Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 2323 South Houston Avenue, Building 10, in Humble, Texas, leased to Enclosure Fabrication. The subject property consists of approximately 9,977 square feet of shallow-bay industrial space and is situated on 0.56 acres of land. The single-tenant asset features an 18’ clear height, two grade-level doors, metal construction, 400 amps, and nine parking spaces. Interstate 69 is a four-minute drive from the asset, which sits 3.6 miles east of George Bush Intercontinental Airport and 17.5 miles north of Downtown Houston. Delivered in 2024, the newly constructed property lowers exposure to capital expenditures, making this opportunity ideal for passive investors. With the passage of the One Big Beautiful Bill Act, this asset allows investors to take advantage of the accelerated 100 percent bonus depreciation. The tenant is signed to a triple-net lease at $12.48 per square foot that runs through February 2035. At 3.75 percent, the annual escalations are above the typical 2.7 percent market rate. Founded in 2020, Enclosure Fabrication is a leading manufacturer of custom-built steel and metal frames. The subject property is well-positioned within the relatively large Northeast Highway 90 submarket, containing nearly 35.0 million square feet of industrial space. In the 12 months through Q3 2025, 1.5 million square feet of industrial space was absorbed on net in the submarket. During that time, 1.3 million square feet of industrial space was added to the inventory. With demand outpacing supply, the vacancy rate bucked the national trend and fell by 110 basis points to 10.7 percent year-over-year in Q3. Contrary to the national narrative, annual rent growth in Northeast Highway 90 rebounded in 2025 to 3.5 percent in Q3, pushing the average asking rent to about $8.70 per square foot. With about 1.3 million square feet under construction in the last quarter of the year (representing 3.7 percent of inventory), supply will have a marginal impact on vacancies and rents in the near future (CoStar). 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.