Price: $2,350,000

Cap Rate
6.38%
Gross SF
62,500
Price/Gross SF
$37.60
Lot Size
2.13 acres
Year Built
1962
Rentable SF
62,500

Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 2407 North Preston Street in Ennis, Texas, leased to Party Supplies Group, LLC. The subject property consists of approximately 62,500 square feet of warehouse space and is situated on 2.13 acres of land. The asset features six loading docks, allowing for easy distribution with 18-wheeler trucks. Based on current land and construction costs, the property is priced below replacement costs. At $2.40 per square foot, the tenant’s triple-net lease is below the average market rate of about $3.75 per square foot for comparable properties. This creates a value-add opportunity for the future landlord when the lease expires in the Fall of 2023. Situated just off of Interstate 45 in the Outlying Ellis County submarket, the property has direct access to Dallas and Houston. The Outlying Ellis County submarket is relatively small, containing 13.0 million square feet of industrial space. Logistics space makes up the majority of the submarket, taking up 56 percent of inventory. Over the last four quarters, the vacancy rate has dropped 190 basis points to 1.6 percent during the third quarter of 2022. This compares to the 5.4 percent rate for the overall market. At nearly 320,000 square feet, annual net absorption through Q3 2022 dwarfs the five-year average of about 59,000 square feet. The sudden jump in demand has helped propel market rent growth to an unprecedented 13.7 percent year-over-year during Q3. While rent growth in Outlying Ellis County compares to the overall market, average rents in the submarket offer tenants a 16 percent discount at about $7.10 per square foot compared to the metro area. With 264,000 square feet currently underway, the inventory is set to expand by a considerable 2 percent. However, nearly all of this new construction is concentrated in the 250,000-square-foot Red Oak data center (CoStar). Therefore, rent growth and vacancies among smaller warehouses will essentially be unaffected by new supply for the foreseeable future. The Dallas-Fort Worth metroplex is the fourth-most populous metro in the nation, with an aggregate of more than 7.7 million residents. It is composed of 13 counties stretching nearly 10,000 square miles. The city of Dallas houses 1.3 million people, followed by Fort Worth with 919,000 residents. Strong job growth continually draws new residents to the region. To accommodate the additional traffic, the region’s transportation network is evolving. Traffic flow is improved as freeways are expanded and miles are being added to tollways and turnpikes. The growth of the transportation network is vital to supporting commuters to the metros numerous corporations and growing industries. Dallas/Fort Worth’s population growth in recent years ranks among the highest in the U.S. for a major metro. The Metroplex is home to 24 Fortune 500 companies and many regional headquarters, drawing workers and residents. The area’s extensive network of rail and highways, along with the International Inland Port of Dallas, ensure its status as a distribution hub.

Investment Highlights

  • Easy Access to I-45, Major Interstate Connecting DFW and Houston
  • Situated on 2.13 Acres with 6-Docks Allowing for 18-Wheeler Distribution
  • Value-Add Opportunity to Increase to Market Rent Upon Expiration of Current Lease
  • Below-Market Rent: $2.40 per Foot NNN | Market Rent is $3.75 NNN
  • Submarket Vacancy Rate is Below-Average at 2.3% (CoStar)
  • Priced Below Replacement Cost of the Land and Construction
  • Roof Repair/Resurfacing Currently in Progress (2022)

Exclusively Listed By

Financing By

Warehouse

2407 N Preston Street

Listing Price: $2,350,000

Cap Rate
6.38%
Gross SF
62,500
Price/Gross SF
$37.60
Lot Size
2.13 acres
Year Built
1962
Rentable SF
62,500

Investment Highlights

  • Easy Access to I-45, Major Interstate Connecting DFW and Houston
  • Situated on 2.13 Acres with 6-Docks Allowing for 18-Wheeler Distribution
  • Value-Add Opportunity to Increase to Market Rent Upon Expiration of Current Lease
  • Below-Market Rent: $2.40 per Foot NNN | Market Rent is $3.75 NNN
  • Submarket Vacancy Rate is Below-Average at 2.3% (CoStar)
  • Priced Below Replacement Cost of the Land and Construction
  • Roof Repair/Resurfacing Currently in Progress (2022)

Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 2407 North Preston Street in Ennis, Texas, leased to Party Supplies Group, LLC. The subject property consists of approximately 62,500 square feet of warehouse space and is situated on 2.13 acres of land. The asset features six loading docks, allowing for easy distribution with 18-wheeler trucks. Based on current land and construction costs, the property is priced below replacement costs. At $2.40 per square foot, the tenant’s triple-net lease is below the average market rate of about $3.75 per square foot for comparable properties. This creates a value-add opportunity for the future landlord when the lease expires in the Fall of 2023. Situated just off of Interstate 45 in the Outlying Ellis County submarket, the property has direct access to Dallas and Houston. The Outlying Ellis County submarket is relatively small, containing 13.0 million square feet of industrial space. Logistics space makes up the majority of the submarket, taking up 56 percent of inventory. Over the last four quarters, the vacancy rate has dropped 190 basis points to 1.6 percent during the third quarter of 2022. This compares to the 5.4 percent rate for the overall market. At nearly 320,000 square feet, annual net absorption through Q3 2022 dwarfs the five-year average of about 59,000 square feet. The sudden jump in demand has helped propel market rent growth to an unprecedented 13.7 percent year-over-year during Q3. While rent growth in Outlying Ellis County compares to the overall market, average rents in the submarket offer tenants a 16 percent discount at about $7.10 per square foot compared to the metro area. With 264,000 square feet currently underway, the inventory is set to expand by a considerable 2 percent. However, nearly all of this new construction is concentrated in the 250,000-square-foot Red Oak data center (CoStar). Therefore, rent growth and vacancies among smaller warehouses will essentially be unaffected by new supply for the foreseeable future. The Dallas-Fort Worth metroplex is the fourth-most populous metro in the nation, with an aggregate of more than 7.7 million residents. It is composed of 13 counties stretching nearly 10,000 square miles. The city of Dallas houses 1.3 million people, followed by Fort Worth with 919,000 residents. Strong job growth continually draws new residents to the region. To accommodate the additional traffic, the region’s transportation network is evolving. Traffic flow is improved as freeways are expanded and miles are being added to tollways and turnpikes. The growth of the transportation network is vital to supporting commuters to the metros numerous corporations and growing industries. Dallas/Fort Worth’s population growth in recent years ranks among the highest in the U.S. for a major metro. The Metroplex is home to 24 Fortune 500 companies and many regional headquarters, drawing workers and residents. The area’s extensive network of rail and highways, along with the International Inland Port of Dallas, ensure its status as a distribution hub.

Exclusively Listed By

Financing By

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