Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 1220 Mound Avenue in Racine, Wisconsin. The subject property consists of approximately 718,287 square feet of flex space and is situated on 13.46 acres of land. The multi-tenant asset features 15 suites, 10 dock-high doors, eight grade-level doors, a clear height of up to 32.5’, and 395 parking spaces including 10 handicapped and eight semi-truck stalls. With close proximity to the shores of Lake Michigan, the asset sits 30 miles south of Downtown Milwaukee via Interstate 41/94. The property is located in Racine East, a relatively large submarket with 36.1 million square feet of industrial space with an 8.1 percent vacancy rate and 3.7 percent rent growth during Q1 2024. Priced at $27.84 per square foot, the asset can be acquired well below replacement costs, and at 56 percent occupied, this sale offers investors a significant value-add opportunity anchored by a core group of tenants. The self-storage space (operated by third-party management company Store Here Self Storage) is the largest occupant, accounting for 226,518 square feet. A recent expansion was completed in April 2024, adding 250 units and 24,823 net rentable square feet, bringing the total to 534 climate-controlled units (including 10 offices) consisting of 65,045 square feet. The available space at the subject property allows for an additional 1,000 units. Thanks to a dense surrounding population base with about 84,855 people residing within a three-mile radius of the property, Store Here can accommodate further development in an undersaturated market that offers only 2.46 net rentable square feet per capita in the three-mile area. Two schools, 21st Century Preparatory School and Acelero Learning, occupy 67,819 square feet and 33,550 square feet, respectively. The nonprofit Failure Is Not An Option (F.I.N.A.O.) manages the Kingdom Manna food pantry, utilizing 9,011 square feet. Given that the schools and the food pantry both cater to financially disadvantaged children and families, there is a natural symmetry between the three tenants that creates a strong incentive for them to continuously renew their leases. Additionally, these core tenants can be regarded as a recession hedge thanks to the stability of school enrollment, sources of demand for self-storage, and the increase in food donations during times of economic duress. Given the economic uncertainty in 2024, the value of the subject property may outperform the overall market for the foreseeable future.