SROA Capital Buys 11-State Self Storage Portfolio

Image by Joshua Coleman via Unsplash

SROA Capital Fund VIII has acquired a 30-property self storage portfolio totaling 23,389 units across 11 states from five separate sellers. JLL Capital Markets arranged the $250 million deal that includes a 100 percent ownership stake of StayLock Storage.

StayLock Storage, a multi-state self storage operator that had been owned by investment firm Cequel III and private equity company Thompson Street Capital Partners, will become the 40th storage company rebranded to Storage Rentals of America. Terms of the StayLock acquisition were not disclosed.

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JLL Capital Markets worked on behalf of SROA Capital Fund VIII to place the three-year, floating-rate facility with Goldman Sachs. It is structured to fund acquisitions from five separate sellers of new properties as well as expansion projects at existing properties for SROA Capital Fund VIII, which will have its final close for investors in the coming months. This investment, which covers properties in Florida, Georgia, Iowa, Indiana, Maryland, Michigan, Mississippi, Ohio, South Carolina, West Virginia and Wisconsin, brings the fund’s total investments to more than 4 million rentable square feet.

The properties acquired encompass 3.1 million rentable square feet with a weighted average physical occupancy of 89.4 percent. The average population and median household income within a five-mile radius of the portfolio properties are 80,000 and $55,500, respectively.

All 30 properties acquired will be managed by Storage Rentals of America, which currently manages nearly 100,000 units totaling more than 11 million square feet across 19 states.

Benjamin Macfarland III, CEO of SROA Capital, a West Palm Beach, Fla.,-based private equity real estate and technology operating platform, said in a prepared statement that the facility provided by Goldman Sachs provides the firm with the ability to make transactions quickly and implement its value-add strategy before locking in longer-term fixed-rate financing maximizing yield and total return for investors.

Griffin Guthneck, JLL Capital Markets senior director, said in his prepared remarks that the facility was structured to finance acquisitions of cash-flowing properties and pre-stabilized lease-up assets as well as to capitalize ground-up expansions at existing properties.

JLL Capital Market Deals

Guthneck was part of the JLL Capital Markets team that arranged the financing. The team also included Managing Directors Brent Bowman and Matthew Schoenfeldt and Analyst John Williamson.

Guthneck has worked with SROA Capital in the past. In October 2019, Guthneck and JLL Capital Markets secured an $87 million five-year loan for SROA Capital to refinance a 36-property, multi-state storage portfolio in Florida, Kentucky and Ohio. That same year, JLL’s team arranged a $32 million loan for SROA Capital to refinance a 400,000-square-foot storage facility in New Jersey.

Earlier this month, another JLL Capital Markets team arranged the sale of Oakville Self Storage, a 934-unit facility in Alexandria, Va., owned by a private investor. The new owner is a partnership between Potomac Yard Mini U Storage, Dahn Corp. and Elevation Fund 8.

In July, a JLL Capital Markets team represented The Storage Investment Group which acquired Cornerstone Self Storage, a 359-unit self storage facility in Westerly, R.I., from a private investor. JLL Capital Markets arranged the acquisition financing provided by the Washington Trust Co.