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Midland, TX

10104-10204 Farm to Market 307

Address:
10104 Farm to Market 307, Midland, TX 79706
Property Type:
Multi Tenant
Price:
$2,900,000
Cap Rate:
11.06% cap
NOI:
$320,625
Square Feet:
21,375 sqft
Lot Size:
3.52 Acres
Price Per Square Foot:
$135.67
Year Built:
2014/2019
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Investment Highlights

Investment Highlights

Investment Highlights

  • Two-Building Industrial Portfolio Totaling 21,375 Square Feet, Situated on 3.52 Acres
  • Metal Construction Featuring Six Total Grade-Level Doors and 2,250 Square Feet of Office
  • Six-Month Triple-Net Leaseback with Roofs by Nicholas Inc.
  • Investor Lease-Up Opportunity to Backfill Buildings and Achieve-Above Market Return
  • 7.6% Average Cap Rate for On-Market Industrial Property Built After 2000 (CoStar)
  • Frontage Along Farm to Market 307, Providing Easy Access to Interstate 20

Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the portfolio located at 10104 and 10204 Farm to Market Road 307 in Midland, Texas, occupied by the owner, Roofs by Nicholas Inc. The subject portfolio consists of approximately 21,375 square feet of warehouse space and is situated on 3.52 acres of land. The modern two-building asset features metal construction, six grade-level doors, and 2,250 square feet of office space. Upon sale of the property, Roofs by Nicholas Inc. plans to execute a six-month triple-net lease. As a short-term leaseback, investors have a lease-up opportunity to backfill the two buildings and potentially achieve above-market returns. With frontage along Farm to Market Road 307, the property has easy access to Interstate 20.

Midland is a relatively small market, containing 16.6 million square feet of industrial space centered around the oil and natural gas industry. Over the last four quarters, the market has experienced some volatility, but the vacancy rate trended down to 6.9 percent by Q3 2022. While market rent growth slowed to 5.1 percent in Q3 year-over-year, the rate remains 80 basis points higher than its 10-year average. Among comparable industrial properties developed after 2000, market cap rates in Midland stood at 7.6 percent in Q3, nearly 140 basis points higher than the average nationwide. With industrial construction activity representing less than 1 percent of inventory, there are essentially no supply-side pressures on rents and vacancies for the foreseeable future (CoStar). While oil and gas prices experienced a pull-back during the summer of 2022, the stars are aligning for a new cyclical bull market in both commodities. As the Federal Reserve struggles to tame inflation, an energy shortage is sweeping throughout Europe and foreign demand can easily spillover into America’s market. Midland’s bright future presents a prime opportunity for industrial investors today.

Located in West Texas, the Midland-Odessa metro is considered to be an energy capital as the Permian Basin is one of the biggest oil fields in the world and is home to some of the largest petroleum-producing companies. The metro consists of Martin, Midland, and Ector counties. The public sector is a top job provider, but the private sector is driving the economic growth. The two largest cities are Midland with over 140,000 residents and Odessa with roughly 123,000 residents. Midland is the center of America’s oil and gas production. Petroleum production and all things in between are prevalent in the area, but Midland is making great efforts and success in diversifying into additional industries such as aerospace. Interstate 20 runs through Midland, making it easy to transport goods and raw materials throughout the country. Rated the No. 1 state for business by U.S. corporate executives, this is an excellent place to start or grow a business in Texas. (midlandtxedc.com). Major employers include: Halliburton, Hilliard, Legacy Reserves, Midland College, Midland Health, Patterson-UTI, Pioneer Natural Resources, Schlumberger, Weatherford, Baker Hughes, Chevron, ConocoPhillips, Bloomberg, and more.

As the largest single source of oil and gas deposits in the United States, Odessa has long been known for its rich resources. New businesses have come to the city that have helped diversify the economy as well as reinforce the quality-of-life standards. Odessa proudly boasts world-class cultural and recreational facilities as well as healthcare and transportation often associated with larger cities. It also serves as the crucial midpoint between Fort Worth and El Paso. Lucrative financial incentives, site selection, logistics, qualified workforce, easy access to foreign markets, and low cost-of-living make it easy to do business (odessatex.com). Major industries include: medical, energy, distribution, manufacturing, and technology.

This information has been secured from sources we believe to be reliable, but we make no representations or warranties, express or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Marcus & Millichap is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2022 Marcus & Millichap. All rights reserved. (Activity ID: ZAD0060942)