July 11, 2024
We are pleased to announce we have placed a 77,000 sf self storage facility in Reno, Nevada under contract and anticipate closing at the end of August. The purchase price is $6.6M (total anticipated costs inclusive of capex is $7.7M) and we will be raising $3.1M.
The subject property is in the southeast of Reno adjacent to Reno-Tahoe International Airport. Deal highlights below, please feel free to reach out to Bryan or myself if you are interested in investing. We anticipate filling up quickly given the attractive risk-return profile of this deal.
1. Off market transaction: Truly off market deal that was offered to ourselves and another private group. We were able to act quickly without needing to go to formal investment committee and thus secured the deal faster than the other party. The property is currently owned by a syndicate that would like to move their capital into another real estate deal (hence motivation to sell).
2. 40% below market rents: The property has been mismanaged and rents are over 40% below market (current rents $0.61 and market is $1+). We look for deals where rents are 25%+ off market but it is rare we find a property where rents are this far from market.
3. Priced below replacement cost: At $85/ft, this property is being purchased below replacement cost.
4. Business plan: Our plan is to complete the deferred capex (broken doors, paint, asphalt upgrade, security, curb appeal, etc.) and raise rents to market. We have been collaborating with Extra Space on market rents and they are excited to run the day-to-day property management for us.
5. Attractive returns: We anticipate a 16.5% net IRR to LPs and 1.9x equity multiple over the 5 year hold period.