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Texas City, TX

Species Gym

Address:
702 9th Avenue North, Texas City, TX 77590
Property Type:
Single Tenant
Price:
$1,864,000
Cap Rate:
9.50% cap
NOI:
$177,084
Square Feet:
26,832 sqft
Lot Size:
1.15 acres
Price Per Square Foot:
$69.47
Year Built:
1962/2022
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Investment Highlights

Investment Highlights

Investment Highlights

  • Property Sits in Proximate Access to Highway 146
  • Five-Year Triple-Net Lease in Place with Species Gym
  • Species Gym Has Four Locations Across Houston
  • With 21 Grade-Level Doors, Building Can Be Redeveloped into Mixed-Use
  • Recent Capital Expenditures on the Building to Bring Up to Date
  • Property is Within an Opportunity Zone As Well As 6th Street Revitalization Project

Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 702 9th Avenue North, in Texas City, Texas, leased to Species Gym. The subject property consists of approximately 26,832 square feet of industrial space and is situated on 1.15 acres of land. Previously occupied as an auto repair shop, the asset features 21 grade-level doors, and the property can easily be converted into mixed-use. To bring the property up to date, the asset has undergone nearly $320,000 in improvements to the sprinklers, roof, and HVAC system.

In February 2022, Species Gym signed a five-year triple net lease. With four locations circling the city of Houston, the popular local gym offers state-of-the-art personal fitness facilities designed for a variety of workout enthusiasts. Situated in an Opportunity Zone, the future owner of the subject property may be eligible for a capital gains tax abatement. The asset is also positioned just one block from the Downtown 6th Street District. Since the mid-2000’s, the Texas City Economic Development Corporation has assisted business owners along 6th Street in redeveloping their properties, which has generated more attention to the area (TCEDC).

With proximity to Highway 146, the asset resides within the East-Southeast Far submarket. Anchored by the booming Port of Houston, which ranks first in the nation in total waterborne tonnage, the submarket contains a massive 95.9 million square feet of industrial space. A year after experiencing the most deliveries on record, net absorption set a record of its own in 2021 at 5.2 million square feet. As a result, the vacancy rate has dropped from 11.0 percent in Q4 2020 to 6.4 percent during Q3 2022. At 5.6 percent in Q3, annual rent growth among industrial properties sits just 50 basis points below its 20-year high set during the previous quarter. With absorption expected to set a new record in 2022 at over 7 million square feet, the vacancy rate will likely fall further, keeping upward pressure on rents (CoStar).

As the fifth most populous metro area in the U.S., Houston houses over seven 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: ZAD0060891)