Value add opportunity at Store Safe Self Storage attracts new owner

Success springs forth

Store Safe Self Storage | Fountain Hills, AZ

Challenge: Ventura Investment Co., a California multifamily owner wanted to sell their 48,580 square foot self storage asset in Fountain Hills, Arizona, a sub market of the Phoenix MSA. The sub market, with a population less than 22,000, is over supplied with self storage and isolated 18 miles from central Phoenix. Further, the client’s expectation to sell at $6,000,000 represented a $122/square foot price, attainable by most climate control properties, but with Store Safe being mostly non climate control, obtaining the aggressive pricing would be a challenge. Further, the REITS and large private equity investors were shying away at the time from investing in Fountain Hills and in Phoenix.

Strategy: This property, a Class A asset, would be attractive to investors in nearly any market. Colliers highlighted current market strengths such as rapid population growth, high barrier to entry to future self storage development, and median household income of over $80,000. Value add revenue enhancements benefitting the investor such as tenant insurance, the under market rental income and above market operating expenses were also marketed. Colliers needed to identify an operator who could curb controllable expenses and utilize a strong internet marketing presence. A broad marketing net was cast to storage owners and investors across North America.

Services: On February 22, 2017, Colliers presented the Opinion of Value to the owner with assurance that a fully qualified buyer would be identified in 60 days. A best in class Offering Memorandum was sent to nearly 6,000 storage owners and investors. The listing team coached the on site management team on protocol while interacting with investors during site tours. All investors registered on the website were contacted as to their interest levels and underwriting status, while the owner was kept fully apprised of the marketing progress. Colliers negotiated all offers and the purchase agreement through the closing.

Results: 73 investors reviewed the marketing package, property financials and due diligence materials. Nine (9) property tours were conducted by the Colliers listing team and the Store Safe management staff. Seven (7) offers were received with two (2) at list price or higher and the selected fully qualified investor, Southern Self Storage submitted their offer on April 20th with final agreement to terms and execution of the PSA on May 11th. Southern Self Storage, with an existing Colliers relationship, recognized the value add opportunities available at Store Safe and closed June 30th at 99.6% of list price.

Testimonials

"We want to thank each of you for all your great work getting the Fountain Hills deal signed, sealed and delivered! You are 3 true professionals and were a pleasure to deal with. Let’s do some more business!"

Bob McIntosh
Buyer
Southern Self Storage


"The Colliers Self Storage Group provided excellent service and results from initial marketing through close of escrow of the 2017 sale of my property. Gary Cooper, Tom Gustafson and Tyler Bush were proactive and organized, and demonstrated a deep understanding of the market, of possible buyers, and of my best interest as a seller. After decades of transactions, I have not worked with better or more organized advisors."

Bart Stern
Seller
Ventura Investment Co.