In an era when people are racing in and out of employment opportunities (see: “Great Resignation”), Florida-based Anthony Scavo has held just three jobs, including 26 years at Lefrak, which he joined at age 17 and where he moved up to senior managing director of development and construction.
These days, he’s Chief Operating Officer at Basis Industrial, which just rebranded itself from MCSS Self Storage Development & Investment and made two large real estate “small-bay” purchases in Florida, defined as industrial assets up to 7,000 square feet or less. They focus on multiple tenants and try to include office space in the mix.
Yes, self-storage remains hot. But the competition can be fierce and bureaucracy can stifle progress, Scavo sees. Hence the interest in small-bay scenarios.
Scavo emphasizes that Basis will try to lend a homelike character to its small-bay purchases. “For one of our September openings, it’ll have a bakery, recording studio, auto mechanic, woodworker and a crematorium,” he said. “When someone is ready to move out of their first (office) home, it’s ideal for them to step into this building. We’d love for them to stay with us for their whole career.”
Though the self-storage industry remains hot, Scavo also saw that, “The market was getting oversaturated in the self-storage development field,” he said, justifying the small-bay search. “Also, the areas with the highest rent and the most demand are generally in the most populated areas.
“In small-bay, there are still opportunities out there. When mom-and-pop operators want to sell, I think there’s a good opportunity there. For larger sites, we buy for the opportunity, not just to get our name out there that we bought a big development.”
Basis kicked off its new life by making two Florida acquisitions in Orlando and Miami under its new subsidiary, BaySpace. It acquired the former Metacenter Palmetto in Miami, a mixed-use property with self-storage, small-bay industrial and co-working sites, for $33 million. The building has more than 180,000 square feet and is next to the Palmetto Expressway.
In Orlando, BaySpace purchased a 33,000-square-foot small-bay industrial building for $4.5 million. BaySpace now hopes to obtain industrial properties along Florida’s Space Coast.
“Hopefully next year, we start spreading beyond Florida,” Scavo said. “We’re going to keep growing this; we know it’s going to be great.” Basis is particularly interested in Florida’s I-4 corridor, specifically building in Tampa, Sarasota, Melbourne and Orlando. And along Interstate 95, Basis is interested in Miami north past Palm Beach.
In fact, Basis plans a Sept. 30 dual opening, with 300,000 square feet in Melbourne and 200,000 square feet in Orlando.
“We were finding it more difficult to find great self-storage sites, so we’re reworking at other avenues,” Scavo said. “We saw that the industrial market was hot in Florida.
“Small bay is like self-storage was like 20 years ago. We thought we could bring an institutional quality to it, build out our properties in those four areas.
“BaySpace in Miami is doing spectacular,” Scavo said. “We’re getting higher rents than we first anticipated from the warehouse tenants; that helps keep the warehouse occupancy at 100%, and we’re negotiating with the tenants for a higher rent at BaySpace. Our goal is to have lower-than-market rents.”
Daniel Weinstein, Basis Industrial partner, and fellow industry veterans Jay Massirman and Stephen Garchik founded Basis Industrial. The company has more than 2 million square feet of self-storage and industrial real estate, and expects to close on another 1 million square feet this year.