Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 11716 Highway 191 in Midland, Texas, leased to Arkos Field Services. The subject property consists of approximately 21,000 square feet of industrial space and is situated on 10 acres of land. The two-building asset features metal construction, 10 grade-level doors, a clear height of 30’, and a two-story 4,600-square-foot office space. Asphalt paving covers a large amount of the land, making the property ideal for outdoor storage. With frontage along State Highway 191, the property sits within 12 miles of both downtown Midland and downtown Odessa. Arkos Field Services has occupied the property since 2011 and its current lease runs until February 2033. Formed in 2014, Arkos is an industry leader in aftermarket services for the natural gas industry. With established relationships with all of the major original equipment manufacturers (OEMs), Arkos installs, monitors, and maintains compression equipment. In 2019, Arkos was acquired by Burckhardt Compression Group, the worldwide leader for reciprocating compressor systems (Arkos). Midland is a midsized market, containing 16.9 million square feet of industrial space centered around the oil and natural gas industry. Unlike the national norm, the vacancy rate has dropped at the start of 2023, falling 140 basis points quarter-over-quarter to 6.3 percent in Q1. Despite supply tightening, annual rent growth slowed down to 3.7 percent during this time. However, with industrial construction activity representing less than 1 percent of inventory, there are essentially no supply-side pressures on rents and vacancies for the foreseeable future (CoStar). While oil and gas prices experienced a pull-back during the summer of 2022, the stars are aligning for a new cyclical bull market in both commodities. At the current pace, stockpiles of the Strategic Petroleum Reserve could be depleted by mid-2024. The persistence of high inflation and global energy shortages equates to a bright future for Midland, presenting a prime opportunity for industrial investors today. Located in West Texas, the Midland-Odessa metro is considered to be an energy capital as the Permian Basin is one of the biggest oil fields in the world and is home to some of the largest petroleum-producing companies. The metro consists of Martin, Midland, and Ector counties. The public sector is a top job provider, but the private sector is the economic driving force. The two largest cities are Midland with over 140,000 residents and Odessa with roughly 123,000 residents. Midland is the center of America’s oil and gas production. Petroleum production and all things in between are prevalent in the area, but Midland is making great efforts and success in diversifying into additional industries such as aerospace. Interstate 20 runs through Midland, making it easy to transport goods and raw materials throughout the country. Rated the No. 1 state for business by U.S. corporate executives, this is an excellent place to start or grow a business in Texas. (midlandtxedc.com). Major employers include: Halliburton, Hilliard, Legacy Reserves, Midland College, Midland Health, Patterson-UTI, Pioneer Natural Resources, Schlumberger, Weatherford, Baker Hughes, Chevron, ConocoPhillips, Bloomberg, and more.