±7,680 SF Industrial Building | 5-Year Sale Leaseback Investment Opportunity
2226 124th T Ave
Watford City, ND 58854
Highlights
- •7,680 SF on 3 Acres
- •Good Property Condition
- •Ample Yard Space
- •5-year term with 3% annual escalations
- •10.25% Cap rate
- •$106,272.00 NOI
- •Stable and reliable tenant
- •Newer Industrial Area of Watford City
- The Bakken region represents a premier industrial investment opportunity, distinguished by its robust and dependable oil and gas sector. In 2023, North Dakota achieved a remarkable production level of 1.3 million barrels per day, reflecting the region’s sustained output and operational excellence. This performance is underpinned by consistent drilling activity and significant infrastructure advancements, ensuring long-term reliability and growth.
Description
NRG Realty Group is pleased to have been retained exclusively to market 2226 124th T Ave, Watford City, ND, along with its future associated lease via sale-leaseback and eventual tenant, Q2 Artificial Lift Systems, LLC (the "Property"). Q2 Artificial Lift Systems was founded in 2016 and specializes in the sales, service, engineering, and manufacturing of downhole reciprocating pumps. They operate over 40 repair and service locations across Western Canada and the United States, with a state-of-the-art 118,000 sq. ft. manufacturing facility in Red Deer, Alberta where its headquarters are located. Q2 Artificial Lift Services is backed by Pelican Energy Partners, a private equity firm specializing in energy investments.
This acquisition includes the subject property totaling 7,680 square feet and situated on 3 acres of land. The Property is located on the south side of Watford City in a newer industrial development situated approximately 1.25 miles east of US Hwy 85.
This investment presents a compelling opportunity to acquire an industrial property occupied by Q2 Lift Systems through a sale-leaseback transaction, ensuring long-term stability with a well-established tenant. The lease structure offers strong financial returns, beginning with a double-digit cap rate of 10.25% and averaging 10.87% throughout the primary term. The key highlights include a low-basis investment with high yield potential, providing significant upside. Secondly, it'd be a 60-month primary lease term with 3% annual rent escalations, ensuring consistent income growth. Additionally, there are two (2) 36-month renewal options, offering long-term tenancy security. Lastly, it's an industrial asset backed by a strong operating business, reducing investment risk.
In conclusion, with a favorable entry price and stable cash flow, this asset delivers an attractive risk-adjusted return for investors seeking high-yield real estate opportunities with built-in growth potential.
Watford City
