Property Details
Stabilized Occupancy  Stabilized Cashflow  Repositioning Opportunity 
Asset Profile
Value Add

Des Moines Self Storage

Des Moines, IA

Self-Storage Property

This deal is oversubscribed

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Southwestern Property Corp. Denver, CO
Southwestern Property Corp.
  • IRR 19.03%
  • Equity Multiple 1.95x
  • Hold Period 4Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash N/A
  • Stabilized Cash on Cash 11.73% in Y4
  • First Distribution Sep 2023
  • Distribution Frequency Quarterly
  • Co-Investment 10% ($149K)
  • Preferred Return 8%
  • Investor Profit Share 70%
  • Asset Profile Value Add
  • Loan-to-Value 70%
  • Current Occupancy 0%

About this Property

"Des Moines Self Storage is a Class A+ Self Storage redevelopment of a 91,096 square foot former department store. The project consists of 688 units and 67,940 net rentable square feet. Numerous nearby employers and lifestyle amenities indicate that the property is well suited for easy access to nearby residents."

- Mark Campbell, Southwestern Property Corp.

Address 2590 Hubbell Ave
Square Footage 91,096 sq. ft.
# of Planned Units 688
Market Occupancy 92%
Average Market Rents $114.
Total Project Cost $5,026,560
Stabilized Loan to Value 50.9%

 

Top Questions

All answers are provided by the sponsor, Southwestern Property Corp., or its representatives.

 

Why are you buying the Property?

Mark Campbell, Southwestern Property Corp.: "Southwestern Property Corp. is sponsoring the purchase of the Property, which offers a low basis of $13.17 per square foot. The cost to build a similar building today would be over $200 per square foot. The property is in good condition, as there was a tenant occupying it recently, making the renovation cost lower than most conversions."

"The Population within 10-12 minutes drive is 106,789; Median household income within 10-12 minutes is $61,479."

"There is ample demand for self storage in this market, in the subject area the supply is 5.8 square feet per person indicating strong pent-up demand. By comparison, the national average is 10 square feet per person of existing supply. The Des Moines market is experiencing an influx of relocation from multinational companies such as Amazon, Microsoft and Facebook."

 

What are the most important aspects of this investment opportunity for the investors?

Mark Campbell, Southwestern Property Corp.:

  1. "Low cost basis allowing for competetive advantage"
  2. “The building is in good condition”
  3. "Strong pent up demand for self storage"
  4. "Reduced risk through adaptive reuse"
  5. "19.03% projected Investor IRR"
  6. "Managed by Cubesmart, a national self storage REIT"

 

What is your investment strategy/business plan for the Property?

Mark Campbell, Southwestern Property Corp.: "Southwestern Property Corp. will develop Des Moines Self Storage a Class A+ Climate Controlled Storage facility in the Des Moines MSA which will be managed by CubeSmart. The project is to be built in an existing commercial location where strong population and traffic exists. The facility will be built over a 9 month period and stabilized over three years with a projected sale in year 4 maximizing investor return. The project is being built to institutional standards and being managed by CubeSmart which will make it attractive to REIT buyers on sale in order to maximize sales price."

 

How has COVID-19 impacted your business plan?

Mark Campbell, Southwestern Property Corp.: "COVID - 19 has impacted the business plan in positive ways, as it has created a population that is moving more than in the past. As a result storage is more in demand. Further, Self-storage was the best performing asset class during the Great Recession. As a result of this performance history the asset class has become more desirable. Additionally, as investment shifts from Office and Retail projects which are no longer desirable the demand for Self-Storage ownership has increased likely resulting in higher than historical sales prices in the future. Recent reductions in interest rates as a result of COVID -19 have also helped this project by decreasing the cost of construction debt."

 

What are the risks and how are you mitigating those risks?

Mark Campbell, Southwestern Property Corp.: "The largest risks associated with a development of this nature are during the entitlement and construction phases of the project. Southwestern Property Corp is reducing this risk through an adaptive reuse of a current existing building."

"Stabilization risk also exists to some degree and that is mitigated by hiring CubeSmart as a third party manager. Using a national manager like CubeSmart strongly impacts the ability to use brand recognition to lease up the facility rapidly."

 

NOTE: All answers provided by the sponsor, Southwestern Property Corp., or its representatives.

About this Property

"Des Moines Self Storage is a Class A+ Self Storage redevelopment of a 91,096 square foot former department store. The project consists of 688 units and 67,940 net rentable square feet. Numerous nearby employers and lifestyle amenities indicate that the property is well suited for easy access to nearby residents."

- Mark Campbell, Southwestern Property Corp.

Address 2590 Hubbell Ave
Square Footage 91,096 sq. ft.
# of Planned Units 688
Market Occupancy 92%
Average Market Rents $114.
Total Project Cost $5,026,560
Stabilized Loan to Value 50.9%

 

Top Questions

All answers are provided by the sponsor, Southwestern Property Corp., or its representatives.

