Bakke, BCDC to Develop Self-Storage Projects Across Texas
The partnership has already broken ground on two projects encompassing 1,500 units in McAllen and Brownsville, Texas.
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Bakke Development Corp. and Batson-Cook Development Co. have formed a partnership to develop self-storage facilities across Texas.
The joint venture has already begun construction on two Class A, climate-controlled facilities in Brownsville and McAllen in SouthTexas. The two facilities total roughly 175,000 square feet, encompassing more than 1,500 units. Susser Bank provided senior debt for both projects. The partnership is working with Alamo Architects and Independent Contractors to deliver the facilities.
The Brownsville project will sit on 2.3 acres located on Ruben Torres Boulevard, just west of one of the state's most highly visited HEB grocery stores. The facility will comprise 781 units across 87,250 square feet. The asset will be accessible via a major north-central Brownsville thoroughfare that runs east/west. Construction on the project is estimated to be completed by July 2023.
The McAllen development will rise three stories on 2.8 acres, encompassing 86,000 square feet and 781 units. Located on Trenton road, the asset is set to include a security system that incorporates CCTV as well as key card access points. The building design includes a loading dock and two service elevators for ease of access. The joint venture aims to deliver the facility by the first quarter of 2023.
Lone Star Storage
As the state of origin for the modern self-storage facility, the Texas storage market is highly lucrative for investors. Texas is regularly among the top states in terms of population growth, and the more recent migratory exodus to the Sun Belt markets has only strengthened that claim. And while the development of new facilities saw a slight slowdown during the harshest of pandemic conditions, the result was higher demand at existing facilities — a refreshing change in what was once considered an oversaturated market.
Further market drivers include the ongoing trend of downsizing households that can be observed in markets across the country. Additionally, the influx of businesses downsizing or shuttering up permanently has made a significant impact in the Sun Belt metros, especially in Houston, causing a spike in demand for inventory storage.
Better still, as a report from Yardi Matrix highlights, the demand is working in tandem with continually rising rent growth. Houston alone saw year-over-year rent increases — for both climate- and non-climate-controlled units — reach 9%.
Related Questions
What are the benefits of investing in self-storage projects in Texas?
Investing in self-storage projects in Texas can be a great way to generate strong cash flow and ROI. Texas is one of the most populous states in the US, with a growing population and job market. This means that demand for self-storage space is likely to remain high in the state. Additionally, Texas is home to many universities, residential areas, and businesses, making it an ideal location for self-storage facilities.
When investing in self-storage projects in Texas, it's important to consider the local market conditions. Look at population and job growth, the number of homeowners and renters in the area, and the proximity to universities, residential areas, and businesses. By doing your research on the local market conditions, you can get a better understanding of whether or not buying a particular property would make sense.
When it comes to financing self-storage projects in Texas, there are a variety of loan products available. These include traditional bank loans, SBA loans, and private money loans. Each loan product has its own set of terms and conditions, so it's important to do your research and find the best option for your needs.
What are the risks associated with developing self-storage projects in Texas?
When considering investing in self-storage projects in Texas, it's important to consider the local market conditions, competition within the market radius, and the saturation level of the market. It's also important to consider the potential risks associated with developing self-storage projects in Texas. These risks include:
- The potential for oversupply in the market, which could lead to decreased occupancy rates and lower rental rates.
- The potential for increased competition from other self-storage projects in the area.
- The potential for increased construction costs due to the high cost of land in Texas.
- The potential for increased operating costs due to the high cost of labor in Texas.
- The potential for increased taxes and fees due to the high tax rate in Texas.
It's important to consider these risks when investing in self-storage projects in Texas. It's also important to do your research and consult with a knowledgeable real estate professional to ensure that you are making an informed decision. Sources: Multi-Housing News, Self Storage Talk.
What are the most important factors to consider when developing self-storage projects in Texas?
When developing self-storage projects in Texas, it's important to consider the population and job growth, the ratio of homeowners to renters, and the proximity to university campuses, residential areas, and businesses. It's also important to analyze the competition within the market radius and the saturation level of the market. The saturation level of an area is measured by the gross square feet of storage space available per person. Currently, the average self-storage inventory per capita across the country is around 7 to 8 net square feet.
What are the best locations for self-storage projects in Texas?
Texas is one of the top locations for self-storage projects according to this article. Merit Hill Capital has a large footprint in Texas, with 15.6 million square feet across more than 200 properties. National Storage Affiliates is also active in Texas, with a sizable proportion of their portfolio located in the state.
What are the most successful strategies for developing self-storage projects in Texas?
When developing self-storage projects in Texas, it is important to consider the local market conditions, competition, and saturation level. It is also important to consider the population and job growth, the number of homeowners or renters in the area, and the proximity to university campuses, residential areas, or businesses.
When analyzing the competition in the area, it is helpful to look at the saturation level of the market. The saturation level of an area is measured by the gross square feet of storage space available per person. Currently, the average self-storage inventory per capita across the country is around 7 to 8 net square feet. A market with a per-capita inventory above the U.S. average is usually considered oversupplied, whereas anything below is undersupplied.
In addition, it is important to consider the cost of construction and the potential return on investment. It is also important to consider the cost of land, the cost of labor, and the cost of materials. Finally, it is important to consider the potential for future growth and the potential for long-term success.
What are the most common mistakes made when developing self-storage projects in Texas?
The most common mistakes made when developing self-storage projects in Texas are failing to do proper market research, not considering the competition in the area, and not understanding the saturation level of the market. It's important to look at the surrounding market conditions, such as population and job growth, the number of homeowners or renters in the area, and the location's proximity to university campuses, residential areas, or businesses. It's also important to consider the level of competition within the chosen market radius, as well as the saturation level of the market. According to Multi-Housing News, the average self-storage inventory per capita across the country is around 7 to 8 net square feet. A market with a per-capita inventory above the U.S. average is usually considered oversupplied, whereas anything below is undersupplied.