The investment team also closed on the site for Johnson Ferry Self-Storage in East Cobb on August 12. Both properties will be completed early 2014. In addition, the redevelopment of Hudson Self-Storage following a 2012 fire was completed in March. The firm’s $17.2 million investment makes progressive design and state-of-the-art amenities a priority among this maturing asset class.
“What used to be a product known for unattractive metal buildings with storage subject to environmental conditions, has evolved to an asset class that is architecturally attractive, many with modern retail storefronts offering coffee and Wi-Fi services, with climate-controlled, secure space in upscale or burgeoning communities,” explains Jeff Stein, founder and principal, Stein Investment Group. “The reality today is that there are Atlanta submarkets – both intown and suburban – that fall well below the national average of seven square feet of self-storage space per person, which is even higher in urban markets.” Upon the completion of the Decatur Street and East Cobb properties, the firm will own and operate four self-storage facilities.
Stein Investment Group acquired the 1.42-acre property on Johnson Ferry Road, approximately 500 feet south of Shallowford Road in the heart of East Cobb, with plans to invest $6.5 million to deliver a 90,000-square foot, state-of-the-art self-storage facility. Johnson Ferry Self-Storage is a three-story, climate-controlled building with two oversized elevators and electronically controlled access into the facility. The 573-unit building is equipped with modern storage features such as a retail office with storage supplies, a coffee bar, Wi-Fi access and community bulletin boards. To reflect the market’s high-income demographic, the facility will include larger unit sizes and climate-controlled wine storage. The architecture reflects the surrounding, upscale communities with high-end finishes completing the upscale environment. The facility is expected to open March 2014.
“Unlike the East Cobb facility, Decatur Street will cater to the apartment and condominium residents who reside in communities such as Fulton Cotton Mill Lofts, Montage Old Fourth Ward and Alexan 360 – as well as the 30,000 students at nearby Georgia State University,” explains Stein. “Despite the real estate cycle, this market has seen healthy residential growth driven by the neighborhood’s proximity to Downtown and Midtown.” Construction is currently underway at the $9.2 million Decatur Street Self-Storage in the Old Fourth Ward District in downtown Atlanta.
Located at the intersection of Decatur Street and Boulevard, within Atlanta’s Beltline District; the state-of-the-art, 110,000-square foot facility includes a five-story, climate-controlled storage building that houses 854 units along with two oversized elevators, a covered loading/unloading area, drive-up exterior units and a conference facility for its renters. A retail storefront also fronts Decatur Street and adheres to the Beltline design principles. The development features electronically controlled access onto the premises and into the storage building, along with a bright, clean and secure interior environment with motion-controlled lighting, music, intercoms and large corridors for ease of accessibility. “Even after our facility is complete, the trade area will still only contain 5.3 square feet per person – and most of the existing product is aging,” concludes Stein. The facility is expected to open January 2014.
Originally built in 1997, Hudson Self-Storage reopened in March with a $1.5 million facility upgrade. Located in Stockbridge on Hudson Bridge Road approximately 500 feet west of Interstate 75, the 46,700-square foot facility now features 21st-century amenities such as Wi-Fi, a coffee bar and conference room along with upgraded security features such as video surveillance, motion-sensor lighting and 24-hour monitoring. The 422 units are nearly fully occupied within six months of re-opening.
“We believe that a supply and demand imbalance exists within specific Atlanta submarkets and, therefore, see significant opportunity to build a self-storage portfolio of profitable, state-of-the-art facilities that set a new standard for this asset class,” explains Stein. “The conditions for self-storage development are prime with Wall Street considering this asset type as ‘recession proof’ based on its performance since 2008. Our team is actively seeking those nodes with healthy residential growth and high barriers to entry.”
According to The Wall Street Journal, the self-storage sector is growing in popularity among both private-equity investors and entrepreneurs. The asset sector is extremely fragmented with single-site operators representing over 90% of the 50,000 US storage facilities, keeping investment favorable. In addition, Storage REITS have outperformed the other REIT asset classes and the S&P 500 since 1993. Couple that with low overhead, relatively minimal maintenance costs and a profitable pro forma, the self-storage asset class is proving its viability among investors.
About Universal Storage Group
Atlanta-based Universal Storage Group, a management, consulting, training and developmental services company that specializes in self-storage, manages Stein Investment Group’s storage facilities. For more information, please visit: https://universalstoragegroup.com/
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