Murphy Business Center Shallow Bay | Hanson Capital

Murphy Business Center

12999-13003 Murphy Rd, Stafford TX 77477

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Opportunity Summary

The Murphy Business Center is a 343,200 SF industrial park spanning 28 buildings across 21.1 acres in Stafford, TX—one of Houston’s fastest-growing submarkets, with 16% population growth over the past decade. The property features 114 bays ranging from 1,200 SF to 18,500 SF, with an average bay size of 3,010 SF. This format caters to the strongest-performing tenant segment in the Houston market: small to mid-sized businesses that need flexibility to expand within the park. The broad range of bay sizes creates both diversity and durability of tenancy, positioning Murphy as a premier destination for long-term occupancy.

 

This acquisition aligns perfectly with our strategy of acquiring multi-tenant industrial business parks at a basis well below replacement cost, with in-place rents that trail market levels. Murphy offers a rare combination of an infill location, an attractive acquisition yield of 6.62% providing immediate day-one cash flow, and clear levers for near-term value creation. We see a direct path to increasing NOI 42% from month 1 to the end of year 2 from combined revenue increases through execution of lease up and marking in place leases to market. By pairing stable in-place income with meaningful upside potential, Murphy strikes the ideal balance between cash flow and forced appreciation—making it a compelling and strategic investment.

Minimum Investment $50,000

Key Information

  • Purchase Price: $34.66 Million
  • TI/Leasing Budget: $1.90 Million
  • Equity Required: $17.12 Million
  • Close of Raise: 10/31/25
  • Zoning: Commercial (NEC)
  • Stabilized Cash on Cash - Institutional Class 9.66%
  • Stabilized Cash on Cash - Investor Class 7.24%
  • IRR: 20.07%
  • Equity Multiple: 1.42
  • Purchase Yield | Stabilized Yield: 6.62 | 8.33
  • Estimated Loan Term: 5 Years
  • Fixed | Variable Rate: Fixed
  • LTC: 60.00%
  • Estimated Loan Rate: 6.5%
  • Estimated Hold Period: 2 Years
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Property Details

  • Building Size: 343,200 SF Across 28 Buildings
  • Lot Size: 21.1 Acres
  • Zoning: Commercial (NEC)
  • Market: Houston (Stafford), TX
  • Freeway Access: Beltway 8, Highway 59, Highway 90
  • Year Built: 1984-1985
  • Construction Type: Steel

Business Plan

Murphy Business Center

12999-13003 Murphy Rd, Stafford TX 77477

The Murphy Business Center benefits from nearly $2M of recent capital improvements, including $1.3M in City of Stafford–mandated fire life safety upgrades, along with new HVAC systems, façade enhancements, and roll-up door replacements. These costly upgrades, already absorbed by the prior owner, significantly reduce near-term capital needs and position the property for durable cash flow.

The primary value creation comes from leasing the 16% current vacancy through targeted interior make-ready work — refreshing offices with new paint and flooring, upgrading warehouse lighting, and applying fresh interior paint. These improvements, currently absent, are critical to driving occupancy and rental rates in this bay size segment. Combined revenue increases through execution of lease up and marking in place leases to market, we project NOI to grow from $191,205 in month 1 to $275,213 by the end of year 2 — a 42% increase. This translates into a stabilized return on cost of 8.33% at the end of year 2 and 9.07% in year 5.

Adding further upside, the park is divided into two separate parcels, providing flexibility for a multi-sale exit if smaller dispositions prove more accretive. This optionality enhances both liquidity and potential exit value.

By pairing strong cash flow with meaningful NOI growth and capital appreciation, Murphy delivers returns competitive with debt investments — but with the added upside of long-term equity value creation.

 

Market Analysis

Shallow Bay Industrial Outperforming Class A Industrial

Per JLL, Houston’s small- to mid-size industrial inventory is outperforming the broader market, with vacancy rates in the 3–5% range versus 7%+ for larger product and sustained rental growth in the sub-50k SF segment. While large tenant leases often move the headlines, over 75% of deals signed this year (by count) were for spaces under 100,000 SF — reflecting the consistent depth of demand from smaller users. With an average bay size of just 3,010 SF, the Murphy Business Center is uniquely positioned to capture this tenant demand. Coupled with limited new supply of comparable product in Stafford/Fort Bend and strong absorption trends, Murphy is poised to outperform the market at large.

