Virtus Announces the Sale of its Store Space Storage Portfolio in the Houston, TX MSA
Virtus Real Estate Capital II ("VREC II") is pleased to announce its most recent property realization. The Store Space Storage Portfolio is comprised of two Class-A self-storage properties located in fast-growing submarkets in the Houston - The Woodlands - Sugar Land, TX MSA. Totaling 210,753 sq. ft., the portfolio is comprised of Store Space Sugar Land ("Sugar Land") and Store Space Humble ("Humble"). Houston, the fourth largest MSA in the U.S., is a Virtus targeted market due to its strong employer base and population growth.
This transaction and successful outcome reflect Virtus' investment thesis to:
Acquire properties in off market transactions - Sugar Land was acquired from a local developer after delivery of the project, and Humble was purchased from an independent operator shortly after delivery of an expansion project, thus requiring a heavy focus on lease-up activity;
Partner with and utilize Store Space's digital marketing strategy and operations team to lease up the properties to a stabilized occupancy of 89% over 36 months;
Capitalize on strong market conditions which provided an opportunity to add the two assets to a larger portfolio sale made up of other Store Space properties, leading to an earlier sale than originally underwritten; and
Benefit from a portfolio premium to exceed underwriting and generate a preliminary gross 32.6% IRR / 2.4x ROI, ultimately yielding higher than expected returns to investors in a shorter time frame.