I-17 Self-Storage Opportunity – Phoenix, AZ

The I-17 Self-Storage represents a best-in-class facility that spans 88,052 net rentable square feet with plenty of expansion opportunities. The property is strategically located less than a quarter mile west of I-17 and is highly visible from both the north and south-bound lanes of the interstate. Built in 2019, the facility consists of a combined total unit count of 1,021 which includes climate, non-climate, and parking. In addition to the existing units, there is an exceptional value add opportunity which involves the potential relocation of the 15×60 RV spaces to add more drive-up, non-climate units to the property. The property utilizes 24-hour video surveillance and electronic gating to guarantee secure storage.

This facility offers premium access to multiple major thoroughfares which include but aren’t limited to I-17 which sees 142,394 VPD and Black Canyon Highway. With a population of 193,062 in the 3-mile, the I-17 opportunity presents excellent demographics and strong lease-up seeing the property sitting at 90% physical and 51% economic currently. With the increase of economic occupancy to match the physical occupancy, there is a substantial upside that can be realized from day one. In addition, there are several under construction and proposed multifamily developments within the three-mile which only increases the overall potential of the facility.

This is a rare opportunity to acquire a Class-A build in a growth market where a buyer can capitalize on multiple upsides including rapid lease-up and strong market fundamentals. This is an ideal storage investment to grow one’s footprint in one of the nation’s top self-storage markets.

Investment Highlights

• SELF-STORAGE TRIPLE THREAT: 27th Avenue is the only modern self storage facility within its competitive set to contain Climate Controlled, Drive-up
  Non-Climate Controlled, and RV/Parking. The diverse unit mix has led to strong positive net absorption through the first 18 months of operation
• STRONG VISIBILITY FROM I-17: The subject site has visibility and access along I-17, which has a daily traffic count of 142,000 cars per day
• DENSE POPULATION AND HIGH AVERAGE INCOMES: 193,000 people with an average household income of $58,409 live within a 3-Mile Radius
• STRONG POPULATION GROWTH: Since 2010, the 3-Mile radius population has increased from 175,000 to 193,000 (10.7%) Over the next five years, the 3-Mile radius is expected to grow by 4,700 households and increase the population to 205,732 (6.6% growth)
• LOW CLIMATE-CONTROLLED SF PER CAPITA AND LIMITED NEW GENERATION PRODUCT: Only 47% of the market is climate-controlled space (4.0 sf per capita). Several assets in the competitive set consists of older antiquated product. The average age of the existing stock is 32 years
• ROBUST POSITIVE NET ABSORPTION: Since opening the asset in December 2019, the asset has averaged 102 rentals a month. The positive net  absorption outperformance showcases the unmet demand in the submarket and prospective tenant’s desire to occupy a modern self storage facility opposed to older antiquated product
• POSITIVE CASH FLOW: In June 2021, the self storage is 87.3% leased and the RV parking is 63.6% leased. The asset is approaching physical stabilization and is expected to generate $756,735 of NOI in Year 1
• VALUE-ADD BUSINESS PLAN: The business plan contemplates (i) converting 38 RV Spaces to 68 NCC units and 12 RV Spaces and (ii) converting building 4 into 38 NCC units. The conversion and expansion increase GPI by $191,604 per year (Year 5 stabilized NOI $1,313,615)