Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 331 Corporate Woods Drive, Building F, in Magnolia, Texas, leased to VAM Foods LLC. The subject property consists of approximately 11,957 square feet of Class A cold storage space and is situated on 0.27 acres of land. Delivered in 2021, the single-tenant asset features about 3,223 square feet of office space, two cross dock-high doors, two truck wells, Kingspan insulated metal panels, 1,200-amp power, and a clear height of 23’ to 30’. The state-of-the-art Mobile Rack System has the capacity of 777 pallet positions for maximum storage efficiency. Given the higher development costs of cold storage space and the limited availability of small cold storage facilities in the Houston market, this property is considered an irreplaceable core asset to the tenant. In July 2023, VAM Foods began a three-year triple-net lease with 3.0 percent annual rent escalations and two renewal options at three years each. VAM Foods is a leading national processed food manufacturer and prepared food supplier for the 250-plus stores of The Michoacana Meat Market. Located just off of Farm to Market Road 1488, the property is strategically positioned to access major thoroughfares such as Interstate 45 in the Woodlands/Conroe submarket. Woodlands/Conroe is a relatively large submarket, containing 33 million square feet of industrial space. Over the last year, the vacancies have fluctuated, but remain at a low rate of just 3.8 percent during Q3 2023. Annual market rent growth has matched vacancies at 3.8 percent. In recent years, the Woodlands/Conroe submarket has experienced significant growth with the inventory expanding by nearly 23 percent since 2020. During Q3 2023, 1.9 million square feet of industrial space was under construction in Woodlands/Conroe, representing 5.8 percent of inventory. Given that there is only about 66,000 square feet of cold storage space under 50,000 square feet in the pipeline (CoStar), new supply will have a minimum impact on comparable properties for the foreseeable future. As the fifth most populous metro area in the U.S., Houston houses over seven million people in southeastern Texas. The market is composed of nine counties: Harris, Galveston, Brazoria, Fort Bend, Chambers, Montgomery, Austin, Liberty, and Waller. The Gulf of Mexico, which borders the metro to the southeast, provides access to markets around the world via the Port of Houston, making it a prime location for import/export. Houston’s economy has diversified in recent years, with the healthcare and technology sectors showing strong growth. As Houston’s population continues to grow, primarily to the northwest, many companies are expanding to the region to provide goods and services to the increasing population.