Orlando, FL-based operator Simply Self Storage has completed the acquisition of a 12-facility portfolio in Michigan for a total of $61.3 million.
The deal is the largest of several smaller portfolios Simply has purchased over the past few months.
“Simply Self Storage had a position in Michigan and wanted to expand it. These fit nicely into their portfolio,” said Chico LeClaire, senior vice president of investments in the Denver, CO, office of Marcus & Millichap.
We thought that we were probably topping the limit of where these particular properties would go, at least under our management.
— Maurice Pogoda, president of Pogoda Companies
LeClaire represented the seller, Maurice Pogoda, president of Pogoda Companies. Adam Scholosser and Matt Tyler of Marcus & Milllichap also represented the seller.
The portfolio spans more than 749,000 square feet with over 5,500 units. The facilities are in various Michigan markets, including Grand Rapids, Ann Arbor and Detroit. The facilities had operated under the name National Storage Centers.
Time to sell
Maurice Pogoda told The SpareFoot Storage Beat that it was a good time to sell the 12 facilities, thanks to the strength of the self-storage market — especially the low cap-rate environment.
“These particular properties, at least from our perspective, were mature,” Pogoda said.
Under his company’s management, the facilities achieved year-over-year increases in operating income for the past four years in a row.
“We thought that we were probably topping the limit of where these particular properties would go, at least under our management,” Pogoda said.
Pogoda had owned some of the properties in the portfolio since the 1990s. Ownership of the portfolio included several outside investors.
Still seeking acquisitions
Pogoda still operates a portfolio of 10 family-owned facilities in Michigan. The company has management contracts for another 18 properties in Michigan and Ohio.
“We are not as big as we were, but we still aren’t small,” Pogoda said.
Pogoda said his company hasn’t lost its appetite for acquisitions. “We are actively looking for the right kind of value-add opportunities that we always looked for,” he said.
A market with upside
LeClaire said the portfolio was marketed to a limited group of potential buyers and received five or six offers. The rebounding Michigan economy contributed to interest in the portfolio, he said.
“Michigan had a bad reputation during the recession because it lost so many jobs in the auto industry, but it has come back with a vengeance,” LeClaire said.
Unemployment in the state bottomed out at 14.2 percent in August 2009 and since has rebounded, with the rate sitting at 6.3 percent in December 2014.
Following the deal, Simply Self Storage has 44 locations in Michigan, according to its website. In December, Simply bought a portfolio of five facilities in that state. Also in December, Simply bought a seven-facility portfolio in Memphis, TN, for $16.6 million.
Simply has more than 160 locations nationwide and ranks among the country’s 10 biggest self-storage operators, according to Inside Self-Storage.