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Odessa, TX

Industrial Insulation & Sheet Metal Inc.

Address:
3339 Kermit Highway, Odessa, TX 79764
Property Type:
Multi Tenant
Price:
$2,668,000
Cap Rate:
9.50% cap
NOI:
$253,512
Square Feet:
28,168 sqft
Lot Size:
2.47 Acres
Price Per Square Foot:
$94.72
Year Built:
1974
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Investment Highlights

Investment Highlights

Investment Highlights

  • 28,168 Square Feet of Industrial Space Situated on 2.47 Acres
  • Two Tiltwall Buildings and One Metal Construction, Featuring 15 Grade-Level Doors and Ability to Subdivide
  • Fully Paved Lot for Excess Outside Storage and Parking
  • High Visibility with Easy Access to Major Thoroughfares
  • Industrial Insulation and Sheet Metal (IISMI) – Services Oil and Gas, Construction, and Public Sector
  • IISMI Offering Short-Term Sale-Leaseback with Plans to Consolidate and Renew Lease
  • Value-Add Opportunity to Backfill Remaining Space in Emerging Odessa Market

Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 3339 Kermit Highway in Odessa, Texas, occupied by the current owner, Industrial Insulation & Sheet Metal, Inc. (IISMI). The subject property consists of approximately 28,168 square feet of warehouse space and is situated on 2.47 acres of land. The three-building asset features two tilt-wall buildings and one metal constructed property. With a total of 15 grade-level doors, each building can easily be subdivided. Tenant parking and outside storage space are both easily accommodated by a large, fully paved lot.

Upon sale of the property, IISMI plans to initially sign a one-year lease with the new owner, allotting time to consolidate into 10,076 square feet of the property. Afterwards, IISMI plans to renew the leaseback for an additional three years. The property can then be owned for partial owner-use or as an investment opportunity to backfill the remaining space, and potentially generate above-market returns. For nearly six decades, IISMI has specialized in the fabrication, installation, and service of a variety of products for the oil and gas industry, construction, and public sector.

Located less than three miles from downtown Odessa, the highly visible property has frontage along Kermit Highway, and easy access to State Highway 302 (Loop 338) and Interstate 20. The Odessa market contains 12.1 million square feet of industrial space, 6.5 percent of which has been delivered since 2019. Along with falling absorption rates, the new deliveries pushed up the vacancy rate from 2.1 percent in Q2 2019 to 12.9 percent by Q3 2022. Despite the rise in vacancies, market rent growth remained just above the three-year average at 5.3 percent annually during Q3 (CoStar). While oil and gas prices experienced a pull-back during the summer of 2022, the ongoing global inflationary environment will continue to put upward pressure on both commodities, making Odessa a primary beneficiary.

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 the economic driving force. The two largest cities are Midland with over 140,000 residents and Odessa with roughly 123,000 residents.

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: ZAD0061064)