Property Details
Stabilized Occupancy  Stabilized Income  Stabilized Cashflow  NOI Growth 
Asset Profile
Value Add

Stabilized Self-Storage - Eden, NC

Eden, NC

Self-Storage Property
5050 Storage Partners Charlotte, NC
5050 Storage Partners
  • IRR 15.72%
  • Equity Multiple 2.43x
  • Hold Period 7Y
  • Minimum Investment $25K
  • Year 1 Cash on Cash 7.5%
  • Stabilized Cash on Cash 9.6% in Y2
  • First Distribution Dec 2020
  • Distribution Frequency Quarterly
  • Co-Investment 10%
  • Preferred Return 10%
  • Investor Profit Share 70%
  • Asset Profile Value Add
  • Loan-to-Value 66%
  • Current Occupancy 100%

About this Property

"Value-add self-storage facility that is 100% occupied with stable cash flows. The average tenant stay exceeds industry standards by 24 months. Mom & pop managed, below replacement cost, and the ability to drive results by implementing technology."

- D. Brent Wright Jr., 5050 Storage Partners

 

Address 323 W. Stadium Dr.
Square Footage 58,418 sq. ft.
# of Units 553
Year Built 1986
Year Renovated 2018
Current Occupancy 100%
Market Occupancy 95+%
Current Average Rents $7.09
Average Market Rents $7.10
Purchase Price $3,950,000
Price/Sq. Ft. $67.62/Sq. Ft.
Stabilized Loan to Value 53%

Top Questions

All answers are provided by the sponsor, 5050 Storage Partners, or its representatives.

 

Why are you buying these properties?

D. Brent Wright Jr., 5050 Storage Partners:

  1. "Stabilized cash flows."
  2. "100% occupied. There is approximately $50,000+ in pent up value on the rate side that can be gained in year 1."
  3. "Smaller markets tend to have less new competition."
  4. "Mom & Pop Managed."
  5. "No ancillary income products currently being sold ie: Locks, Boxes, Insurance, etc.."
  6. "Best curb appeal asset in the market."
  7. "Below replacement cost."

 

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

D. Brent Wright Jr., 5050 Storage Partners:

  1. "Mom & Pop managed: Currently the facility is managed by an individual who has not been trained properly in running a self-storage facility. There is limited follow up on late fees they are not enforced. A facility of this size should be generating at least $12,000+ a year in late fee income. By enforcing late fees the value created in year one exceeds $185,000."
  2. "Cost basis: The facility is under contract at $58.09 p.s.f. on the gross building area which includes land. The acquisition is below replacement cost."
  3. "Rent Rate increases: Self-storage occupancy levels should be around 92% occupied. The reason for this occupancy level is that it provides the manager with the ability to rent a unit at a higher price point than the previously rented unit. Since the store is 100% occupied that ability is taken away. A 14% rent increase is shown on existing customers in year 1. In terms of percentage, this sounds like a lot. In terms of dollars, it is closer to $8.00 extra per month. The facility needs individuals to move out in order to achieve the desired occupancy level. The proposed increase will add $58,000 to the top line in year 1 creating significant value for the investor."
  4. "Stabilized: Self-storage is “sticky”. Once a customer rents a unit they tend to stay longer than anticipated. Storage customers are also not going to move because a newer store opened down the road. Storage customers also tend to stay through rental rate increases and not move into a cheaper option if available. The price increase or newer building from the competitor has to be drastic because no one wants to spend their Saturday renting a U-Haul and moving all their belongings."

 

What is your investment strategy/business plan?

D. Brent Wright Jr., 5050 Storage Partners: "The investment strategy is focused on three parts:"

  1. "Increase rents on existing customers in order to drive higher cash flow but to also reduce the current occupancy level to 92%."
  2. "Implement a kiosk and website that currently allows for contactless and 24 hr. rentals. This will also drive down personal cost."
  3. "Drive ancillary products (insurance, locks, boxes, etc. Find other properties in a 75 mile that fits the investment strategy to create a portfolio. To date 5050 Storage Partners has four other assets under contract in the 75 mile radius. A portfolio sale would be attractive and expand the buyer pool once it is time to sell. By implementing the top three initiatives the total value creation is expected to be over $1.0mm by year 3."

