Crescit Capital Strategies has closed on a $16.1 million self-storage financing deal in Philadelphia, its first transaction in what it hopes and expects will be a strong 2021 for self-storage lending in general.
The financing was for Snapbox Self Storage’s acquisition of a 105,000-square-foot, 1,100-unit facility in northwest Philadelphia, in a high-traffic location with “strong demographic growth in the area.” Crescit Capital’s financing capitalized the acquisition and lease-up of the vacant property that was only recently converted from retail to Class A self-storage.
“It was a good opportunity,” Joseph Iacono, CEO and co-founder of New York-based Crescit Capital Strategies, said of the financing deal with Snapbox Self Storage, a major self-storage owner and operator with locations in more than 20 cities. He called the 1 Franklin Mills Boulevard facility in Philadelphia a “high-quality asset” operated by an experienced owner.
On the hunt
And now Crescit Capital, founded in 2018, is on the hunt for its next loan deals amid a recently robust market for self-storage, despite the ups and downs experienced during the early months of the pandemic last year.
In all, Crescit Capital, which offers debt products across all commercial real estate classes, originated a little over $300 million in financing in 2020, about a quarter of it within the self-storage sector. Iacono didn’t provide Crescit Capital’s dollar activity in 2019, saying it was a “growth year” that’s unfair to compare to 2020.
But he indicated last year was initially difficult for Crescit Capital and other financial firms, as the market largely dried up at the beginning of the COVID-19 pandemic, only to come back in the second half of 2020.
Most of Crescit Capital’s self-storage deals last year were for recapitalizations, as property owners sought to shore up financing amid uncertain times, said Iacono. But the acquisition market has started to come back strong, as evidenced by the recent Philadelphia deal.
New-construction lending may take a while to return to pre-pandemic levels, as industry players try to get a better handle on the market, he said.
In all, Iacono, a 30-year veteran of the commercial real estate lending industry, said he expects activity to continue to improve this year, allowing Crescit Capitol to outperform its business in 2020.
“I certainly don’t see things slowing down in 2021,” he said.