Who Said Self-Storage Can't Be Sexy?

MIAMI—Who said self-storage can't be sexy? Stein Investment Group is setting out to prove it units with metal rolling doors can indeed have appeal.

The company is planning to bring almost 250,000 square feet of self-storage facilities to metro Atlanta, a region dotted with suburban and urban submarkets with a dearth of this asset type. Construction is currently underway in the Old Fourth Ward on Decatur Street Self-Storage that will provide modern storage solutions to residents of the surrounding urban, residential communities. When the self-storage assets are completed, the firm will own and operate four self-storage facilities.

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, according to a recent report in the Wall Street Journal. What's more, self-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.

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. Stein recently completed 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 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,” says Jeff Stein, founder and principal of Stein. “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.”  

Stein acquired the 1.42-acre property on Johnson Ferry Road, about 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. The facility is expected to open January 2014.

Located at the intersection of Decatur Street and Boulevard, within Atlanta's Beltline District, the 110,000-square foot self-storage 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 self-storage 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. “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. 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.”

Stein acquired the 1.42-acre property on Johnson Ferry Road, about 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. The facility is expected to open January 2014.

Located at the intersection of Decatur Street and Boulevard, within Atlanta's Beltline District, the 110,000-square foot self-storage 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 self-storage 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. “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. 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.”