Barings, Canvass Capital Launch $250M Self-Storage JV
Partnership to grow portfolio across Southeast, has closed on 3 NC assets and site for new facility in SC.
Investment management giant Barings has entered into a joint venture with Canvass Capital to acquire and develop self-storage properties throughout the Southeastern US.
The joint venture of the two real estate investment managers plans to invest up to $250M of equity into acquiring and developing self-storage space in the Southeast over the next few years.
The Barings and Canvass partnership doesn’t have a formal name, but it’s already closed on the acquisition of three self-storage assets in the Lake Norman region north of Charlotte, NC.
The acquired assets in NC include multiple buildings totaling 1,129 units with rentable space totaling 163K SF on more than 16 acres.
The joint venture also has acquired a 3.82-acre site in Hilton Head, SC where it plans to build a new self-storage facility. Ground will be broken this fall on two buildings including 1,231 self-storage units and a combined rentable footprint—known in the self-storage sector as RSF—of nearly 150 SF, according to the announcement from Barings.
“We’re excited to enter this strategic partnership with Canvass Capital and target the high-growth self-storage market. The Lake Norman assets and Hilton Head development will be Barings’ first self-storage assets in the Eastern US,” John Ockerbloom, head of US Real Estate Equity at Barings, said in a statement.
“We’ve identified a number of additional assets in the Southeast, currently under contract and scheduled to close in the near future, with value-add upside, expansion or ground-up development potential which will offer attractive risk-adjusted return opportunities for our clients,” Ockerbloom said.
Several major players are attempting to grow regional platforms in the fragmented self-storage sector. Self-storage demand has grown exponentially during the pandemic, fueling the expansion of self-storage on excess land as well as retail conversions to self-storage.
In its development and repositioning of self-storage properties, Barings said it will incorporate sustainable enhancements including solar paneling and additional energy efficiencies. The company said new technological and operation efficiencies will provide long-term growth potential for its self-storage assets.
Canvass Capital said, in a statement, “partnering with a global real estate leader like Barings reinforces our creative approach to investing and strengthens our reach across the capital structure.”
The rise of remote work during the pandemic led to an increase in the migration of millennials seeking more affordable locations with a higher quality of life. This in turn created new demand for self-storage space in markets across the US.
The national average for 10-foot x 10-feet climate-controlled unit rental rates increased by nearly 10% last year, with markets in the Sun Belt reporting YOY increases as high as 15%.