An investment in a stabilized self-storage property totaling 40,600 square feet located in Raleigh, NC. Currently 92% occupied. In place rents 10% below market, providing upside potential for new leases and renewals. Property located in a high-end submarket of Raleigh in the Town of Cary, close to high end retail, major interstate, and high end single family neighborhoods. Cary is consistently ranked as one the best places to live in the Country. Consists of 6 single story storage buildings located directly off of Chapel Hill Rd, which is the a main thoroughfare in Raleigh and Cary. The property offers flexible storage spaces and a variety of sizes as well as outdoor parking. The property has undergone significant upgrades over the last year including new roofs, upgraded security cameras, new access gate, updated exterior lighting, new paint on buildings and doors, and upgraded office.
Ranked #2 Place for Business and Careers by Forbes in 2018, it’s no surprise that Raleigh continues to be a leader in population growth, expanding at 3-4 times the pace of the overall U.S. New and expanding companies are attracted to the area by its well-educated labor pool, which is produced by three major universities. It is also home to Research Triangle Park, a nationally recognized complex that attracts multinational corporations.
According to REIS.com, as of the fourth quarter of 2018 (the most recent report as of the date of this opinion) the national vacancy rate was 13.4%, up 150 basis points over the third quarter of 2018 vacancy rate and up 180 basis points over the level found one year ago and up 260 basis points from the cycle-low vacancy rate of 9.2%, found during the second quarter of 2016. Marcus and Millichap reported a similar increase of 40 basis points to reach a vacancy rate of 10.0% within its 2018 Second Half Outlook. The Marcus and Millichap report notes that demand for storage space continues to strengthen with a healthy job market and rising wages. Though demand is near peak, new construction has pushed beyond demand forcing the vacancy to increase, although the vacancy rate has hovered in the same range for the past year. Areas of oversaturation already exist characterized by greater concessions, lower occupancy and negative rent growth. Nonetheless, on the whole, the market remains intact. Despite predictions of doom and gloom the reality is a more balanced market than analysts had forecast.
Self-storage has historically seen much greater swings in fundamentals year-over-year than the other major commercial real estate product types, as is evidenced by the 180 basis point increase in vacancy rate between the fourth quarter of 2017 and the fourth quarter of 2018.
The forecast nationally is for vacancy rates to rise, albeit at a slower pace than had previously been forecast. Elevated consumption, related to increasing multifamily lifestyles, where residents do not have room to accommodate all of their belongings, is expected to result in stable demand; however, new development will likely outpace demand in 2019. The forecast from REIS calls for a vacancy rate of 12.8% by year-end 2019 with a stabilization thereafter with the vacancy rate remaining under 13.0% throughout the five-year forecast horizon. Asking rental rate growth across the nation was positive in 2018, with rental rate escalation forecast (when year-end numbers are completed) at 1.3% for non-climate controlled and 0.5% for climate controlled.
Go Store It offers a wide range of sizes including traditional non-climate control, climate controlled, and parking. Go Store It currently operate 28 storage locations in 7 States.
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