 

How has COVID-19 impacted your business plan?

D. Brent Wright Jr., 5050 Storage Partners: "COVID-19 has had little to no impact on this location and the self-storage business as a whole. The PSA was exercised during the height of COVID-19 and occupancy has increased since first going under contract. The biggest risk to COVID-19 is if the State of North Carolina is under a state of emergency. During a state of emergency, our business incurs restrictions on rental rate increases and the ability to evict tenants in a timely manner. The biggest positive during COVD-19 is that storage has been deemed as an essential business. There have only been a few cases in select cities where storage could not operate as usual."

 

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

D. Brent Wright Jr., 5050 Storage Partners:

  1. "Currently, 100% of the deposits come in the form of cash or check. Moving customers to ACH and or credit cards will be a top priority to reduce fraud. A typical storage facility will have around 80% of payments through credit card or ACH. The current owners have not provided the software to receive credit card payments which is why the payments are low. However, the first couple of months of operations will require additional accounting backstops to ensure all payments are being received."
  2. "New development: Mitigation risk on new development can be difficult. The best mitigation is quality real estate."
  3. "A second wave of COVID-19: Pricing increases & tenant eviction will be placed on pause if the state of North Carolina goes back into a state of emergency. Cleaning up delinquent accounts and increasing pricing is going to be very important with in the first 90 days. "
  4. "Real estate & Debt markets: The 7 year term with no pre-pay or disposition fees with a fixed rate of 4.55% allows for greater flexibility on choosing the best time to exercise a sale at the best price."

 

NOTE: All answers provided by the sponsor, 5050 Storage Partners, or its representatives.

About this Property

"Value-add self-storage facility that is 100% occupied with stable cash flows. The average tenant stay exceeds industry standards by 24 months. Mom & pop managed, below replacement cost, and the ability to drive results by implementing technology."

- D. Brent Wright Jr., 5050 Storage Partners

 

Address 323 W. Stadium Dr.
Square Footage 58,418 sq. ft.
# of Units 553
Year Built 1986
Year Renovated 2018
Current Occupancy 100%
Market Occupancy 95+%
Current Average Rents $7.09
Average Market Rents $7.10
Purchase Price $3,950,000
Price/Sq. Ft. $67.62/Sq. Ft.
Stabilized Loan to Value 53%

Top Questions

All answers are provided by the sponsor, 5050 Storage Partners, or its representatives.

 

Why are you buying these properties?

D. Brent Wright Jr., 5050 Storage Partners:

  1. "Stabilized cash flows."
  2. "100% occupied. There is approximately $50,000+ in pent up value on the rate side that can be gained in year 1."
  3. "Smaller markets tend to have less new competition."
  4. "Mom & Pop Managed."
  5. "No ancillary income products currently being sold ie: Locks, Boxes, Insurance, etc.."
  6. "Best curb appeal asset in the market."
  7. "Below replacement cost."

 

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

D. Brent Wright Jr., 5050 Storage Partners:

  1. "Mom & Pop managed: Currently the facility is managed by an individual who has not been trained properly in running a self-storage facility. There is limited follow up on late fees they are not enforced. A facility of this size should be generating at least $12,000+ a year in late fee income. By enforcing late fees the value created in year one exceeds $185,000."
  2. "Cost basis: The facility is under contract at $58.09 p.s.f. on the gross building area which includes land. The acquisition is below replacement cost."
  3. "Rent Rate increases: Self-storage occupancy levels should be around 92% occupied. The reason for this occupancy level is that it provides the manager with the ability to rent a unit at a higher price point than the previously rented unit. Since the store is 100% occupied that ability is taken away. A 14% rent increase is shown on existing customers in year 1. In terms of percentage, this sounds like a lot. In terms of dollars, it is closer to $8.00 extra per month. The facility needs individuals to move out in order to achieve the desired occupancy level. The proposed increase will add $58,000 to the top line in year 1 creating significant value for the investor."
  4. "Stabilized: Self-storage is “sticky”. Once a customer rents a unit they tend to stay longer than anticipated. Storage customers are also not going to move because a newer store opened down the road. Storage customers also tend to stay through rental rate increases and not move into a cheaper option if available. The price increase or newer building from the competitor has to be drastic because no one wants to spend their Saturday renting a U-Haul and moving all their belongings."

