Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 1931 North Grimes Street in Hobbs, New Mexico, leased to Bridgestone HosePower, LLC. The subject property consists of approximately 8,177 square feet of warehouse space and is situated on 1.22 acres of land. The single-tenant asset features metal construction, three grade-level doors, asphalt paving, and a clear height of 16’. Situated near multiple retail establishments, the property is ideal for high-traffic industrial operations. In May 2023, Bridgestone HosePower signed a five-year triple-net lease at $7.63 per square foot, with 2.0 percent annual escalations. As a fully owned subsidiary of Bridgestone Corporation, HosePower is the largest mobile hose repair service fleet in the country (HosePower.com). Strategically located in the oil-rich Permian Basin, the property sits 90 miles Northwest of Odessa, Texas in the Hobbs industrial market. Housing 1.3 million square feet of industrial space, Hobbs is a relatively small market with promising fundamentals. Unlike most markets across the nation, the vacancy rate in Hobbs has fallen in 2023, down 250 basis points to 4.6 percent in Q3. Despite the reduction in availability, annual market rent growth slowed to 4.1 percent during this time. The average market cap rate in Hobbs rose to 8.2 percent during the third quarter, offering investors a 130-basis point premium over the national average. With no industrial properties under construction in the last quarter of 2023, new supply will be a nonfactor on rents or vacancies for the foreseeable future (CoStar). Given how much oil prices impact industrial markets in the Permian Basin, the outlook for Hobbs looks promising. The price of oil rebounded 29 percent from its March lows to about $84 in late October and could move higher in the near future for a number of reasons as high inflation continues to linger. Top oil exporters Saudi Arabia and Russia have cut back on production to prop up prices (CNBC.com). Equally as important, after depleting the Strategic Petroleum Reserve to the lowest level since 1983, the Department of Energy appears to be ready to begin refilling the SPR given its most recent acquisition of 296,000 barrels of oil in July (EIA.gov). As the largest single source of oil and gas deposits in the United States, Odessa has long been known for its rich resources. New businesses have come to the city that have helped diversify the economy as well as reinforce the quality-of-life standards. Odessa proudly boasts world-class cultural and recreational facilities as well as healthcare and transportation often associated with larger cities. It also serves as the crucial midpoint between Fort Worth and El Paso. Lucrative financial incentives, site selection, logistics, qualified workforce, easy access to foreign markets, and low cost-of-living make it easy to do business (odessatex.com). Major industries include: medical, energy, distribution, manufacturing, and technology.