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33728572
33728559

O Business Highway 83, Mercedes, TX 77850

$12,000,000
2 days on market
Updated 1 day ago

ROYAL PALMS

Details
Property Type Land, Mobile Home Park
Sub Type Commercial, Mobile Home Park
Units 400
Cap Rate 8.00%
NOI $2,052,000
Pro-Forma Cap Rate 8.00%
Pro-Forma NOI $2,052,000
Class A
Acreage 60.000
Zoning Entitled 60 acre mobile home community
Investment Type Institutional

Land | 60 acres

Marketing description

Fully entitled Royal Palms in Mercedes, Texas sits at the strategic center of a high-growth "squeeze" between the McAllen/Pharr metro to the west and the Harlingen/Brownsville metro to the east. As these primary hubs expand toward one another, Mercedes has emerged as the premier workforce-housing corridor in the Mid-Valley. The region is currently experiencing a 247% spike in industrial warehouse construction, driven by the global manufacturing shift toward Northern Mexico. This logistics explosion has created a permanent need for a blue-collar tenant base with a 30- to 40-year demand horizon, further stabilized by a regional median age nearly seven years younger than the national average.

The region is supported by a robust network of Big Box retailers and expanding distribution hubs, including major brands such as Walmart, H-E-B, and Costco, with IKEA slated to enter the Pharr market in 2025. This retail density is bolstered by a surging logistics presence, highlighted by Amazon's 62,000 sq ft delivery hub and new footprints from Barnes & Noble and Ross. Providing the economic foundation for this growth is a diverse pool of major regional employers across the public and private sectors. Key anchors include the University of Texas – Rio Grande Valley, Driscoll Children's Hospital, and various school districts, as well as a massive logistics and supply chain workforce driven by FedEx and regional warehousing operations.

At 400 lots, Mercedes Palms offers the institutional scale that provides significant operational efficiencies and high-margin management potential, both of which are rarely found in fragmented mobile home park markets. Our vision is to transform these 60 acres into Mercedes Palms Community, a premier 400-lot manufactured housing community, located along the primary corridor of the Rio Grande Valley. Mercedes Palms will redefine the traditional mobile home park by setting a new standard for affordable housing.

Investment highlights

  • 400 Space MHP Land Development JV Deal
  • Initial Investment: $2,000,000 Total Investment: $12,000,000
  • Cash Flow Return after Stabilization: $1,200,000
  • Projected Annualized Return: $2,635,500 (21%)
  • Total Return: $12,550,000
  • Investment secured by first trust deed on the property
  • 50% stake in the project under a highly lucrative, multi-tiered return structure optimized for a 5- to 7-year investment horizon
  • Once completed, it will generate $2,400,000 in annual income
  • Net profit from mobile home sales projected to generate an additional $12,000,000 in revenue
  • Total project valuation expected to exceed $25,000,000 by the end of the five-year exit strategy
  • 247% spike in industrial warehouse construction in the region
  • Market inventory tight at 5.5 months
  • 50% to 60% savings compared to traditional housing while maintaining a suburban lifestyle
  • Lot rents between $450 and $550 versus $1,500 average traditional home rents

Listing Contacts

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Loan Amount
$0.00
Annual Debt Service
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Annual Cash Flow
$2,052,000.00
$171,000.00/mo

Valuation Metrics

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DSCR
17.1%
Cap Rate
17.1%
ROI

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