Back to Listings
Houston, TX

5236 Fidelity Street

Address:
5236 Fidelity Street, Houston, TX 77029
Property Type:
Multi Tenant
Price:
$8,250,000
Cap Rate:
6.33% cap
NOI:
$522,469
Square Feet:
127,245 sqft
Lot Size:
5 Acres
Price Per Square Foot:
$64.84
Year Built:
1967/1979/1987
Links
* By downloading the Marketing Package (Offering Memorandum) you hereby agree to the CONFIDENTIALITY AND BUYER REGISTRATION AGREEMENT.

Investment Highlights

Investment Highlights

Investment Highlights

  • Prime Access to Interstate 10 and Highway 610
  • 127,245-Square-Foot Multi-Tenant Warehouse with 100% Occupancy
  • Five-Year Leaseback in Place with Concannon Lumber, a Company in Business Since 1979
  • Two-Year NNN Lease Remaining with American Choice Rags at Below-Market Rent for Increased Return
  • Property has Eave Heights of 16’ to 18’ (20’ Clear Height) with Sprinklers and 20 Dock-High Doors
  • Potential Rail Service for Future Shipping or Distribution
  • 4.8% Rental Growth within the Last 12 Months (Costar)

Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 5236 Fidelity Street in Houston, Texas, anchored by the current owner Concannon Lumber Company. The subject property consists of approximately 127,245 square feet of space and is situated on 5.0 acres of land. The three-building asset features eave heights of 16’ to 18’, a clear height of 20’, sprinklers, and 20 dock-high doors. Situated adjacent to the Union Pacific Railroad Market Street Yard, the property offers potential cost-reduction rail service for shipping or distribution. The property also has prime access to Interstate 10 and Interstate 610 (a 38-mile loop around the inner city sector of the city of Houston, also known as Loop 610).

Upon sale of the property, Concannon Lumber Company will execute a five-year leaseback. Founded in 1979, Concannon trades, manufactures, and maintains inventories of lumber, plywood, and specialty forest products worldwide. With lumber prices trading for double its pre-pandemic level, Concannon has been a beneficiary of 40-year high inflation. The fully leased property is occupied by American Choice Rags, which has two years remaining on its triple-net lease. With the rent sitting below the average market rate, the property offers investors a value-add opportunity.

The subject property is located within Southeast Outer Loop, a relatively large submarket containing about 18.3 million square feet of industrial space. Logistics facilities dominate the local supply with 13.1 million square feet, followed by specialized and flex space at 4.8 million square feet and 400,000 square feet, respectively. Thanks to an annual net absorption of 643,036 square feet through Q1 2022 (representing a decade’s high), the vacancy rate dropped by 360 basis points to 6.8 percent during this time. As a result, annual market rent growth hit the highest level in over a decade at 5.0 percent in the first quarter. Industrial rents in Southeast Outer Loop run for about $5.94-per-square foot on average, offering tenants a 26 percent discount from the overall Houston market. Given that only one industrial property is under construction in Southeast Outer Loop, rent growth and vacancy rates will largely be unaffected by new supply for the foreseeable future (CoStar).

As the fifth most populous metro area in the U.S., the Houston area houses 7.1 million people in southeastern Texas. The market is composed of nine counties: Harris, Galveston, Brazoria, Fort Bend, Chambers, Montgomery, Austin, Liberty and Waller. The Gulf of Mexico, which borders the metro to the southeast, provides access to markets around the world via the Port of Houston, making it a prime location for import/export. Houston’s economy has diversified in recent years, with the healthcare and technology sectors showing strong growth. As Houston’s population continues to grow, primarily to the northwest, many companies are expanding to the region to provide goods and services to the increasing population.

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: ZAD0060113, ZAC0060539)