301 Montgomery Street is an industrial property for lease in Shreveport, LA.
McCarty Equipment Co. is a 20,560 SF, net leased industrial facility located in Shreveport, LA within the Agurs industrial submarket. This offering also includes an adjacent lot, which could accommodate any future expansion needs. McCarty recently consolidated two Shreveport locations into this facility, which specializes in providing wholesale products to oilfield and industrial supply stores.
Headquartered in Abilene, TX, McCarty Equipment Co. is one of five subsidiaries of The United Distribution Group, Inc., which has 85 locations throughout North America, 2,100 manufacturing partners and 140,000 line items (udginc.com). McCarty operates 24 showroom and supply warehouse locations across the US and Canada, with the balance of UDG’s footprint operating as one of the other four subsidiaries (United Central Industrial Supply, GHX, National Mine Service & Gooding Rubber).
The opportunity is to acquire a below market leased industrial asset within Shreveport's oldest and most stable industrial submarket. In addition, the property is leased to a strong and stable private company that has been in business since 1976. Although McCarty entered the Louisiana market through acquisition, the Agurs facility has been in continuous operation since the early 1990s. By closing, McCarty will have exercised the first of two, 5-year renewal options, which escalate 2.0% annually, bringing the total years of continuous operation at the facility to almost 30.
The current average lease rates in Agurs range between $5.25/SF and $6.00/SF Modified Gross. At the conclusion of the first option in 2021, the ending lease rate will be $3.03/SF NNN, which equates to roughly a $4.20/SF Modified Gross lease rate. This rate is $1.05 to $1.80 less than current average rates in Agurs. Although the assumption is that McCarty will exercise the second, 5-year option due to length of occupancy at this location, the current average lease rates in Agurs indicate that there is considerable upside upon expiration of McCarty's first or second option period.