Memphis MSA Self Storage Portfolio

Memphis MSA Self Storage Portfolio2019-12-19T16:17:28-05:00

Project Description

The Memphis MSA Self Storage Portfolio is Under LOI.

UNDER LOI
NRSF – 490,187

Multiple Addresses
Memphis, TN MSA

The Memphis MSA Self Storage Portfolio is comprised of eight facilities across 490,187 net rentable square feet. The portfolio offers 296 climate-controlled units, 3,186 non-climate-controlled and drive-up units, 384 boat/RV parking spaces and one commercial office space for a total of 3,867 units. The Titus, Country Park and Winchester properties offer an on-site manager’s apartment. The Country Park apartment was newly renovated and all three apartments are currently occupied. Each property has recently completed various capital improvements, including unit conversions, painting and LED retrofitting, among other beneficial upgrades. The portfolio has a strong physical occupancy of 93.9 percent, which is indicative of the demand for storage within the Memphis Metro Area. 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 Memphis.

The portfolio covers several major divisions of Memphis, asserting market dominance throughout the MSA. The maximum driving distance between facilities is 37.5 miles, allowing a regional manager to operate these sites seamlessly. Each property offers convenient access to the region’s major thoroughfares, including Interstate 240, Interstate 55 and Interstate 40. The portfolio benefits from its location in the 42nd largest metro area in the United States; Memphis is the third largest city in the Southeastern United States and the eighth largest in the Southern United States.

Acquisition of the Memphis MSA Self Storage Portfolio secures eight stabilized assets in a densely-populated MSA with multiple upsides. The financial upsides include a proforma cap rate of 8.74 percent. This capitalization rate is combined with overall strong forward-looking financials: in years five and seven are projected leveraged IRRs of 35.9 percent and 31.3 percent, and cash-on-cash returns in years one and two are anticipated at 17.4 percent and 20.4 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 across the portfolio 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 in the same MSA.

Investment Highlights:

  • Prime Opportunity to Acquire Eight Stabilized Assets with a Significant Market Footprint in the Memphis MSA
  • High Portfolio-Wide Physical Occupancy of 93.9 Percent
  • Proforma Cap Rate of 8.74 Percent
  • Years 5 & 7 Leveraged IRRs of 35.9 Percent and 31.3 Percent
  • Years 1 & 2 Cash-on-Cash Returns of 17.4 Percent and 20.4 Percent
  • Minimal Supply Within a Three-Mile Radius at Each Location
  • Maximum Driving Distance of 37.5 Miles Between Facilities
  • Implement a Regional Manager to Increase Efficiency and Operations at Each Site
  • Various Capital Improvements Across the Portfolio
  • Capitalize by Scaling Revenue and Leveraging Expenses