Under Contract $4,830,000 Asking Price - Featured, Multi-Tenant
The Stone Gate Shopping Center is located at the northeast corner of the signalized intersection of Barker Cypress Road and Queenston Boulevard, the main entry to the 1,800-acre Stone Gate Master Planned Community. It is in the northwest quadrant of the Houston, Texas MSA in an area known as Cypress, which has enjoyed a population growth of 25 percent from 2010-2016 and now has approximately 160,000 people. The offering consists of a 21,165 square foot retail property built in 2004. Barker Cypress Road is one of the most prominent North/South thoroughfares in West and Northwest Houston. It runs fifteen miles from Interstate 10 West in Katy past Highway 290 in Cypress. It connects many residential and commercial developments. Included in those are the numerous active subdivisions in the immediate area of Stone Gate which include Stone Gate: 1,800 acres – 1,834 homes, Alder Trails: 155 acres, Riata Ranch: 1,027 homes, Riata West: 295 homes, Canyon Lakes: 500 homes, and Barker Lake: 305 homes.
As a result of population growth here, area demographics are an impressive 7,211 people in a one mile radius and 78,954 people in a three mile radius with average household incomes of $109,355 and $118,834 respectively. The Lone Star College, the fastest growing Community College system (95,000 students) in Texas, has a student campus with 21,636 students enrolled in the midst of the local subdivisions on Barker Cypress. Queenston is a north/south, seven mile thoroughfare that turns west into the Stone Gate community to intersect with Barker Cypress. It originates at Clay Road in West Houston. Directly across Barker Cypress from Stone Gate Shopping Center is a Walgreens which is on the northwest corner with Queenston next to a Jack in the Box. On the southeast corner there is a Shell Station/Burger King combination with several retail tenants. Other existing shopping centers are nearby and four new centers are being constructed. Freestanding buildings on Barker Cypress include GoodYear Tire, Chevron, Exxon, and Discount Tire, as well as a Walmart neighborhood grocery store. There is also a Children’s Academy next to Stone Gate on Queenston and a Sherwin Williams adjacent to it on Barker Cypress. On the north side of Highway 290 there is an extensive retail cluster that includes two grocery anchored centers one with H-E-B which is part of a 157,407 square foot shopping center and the other Randalls with LA Fitness in a 133,077 square foot center.
Stone Gate Shopping Center consists of an L-shaped retail building with multiple access points from Barker Cypress Road and Queenston Boulevard. It benefits from being at a signalized intersection where high traffic Barker Cypress has twenty-four-hour traffic counts of over 45,000 cars per day. The property has 21,165 square feet of which all of the nine tenant spaces are leased except for a 1,200 square foot end cap on Barker Cypress which was formerly an AT&T cell phone store that relocated to a larger footprint. Three tenants, the Nail Shop, Cleaners, and Lori Logan DDS, who is currently expanding her space by 50 percent, have been in the center since 2005. They account for 7,465 square feet or 35 percent of the property. The remaining tenants lease commencements range from 2008-2016. No lease expires before the end of 2019 except for the Kolache/Donut store which goes through the end of this year. All leases are NNN with tenant expense reimbursement pass throughs for management at 5 percent. Most of them also include a 15 percent administrative fee. Tenants are service oriented and have businesses that are neighborhood in nature. The largest one is Martial Arts USA which has a professional staff of instructors from Korea teaching Tae Kwon Do. It is a well run business that is involved with the community.
Built in 2004, Stone Gate Shopping Center was constructed using stucco with stone accents on the exterior and anodized aluminum store fronts with tinted glass. It has very good curb appeal and features concrete drives/parking lot as well as a wide service drive that runs the whole property accessing both major streets. Bay depths are mainly sixty feet, though a couple of them have parts of their space that exceed that. It has a brick monument pylon sign on Barker Cypress which enhances tenant identification. On the corner of Barker Cypress and Queenston in front of the property is an ornate Stone Gate subdivision two sided stone engraved marker beautifully landscaped with shrubs and flowers. The property shares the parking lot with a brick building that houses a medical lab that is not a part of this offering.
Stone Gate Shopping Center has several distinct advantages over alternative shopping center investments in the Houston area. It is not only in the high growth Cypress market but at one of its most major corners which is south of Highway 290 being at Queenston and Barker Cypress. It also has a rental structure far below newer construction centers leasing for over thirty dollars per square foot NNN. Stone Gate rents are mainly in the upper teens to lower twenties per square foot NNN. There is room to increase rents here as well as lease up the vacancy. An investor can look forward to owning a stable property with potential appreciation with Stone Gate Shopping Center.
- CAP Rate: 8.08%