Investment Overview

Marcus & Millichap is pleased to present an exclusive opportunity to acquire 1750 Storage Solutions, a premier self-storage facility located in Abilene, Texas. The property features a diverse mix of 78 climate-controlled units, 308 drive-up units, 109 covered parking spaces, and nine uncovered parking spaces. The facility is comprised of 25 metal buildings containing garage-style roll-up doors, a professional leasing office connected to a one-bed, one-bath manager’s residence, standing seam metal roofs, perimeter fencing and lighting, a key-pad gate system, 24-hour camera surveillance, automated remote leasing technology, and wide concrete driveways. Prior to its initial construction (2017) and subsequent expansion (2023), the current owner had no previous experience operating a self-storage facility. Consequently, an ECRI (Existing Customer Rate Increase) revenue management program has never been implemented, and the facility’s street rates remain approximately 20 percent below market – despite the fact that the median household income within a three-mile radius exceeds $95,000, the local trade area’s (three-mile) population base has grown by 64 percent since 2010, and population growth between 2023 – 2028 is expected to increase by an additional 5 percent. Compared to most secondary markets in Texas, Abilene, driven by its long-standing role as a major energy hub, continues to attract economic investment. In 2022, Lancium, a Houston-based energy technology firm, embarked on a $2.4-billion development project (set to unfold over the next five years) that will bring a large scale, renewable energy powered data center campus to an approximately 800-acre tract, most of which will be located inside the Abilene city limits. Additionally, Petrosmith, a leading oil and gas production equipment manufacturer, announced in 2024 they will be investing $25-million to bring an additional 250 skilled jobs with market-leading competitive wages to the market. Several universities, including Abilene Christian University and Hardin-Simmons University, are located in Abilene. Both have a combined enrollment of more than 6,000 students, and the universities keep the median age well below the national average. Abilene is also home to Dyess Air Force Base, which employs over 5,000 personnel, and will soon become the headquarters for the Air Force’s new B-21 bomber aircraft squadron, bringing an additional 2,000 personnel to the area. According to a July 2024 CoStar report, continued economic investment drove the local unemployment rate down to 2.9 percent (approximately 25 percent lower than the US average), year-over-year multifamily occupancy rates up to 90 percent (a 170-basis point increase compared to 2023), and multifamily asking rates up by more than 3 percent (200 basis points higher than the 1 percent US average). For these reasons, at a purchase price of $11,500,000, 1750 Storage Solutions should deliver attractive, unleveraged, broker-adjusted returns of approximately 6.50 percent by the end of Year One, and 8 percent by Year Five. In fact, as of August 2024, 55 percent of the facility’s tenants are paying rental rates below the facility’s current street rate, resulting in a monthly variance of $6,175. Furthermore, increasing the facility’s current street rates up to market averages will increase the facility’s Gross Potential Rent by $191,830 annually.