- Rents Approximately 50 Percent Below Market
- 24,597 Daily Traffic Counts – Fronts on Spring Cypress Road at a Signalized Intersection
- 8% Pro Forma Cap Rate – 40 Percent Economic Vacancy
- 529 Units | 74,845 NRSF
- Average Household Income – $98,584
- Rapidly Growing Area – 3 Mile Population Grew Around 29.05% From 2010-2019
Spring Cypress Storage Solutions is a 74,845 net rentable square foot self storage facility located in Spring, Texas, which is a north Houston suburb. The property sits on around 4.5 acres with nine single story buildings consisting of 529 units (478 mini-storage & 51 covered and outdoor parking spaces). The facility was constructed in several phases from 2003 to 2016 with about half of the property being developed since 2014. The facility has numerous amenities including, but not limited to, video surveillance throughout the property, key code access, roll-up doors, concrete driveways, and a full-service on-site manager’s office.
The facility is located in a rapidly growing area of Spring where the three-mile population grew by nearly 30 percent in the past decade. Currently there are around 90,000 residents within three miles of Spring Cypress Storage Solutions and another eight percent growth is projected over the next five years. The average household income is close to $100,000 within three miles and is $110,000 in a one-mile radius. Spring Cypress Storage Solutions fronts on Spring Cypress Road which is a primary northwestern suburban thoroughfare connecting US 290 to Interstate 45. The facility benefits from traffic counts of around 25,000 and easy access in and out of the property because it sits at a signalized intersection.
There are solid economic drivers that lend stability to Spring Cypress Storage Solutions. The property is about three miles from the ExxonMobil Houston offices in Springwoods Village which is a twenty building, 3,000,000 square foot campus designed to accommodate 10,000 employees. Other major employers with a large footprint nearby include CHI St.Lukes, HP, and Southwestern Energy.
The asset is owned and operated by a husband and wife and this is the only self-storage facility they own. The facility doesn’t offer tenant insurance and isn’t utilizing marketing processes that more sophisticated professional management companies provide. Consequently, in place rents are $5.55 which is basically half of what the market leaders are achieving. At $5,980,000 the facility is priced at just $80/NRSF which is around what it would cost to replicate a new facility. The owner actually converted 10 self storage units into office space and operates his accounting practice out of the storage facility. The owner is wishing to lease back the office space, which will provide a steady ancillary income stream for the new owner. Additional upside could be created by climatizing around 20,000 square feet of interior hallway units. By achieving occupancies and rents in-line with the middle of the market an investor would see proforma returns north of eight percent on an unlevered basis.