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INVESTMENT HIGHLIGHTS
State Government Lease As a state agency under the State of the Government of Texas, the debts and obligations incurred by the Tenant are backed by the State of Texas.
Likelihood of Renewal The State of Texas has a market-leading retention rate of its leases, generally is a long-term tenant and has been at this location for nearly 25 years. The Property has also undergone recent renovations for the Tenant of over $250k.
Strong Credit The State of Texas carries an investment-grade credit rating by all major rating agencies including an AAA rating with a stable outlook from Standard & Poor’s Rating Services and its All Funds revenues exceeded $183.34BN for 2022, a 7.5% increase from 2021.
Mission-Critical Operation The Property serves as one of 819 locations statewide for 37 state agencies in 283 Texas cities and towns. The Texas Facilities Commission leasing portfolio is comprised of approximately 10.2MM square feet with a monetary value of approximately $158MM.
Recent Major Renovation Over $250k interior remodel done in 2021 with all new flooring, fresh paint, and upgraded countertops installed, bringing the interior of the space up to new specifications.
Considerable Upside Offered at just $73.23 PSF, which is well below replacement cost, especially considering extensive recent remodeling/renovations. Another point to consider is the Tenant is currently only paying $9.39 PSF in rent, which is below market. Also, annual CPI rent increases are allowable per terms of the lease, providing new ownership a path to increased rent collection.
