The Imperial Valley Value-Add Portfolio is comprised of four facilities across 169,968 net rentable square feet. The portfolio offers 1,474 non-climate-controlled and drive-up units, 224 boat/RV parking spaces, 104 mailboxes, three billboards and two cell towers for a total of 1,807 units. Each property consists of an on-site managers apartment. The subject offers room for expansion and an opportunity to purchase a fifth facility from a separate owner. The portfolio is nearly stabilized with a physical occupancy of 81.1 percent. Each site utilizes electronic gating and 24-hour video surveillance to ensure secure self-storage. An investor has the unique opportunity to profit from a distinct market footprint; all facilities have a strong presence in their respective regions of Southern California.
The portfolio covers several major divisions of Imperial Valley, asserting market dominance throughout the corresponding cities of Brawley, Calexico and El Centro. Advantageously, the region has a low supply of 4.17 rentable square feet per person. The maximum driving distance between facilities is approximately 25 miles, allowing a regional manager to operate these sites seamlessly. Each property offers convenient access to the region’s major thoroughfares, including U.S. Highway 86, U.S. Highway 98 and Interstate 8. Each location is within close proximity to Imperial Avenue; this thoroughfare leads directly to the United States/Mexico border and has heavy traffic counts exceeding 30,000 daily.Imperial Valley is well-renowned for its agricultural prowess; the region has one of the largest growing seasons in the United States. It is a major source of winter fruits and vegetables, cotton, alfalfa and grain for U.S. and international markets. Imperial Valley is also a major center for the United States Military; the region is home to the U.S. Navy Flight Demonstration Squadron’s Blue Angels.
Acquisition of the Imperial Valley Value-Add Portfolio secures four assets in an undersupplied market with multiple upsides. The financial projections include a proforma cap rate of 6.56 percent in year one and 7.01 percent in year three. This capitalization rate is combined with overall strong forward-looking financials: in years five and seven are projected leveraged IRRs of 22.0 percent and 20.4 percent and cash-on-cash returns in years one and two are anticipated at 14.7 percent and 15.6 percent. An investor can capitalize by continuing to raise occupancies, in addition to implementing new management to establish systematic operations at each site. The portfolio represents a prime opportunity to invest in a market with minimal supply within a three-mile radius at all locations. Additionally, there is expansion opportunity at the Calexico-Highway 98 site to accommodate for the high demand for storage. Furthermore, a new owner will have the ability to scale revenue and leverage expenses with each property being situated within the Imperial Valley region of Southern California.
- Prime Opportunity to Acquire Four Storage Assets with a Significant Market Footprint in Southern California
- Current Low Supply of 4.17 Rentable Square Feet Per Person
- Implement Kiosk Service to Drastically Reduce On-Site Management Costs
- 11.82 Acres of Expansion Potential Adjacent to the Calexico-Highway 98 Site Available Separately
- Proforma Cap Rates of 6.56 Percent in Year One and 7.01 Percent in Year Three
- Years 5 & 7 Leveraged IRRs of 22.0 Percent and 20.4 Percent
- Years 1 & 2 Cash-on-Cash Returns of 14.7 Percent and 15.6 Percent
- Heavy Traffic Counts Throughout the Area With Close Proximity to the United States/Mexico Border
- Maximum Driving Distance of 25 Miles Between Facilities
- Ability to Gain Immediate Scale in the Imperial Valley Region of Southern California