Leon Capital earmarks $200 million for self-storage

Dallas, TX-based real estate equity firm Leon Capital Group has committed $200 million for buying and developing self-storage facilities.

The company recently completed its first self-storage acquisition, a 68,000-square-foot facility in Liberty Hill, TX, an Austin suburb. Leon Capital bought the facility in a joint venture with Move It Management, also based in Dallas. Move It is rebranding and managing the facility, which is at 15725 W. State Highway 29.

The purchase price was not disclosed. Austin-based A-A-A Storage was the seller.

Leading the charge

Jake Walker, vice president of retail development, joined Leon Capital in 2014 and is spearheading the company’s entry into self-storage.

“We are targeting highly sought-after, growing communities where demographic trends support future increased demand for storage units,” Walker said.

Walker works in Leon Capital’s Austin office. Before joining Leon Capital, he was vice president of acquisitions at Austin-based World Class Capital Group, operator of the fast-growing Great Value Storage brand.

To build Leon Capital’s portfolio, Walker plans to look beyond primary markets and find secondary and tertiary markets with submarkets that offer “location-specific demand drivers.”

Assembling the portfolio

Walker said Leon Capital is seeking development and acquisition opportunities in Texas, Arizona, Nevada, Colorado, Oklahoma, Tennessee, the Carolinas and Florida.

Going forward, much of the company’s activity will be geared toward development, Walker said. “I foresee that being a large part of what we do over the next two or three years,” he said.

However, Leon Capital Group does have five self-storage deals in its acquisition pipeline that are set to close by September.

Build vs. buy

Walker said that in many markets, it’s more cost-effective to build than to buy. Plus, new facilities can provide modern amenities that attract customers.

“There is changing demand in terms of what the average renter is looking for in a storage facility,” Walker said. “You’ve seen facilities that have gone up recently, and seen what they look like and how that plays into the psychological aspect of a renting decision.”