Shovel-Ready Storage Project Seeking Investment of $400-$700K

[Robert Howard]

I am a self-storage developer nearing design completion on a 107K square foot self-storage facility in Houston, TX and while I have obtained primary financing for the project, my firm is seeking an investor to fund a portion of the equity injection.

Executive Summary

The project, located in west Houston, is a 107,050 gross square foot multistory self-storage facility yielding 765 units and 81,000 net rentable square feet. The site is located on a major residential artery with over 32,000 cars per day and offers robust demographic appeal with 30% renters, median household income of $66,239 and an additional 2,600 households expected to enter the micro-market through 2019. The land is owned by Howard Developments and design for the project is currently 95% complete with building permit applications to be submitted mid-September 2016. A design/build contract is in place with leading self-storage constructor SBS Construction and a third party management agreement has been executed with CubeSmart. The overall development cost including land, construction, interest reserve and operational cash until stabilization is $7,322,000. Gross potential annual rent is estimated to be $13.76 per square foot with a 6.5% Income Capitalization Rate and a future value of the fully developed and income-stable facility of $10,600,000. The project funding has been approved through Live Oak Bank with a required equity injection of $657,000 and the developer is seeking a limited partner to fund all or part of the injection. Developer is prepared to guarantee a 12.5% return, negotiate percentage equity in the project or come to an alternative arrangement. It should be noted that the developer plans to sell the asset upon stabilization presenting both cash flow and lump sum payment opportunities.

Investment Highlights

− 107,050 gross square feet

− Gross potential annual rent of $13.76 per square foot

− 6.5% Income Capitalization Rate

− Total development cost of $7,322,000

− Future value of stabilized asset of $10,600,000

− Developer seeking investment of $432K to $657K

Additional Info

Upon request the following information can be forwarded for further review:

1. One page project summary

2. Pre-Development Feasibility Study

3. CubeSmart 7 Year Projections

4. Site Plan with Unit Mix

5. Building Elevations

6. Debt term sheet from Live Oak Bank