 

What is your investment strategy/business plan?

D. Brent Wright Jr., 5050 Storage Partners: "The investment strategy is focused on three parts:"

  1. "Increase rents on existing customers in order to drive higher cash flow but to also reduce the current occupancy level to 92%."
  2. "Implement a kiosk and website that currently allows for contactless and 24 hr. rentals. This will also drive down personal cost."
  3. "Drive ancillary products (insurance, locks, boxes, etc. Find other properties in a 75 mile that fits the investment strategy to create a portfolio. To date 5050 Storage Partners has four other assets under contract in the 75 mile radius. A portfolio sale would be attractive and expand the buyer pool once it is time to sell. By implementing the top three initiatives the total value creation is expected to be over $1.0mm by year 3."

 

How has COVID-19 impacted your business plan?

D. Brent Wright Jr., 5050 Storage Partners: "COVID-19 has had little to no impact on this location and the self-storage business as a whole. The PSA was exercised during the height of COVID-19 and occupancy has increased since first going under contract. The biggest risk to COVID-19 is if the State of North Carolina is under a state of emergency. During a state of emergency, our business incurs restrictions on rental rate increases and the ability to evict tenants in a timely manner. The biggest positive during COVD-19 is that storage has been deemed as an essential business. There have only been a few cases in select cities where storage could not operate as usual."

 

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

D. Brent Wright Jr., 5050 Storage Partners:

  1. "Currently, 100% of the deposits come in the form of cash or check. Moving customers to ACH and or credit cards will be a top priority to reduce fraud. A typical storage facility will have around 80% of payments through credit card or ACH. The current owners have not provided the software to receive credit card payments which is why the payments are low. However, the first couple of months of operations will require additional accounting backstops to ensure all payments are being received."
  2. "New development: Mitigation risk on new development can be difficult. The best mitigation is quality real estate."
  3. "A second wave of COVID-19: Pricing increases & tenant eviction will be placed on pause if the state of North Carolina goes back into a state of emergency. Cleaning up delinquent accounts and increasing pricing is going to be very important with in the first 90 days. "
  4. "Real estate & Debt markets: The 7 year term with no pre-pay or disposition fees with a fixed rate of 4.55% allows for greater flexibility on choosing the best time to exercise a sale at the best price."

 

NOTE: All answers provided by the sponsor, 5050 Storage Partners, or its representatives.

Offered By

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Assets Under
Management

Currently
$0 No assets reported
Exited
$69.5MM less than 10 assets
Portfolio LTV
71%  
Historical
Realized Returns

Total IRR
30.6%  
Equity Multiple
2.59x  
Annual Cash
N/R  
Years Of
Experience

As Principals
10+ years  
In Business
2 years  
Size
2 Staff  
* All information is reported by 5050 Storage Partners as of 8/24/2020.
Assets Under
Management

Currently
$0 No assets reported
Exited
$69.5MM less than 10 assets
Portfolio LTV
71%  
Historical
Returns

Total IRR
30.6%  
Equity Multiple
2.59x  
Annual Cash
N/R  
Years Of
Experience

As Principals
10+ years  
In Business
2 years  
Size
2 Staff  
* All information is reported by 5050 Storage Partners as of 8/24/2020.

Financials

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Offering Financial

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Location Details

Eden, NC

D. Brent Wright Jr., 5050 Storage Partners: "The property has excellent curb appeal with above average traffic counts. With over 11,000 vehicles per day, the facility is able to achieve excellent visibility to potential renters. Eden is part of the Greensboro, NC MSA which is the 3rd most populous city in North Carolina and 68 “most” populous city in the United States. Eden has 25,043 people within 5 miles of downtown. New self-storage development has been limited over the years. The city has a growing average household income averaging 3.9% increase year over year. As incomes grow consumers tend to purchase more which increases the need for storage."

Documents

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Offering Agreement Documents

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