Location

Murphy Business Center

12999-13003 Murphy Rd, Stafford, TX 77477

Why Murphy Business Center Makes Sense

  • Strong day-one yield: 6.62% in-place cash flow with immediate stability.
  • Clear upside: vacancy lease-up and mark-to-market.
  • Below replacement cost: $101/SF vs. trades at $125–$150/SF.
  • High-demand product: 3,010 SF average bays align with Houston’s strongest tenant segment.
  • Flexibility at exit: Two-parcel structure allows multi-sale optionality.

Returns Overview

Underwriting Assumptions

  • Replacement Rental Rate: $0.84/SF NNN
  • Vacancy Timing Upon Lease Expiration: 9 months
  • Exit Cap Rate: 6.75
  • Sale Price: $141/SF
  • Deal Time Horizon: 2 Year

Partnership Structure

Distributions and Fees

  • Monthly distributions of operating profits
  • 1.5-2.0% acquisition fee
  • 1% asset management fee on Equity Raised
  • 1% disposition fee

Institutional Class

  • Preferred Return of 8% on all cash flow until 8% annualized return is realized.
  • 100% of distributions following the satisfaction of the 8% preferred return will be paid to the General Partner as a “Catch Up” until the General Partner has received an amount equal 2.67% of the aggregate distributions
  • Equity partner with 75/25 split of profits beyond satisfying the 8% Preferred Return and General Partner Catch Up. General Partner will receive a 25% carried interest in the net profits, with the remaining 75% of net profits to be distributed to the Limited Partners
  • Waterfall structure as follows:
  • Investor Preferred Return – 8%
  • General Partner Catch up – 2.67%
  • Pre 13% IRR Hurdle Investor/General Partner Distribution Ratio – 75/25 split
  • Post 13% IRR hurdle Investor/General Partner Distribution Ratio – 65/35 split

Investor Class

  • Equity partner with 75/25 split of profits. General Partner will receive a 25% carried interest in the net profits, with the remaining 75% of net profits to be distributed to the Limited Partners
  • Waterfall structure as follows:
  • Pre 13% IRR Hurdle Investor/General Partner Distribution Ratio – 75/25 split
  • Post 13% IRR hurdle Investor/General Partner Distribution Ratio – 65/35 split

Company Overview

Murphy Business Center

12999-13003 Murphy Rd, Stafford, TX 77477

At Hanson Capital Group, experience is not just a metric—it’s our foundation. Boasting over 100 years of combined expertise in real estate, we’ve cultivated a reputation for excellence and strategic insight in the market. Our formidable investments, nearing $300,000,000 under management, are a testament to our sustained success. Driving our vision forward is a harmonized team of executives and directors. CEO Chris Hanson, COO Zach Price, Managing Director of Acquisitions Chris Pike, and Managing Director of Asset Management Jim Tainter lead the charge. Together, they craft the trajectory for Hanson Capital Group, ensuring we remain at the forefront of the real estate industry.

Established in 2008, Hanson Capital Group embarked on its mission to become a trusted auction bidding service provider and create a lasting enterprise focused on creating wealth for ourselves and our partners. Aligning with prominent institutions, our dedication and energy quickly became evident, resulting in the acquisition of over 1,500 single-family homes out of foreclosure within an impressive six-year span. However, our sights were set higher. Identifying a unique opportunity to elevate our bidding pursuits, Hanson Capital, LLC was established in 2010 as a state-licensed mortgage bank. Today, Hanson Capital thrives as a leading hard money and bridge debt lender, and, to date, has overseen transactions exceeding $500 million, while consistently maintaining an equity portfolio averaging $40 million.

While our initial investments were rooted in real estate backed lending, in 2010 we began our pursuit of direct investment in value-add multifamily assets. After nearly a decade of that value-add multifamily strategy, and after buying and selling a few thousand apartment doors, our focus shifted in 2018 towards industrial real estate, which continues to be the focus today.

We are now deeply entrenched in industrial real estate within the so-called “Sun Belt”, with a notable presence in strategic areas like California, Arizona, and Texas. The result of this commitment is over $250,000,000 in industrial real estate and over 1.4 million square feet of current assets under management.

Our process is invaluable to our success. All investment decisions are made by our investment committee in accordance with our Investment Policy Statement (IPS). Strategically crafted, the IPS emphasizes our central mission: capitalizing on inefficiencies in real estate to provide sustainable returns through proven and disciplined investment and management strategies. Every facet of the IPS has been intricately designed to demystify our methodologies, underscoring our commitment to transparency, accountability, and the responsible management of entrusted capital. The IPS also guides us in making informed, consistent decisions, helping to mitigate risks, and optimize returns, while ensuring that our actions align with our long-term investment objectives.

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Chris Hanson

Founder

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