Investment Overview

Marcus & Millichap is pleased to exclusively offer for sale Malik Office Park, located at 8700 9th Avenue and 3800 Highway 365 in Port Arthur, TX 77642. Malik Office Park is a two-building professional park with 24,691-square-foot of leasable area on 2.16 acres. The subject property is offered at a price of $3,092,000, which offers an investor a day one CAP rate of 8.87 percent. This attractive CAP rate allows an investor to achieve positive leverage, even in the current financing climate, assuming the borrower attains similar terms as outlined in the sample financing terms. The property is currently 92 percent occupied, allowing for a buyer to add value to the property by leasing the 1,942 square feet of space that is currently vacant. Should a purchaser lease the current vacancies at market rental rates, they would achieve a pro forma CAP rate of 10 percent or greater. In addition to Malik Office Park’s attractive yield for an investor, the property has also been significantly renovated in the last year. Capital improvements include: $75,000 of HVAC replacements and repairs, $35,000 of new signage, $85,000 of fresh paint work, $17,000 of improvements to lighting, $136,000 of interior improvements, and over $25,000 of roof and electrical work. At the asking price of $3,092,000, the property is offered at only $125 per square foot to the building, which is significantly below replacement cost. Moreover, the average rental rate at the property is only $1.46 per square foot on full service gross leases, which is a sustainable rental rate for tenants and allows room for an investor to increase rental rates as renewals and new leases are signed.