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Facilitating Financing for Class-A Self-Storage Facility


Carrollton, TX

The RRA Capital team facilitated financing for a Class-A self-storage facility located in Carrollton, Texas. The property has undergone a remarkable transformation from a grocery store into a modern self-storage facility.

Originally a Kroger grocery store, the property underwent extensive renovations in 2017 to transform it into a CubeSmart branded self-storage facility. Following the successful renovation, the facility officially opened its doors to tenants in March 2018. This transformation exemplifies the potential of adaptive reuse in commercial investment properties, showcasing how repurposing properties can lead to lucrative ventures.

Situated just 20 miles north of downtown Dallas, the facility is a Class-A self-storage facility comprising a total of 881 units. Its strategic location provides convenient access for customers, positioning it as an ideal storage solution in the region. Notably, the facility features two floors of fully climate-controlled spaces, ensuring the utmost protection for customers' stored belongings.

RRA Capital played a pivotal role in the project by providing a 2-year loan with a 75% loan-to-value (LTV) ratio. The loan's structure also included a dedicated holdback facility to finance essential capital improvements, supporting the ongoing enhancement and progress of the property throughout the lease-up phase. Furthermore, the loan served the dual purpose of refinancing existing construction debt and allocating funds for necessary roof repairs.

At the time of closing, the facility had achieved an occupancy rate of 49%. However, CubeSmart, a leading self-storage provider with a vast portfolio of over 1,200 facilities across 37 states, projected a stabilized occupancy rate of 90% by month 20 of the loan term. This robust forecast underscores the strong market demand for quality self-storage units in the area.

The property's location in Carrollton positions it favorably for capturing the self-storage demand in the region. Within a 3-mile radius of the facility, 53% of residents live in renter-occupied housing, presenting a substantial customer base. Furthermore, the area's population is projected to grow by approximately 15% over the next five years, indicating a promising market for self-storage services.

This transformation highlights the investment opportunities and adaptive reuse potential of commercial properties. RRA Capital's comprehensive financing package, including the loan and holdback facility, provided vital support for capital improvements and the facility's lease-up progression.

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