Many people have had to close their businesses or delay growth plans during the pandemic.
But Jeremy Friedman, 47, and Grant Reaves, 29, who have worked together in the past, saw it as a golden opportunity to fill suddenly empty big-box stores with self-storage businesses. As the brokerage market slowed, they started Stoic Equity Partners LLC, a private equity real estate firm based in Daphne, AL, in June 2020.
They seek to convert empty big-box retail and office properties into self-storage and utilize high-tech management tools to help run the new businesses.
Opportunities abound, as they fall within the Fairhope, AL MSA, recently named the seventh-fastest-growing entity in the United States.
The partners recently closed their first deal for $5.3 million, buying a former Food World grocery store-turned-office-space site with 45,020 square feet in Fairhope.
We spoke with the partners about their new niche.
When did you create Stoic Equity Partners?
Jeremy Friedman: We formed Stoic in June 2020. It was really a COVID-19 baby. Grant and I both are in the commercial real estate brokerage world. We worked together in the past. During COVID(19), when the phones quit ringing and we had a rare opportunity to work in something new, we decided to start a private equity company. We started working on it in March 2020 and eventually formed the company.
Have you worked with self-storage companies?
Grant Reaves: This is our first foray into the ownership piece of it.
Friedman: I represented several self-storage owners and developers from the brokerage side, but this is our first project where we are the principals.
What are your growth plans?
Reaves: Our goal is to grow our portfolio in the next few years to 15 to 25 assets, through acquisitions, conversions or ground-up development.
Tell us about StoreEase.
Reaves: It’s a third-party management company out of Birmingham, AL. They specialize in third-party management and use technology to more efficiently operate from off site rather than have a full-time manager on the property.
Are there problems with leaving a property unmanned?
Friedman: There will be local contractors that visit the site regularly for cleaning and maintenance. However, the manager of the site is actually sitting in Birmingham and directing all of that.
We believe through the technology, the camera system, the no-key smart lock, that the facility can be managed remotely very effectively. There is someone that walks through each day to pick up trash or clean out a unit. It’s a part-time contractor.
How goes the hunt for your next self-storage involvement?
Friedman: The market is white-hot. We have a ground-up development in pre-development in Pensacola. We have a couple of offers out for conversions, and we are underwriting a couple of acquisitions at the moment. It’s very difficult to find value in the market, especially in acquisitions.
Frankly, we’re the new kids on the block, so we’re not the first group that the sellers or brokers are going to first. It’s a tough market. So we’re having to create development.
How do you get your names out there?
Reaves: We have an extensive list and are in touch with brokers throughout the Southeast, as well as networking through self-storage associations and with owners in the market directly.
What are you proudest of in your professional life?
Friedman: Being able to adapt and persevere through different markets, to create value for my clients and now, ultimately, for ourselves on the principal side of things.
Reaves: The connections and relationships I’ve had throughout my career that have come back to us both personally and professionally years later.
What was the biggest challenge in your professional life?
Friedman: My initial career was in real estate in 2006, so making it through the Great Recession. That experience has affected how I look at opportunities and risk.
Reaves: I would say the biggest challenge in my career was in the starting phases of breaking into real estate. We’re in a smaller market here and so being able to break into that industry can be difficult and take a long time to establish yourself.