HOUSTON-To help fuel its expansion plans, Private Mini Storage Ventures LLC, the investment arm of locally based Private Mini Storage Inc. has established a joint venture with New York City-based ING Clarion Partners' Lion Value Fund for more than $250 million in investment activities.
ING's fund will contribute $67.5 million in equity to be used in conjunction with Private Mini Storage's already established $7.5 million of seed capital and about 70% leverage for investment activity in Texas, Georgia and other southeastern states. The activity will include land purchases to support 65,000 sf to 75,000 sf of build-to-suit development and acquisitions of already existing storage spaces.
"They'll be focusing on a blend of 75% acquisition and redevelopment and 25% product development," says John Nikolich, managing director of Flint Creek Partners LLC, in Chicago, which arranged the financing for Private Mini Storage Ventures. Charles Underwood with McDade Smith, Gould, Johnston & Mason in Houston represents Private Mini Storage in its transactions.
Nikolich tells GlobeSt.com that Private Mini Storage, which already has about 130 warehouses valued at nearly $55 million, has brought some of its assets into the joint venture as well as four additional properties that are now in escrow. "As they find new opportunities, they'll continue to close on them and bring them into the joint venture," he adds.
From the fund's point of view, this is a good investment, Nikolich continues. "During the past three to five years, mini-storage has graduated into a core-plus asset class," he says. "It has the attributes of core real estate assets, with none of the negatives--no carpeting, no tenant rights. And, we're not building an industrial box on spec."
Nikolich says the option was to "have remained status quo and dealt with the existing properties or continued growing. With this joint venture, they have the ability to act on deals, pursue deals currently in the pipeline and give them the comfort of knowing they have the resources to close."
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