 

Why are you buying the Property?

Mark Campbell, Southwestern Property Corp.: "Southwestern Property Corp. is sponsoring the purchase of the Property, which offers a low basis of $13.17 per square foot. The cost to build a similar building today would be over $200 per square foot. The property is in good condition, as there was a tenant occupying it recently, making the renovation cost lower than most conversions."

"The Population within 10-12 minutes drive is 106,789; Median household income within 10-12 minutes is $61,479."

"There is ample demand for self storage in this market, in the subject area the supply is 5.8 square feet per person indicating strong pent-up demand. By comparison, the national average is 10 square feet per person of existing supply. The Des Moines market is experiencing an influx of relocation from multinational companies such as Amazon, Microsoft and Facebook."

 

What are the most important aspects of this investment opportunity for the investors?

Mark Campbell, Southwestern Property Corp.:

  1. "Low cost basis allowing for competetive advantage"
  2. “The building is in good condition”
  3. "Strong pent up demand for self storage"
  4. "Reduced risk through adaptive reuse"
  5. "19.03% projected Investor IRR"
  6. "Managed by Cubesmart, a national self storage REIT"

 

What is your investment strategy/business plan for the Property?

Mark Campbell, Southwestern Property Corp.: "Southwestern Property Corp. will develop Des Moines Self Storage a Class A+ Climate Controlled Storage facility in the Des Moines MSA which will be managed by CubeSmart. The project is to be built in an existing commercial location where strong population and traffic exists. The facility will be built over a 9 month period and stabilized over three years with a projected sale in year 4 maximizing investor return. The project is being built to institutional standards and being managed by CubeSmart which will make it attractive to REIT buyers on sale in order to maximize sales price."

 

How has COVID-19 impacted your business plan?

Mark Campbell, Southwestern Property Corp.: "COVID - 19 has impacted the business plan in positive ways, as it has created a population that is moving more than in the past. As a result storage is more in demand. Further, Self-storage was the best performing asset class during the Great Recession. As a result of this performance history the asset class has become more desirable. Additionally, as investment shifts from Office and Retail projects which are no longer desirable the demand for Self-Storage ownership has increased likely resulting in higher than historical sales prices in the future. Recent reductions in interest rates as a result of COVID -19 have also helped this project by decreasing the cost of construction debt."

 

What are the risks and how are you mitigating those risks?

Mark Campbell, Southwestern Property Corp.: "The largest risks associated with a development of this nature are during the entitlement and construction phases of the project. Southwestern Property Corp is reducing this risk through an adaptive reuse of a current existing building."

"Stabilization risk also exists to some degree and that is mitigated by hiring CubeSmart as a third party manager. Using a national manager like CubeSmart strongly impacts the ability to use brand recognition to lease up the facility rapidly."

 

NOTE: All answers provided by the sponsor, Southwestern Property Corp., or its representatives.

Offered By

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Assets Under
Management

Currently
$252.96MM 30+ assets
Exited
$543.08MM 50+ assets
Portfolio LTV
43%  
Historical
Realized Returns

Total IRR
42%  
Equity Multiple
2.78x  
Annual Cash
7.6%  
Years Of
Experience

As Principals
25+ years  
In Business
26 years  
Size
12 Staff  
* All information is reported by Southwestern Property Corp. as of 10/21/2020.
Assets Under
Management

Currently
$252.96MM 30+ assets
Exited
$543.08MM 50+ assets
Portfolio LTV
43%  
Historical
Returns

Total IRR
42%  
Equity Multiple
2.78x  
Annual Cash
7.6%  
Years Of
Experience

As Principals
25+ years  
In Business
26 years  
Size
12 Staff  
* All information is reported by Southwestern Property Corp. as of 10/21/2020.

Financials

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Offering Financial

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Location Details

Des Moines, IA

Mark Campbell, Southwestern Property Corp.: "The subject property is located at 2590 Hubbell Ave in Des Moines, Iowa. There is an existing retail building on site (formerly a Gordmans retail store) that was built in 1971 and is 91,000 square feet. The property is neighbored by single-family homes and retail stores common in a strip mall."

"Access to the property is made primarily via Hubbell Ave from the North and the South. Interstate 235 is approximately 0.5 miles west of the subject site while Interstate 80 is approximately 3 miles north. The site is approximately 3.5 miles from downtown Des Moines and 1.5 miles from the Iowa state fairgrounds."

"The property is located close to residential communities and commercial activities. This has been a long-standing neighborhood shopping destination with great traffic drivers in the adjacent East Point Plaza which features Octa Pharma Plasma, MetroPCS, Dollar General, H&R Block, Check Into Cash, and Pizza Hut."

Documents

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Offering Agreement Documents

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