One of the newest self-storage developers in the industry is shaping up to be among the most prolific.
Launched in 2013 and completing its first facility in 2014, Northbrook, IL-based Banner Storage Group is now in the throws of a full-fledged building spree, with a focus on hot markets such as New York City, Miami, Dallas and Chicago.
The company currently has a pipeline of 19 self-storage projects, estimated to cost a total of $185 million.
“Right now our plan is to continue for at least the next four or five years to develop $120 million to $150 million a year of new product,” said Gary Delaney, president.
Within its pipeline, Banner has four projects currently under construction and another eight starting construction by the end of the second quarter of 2016. Those projects will span a combined 1.7 million square feet of space, and will bolster the third-party management rosters of Extra Space Storage and Uncle Bob’s Self Storage. A couple of the projects are C of O deals, Delaney said.
The remaining projects in its pipeline are in the entitlement and permitting phase.
Banner Storage Group was spun out of Banner Apartments, which owns 25 apartment complexes in eight states. The company has been around since 1989.
Delaney, who has previously overseen development at Shurgard and Safeguard Properties, said that Banner’s foray into self-storage is backed by equity from the apartment business as well as its network of investors it has developed over the years raising money for apartment acquisitions.
“Banner has a network of high net worth investors. They have been offering storage to them and investors have been taking up a good portion of that,” Delaney said.
The construction projects are also funded with loans from superregional and local banks, Delaney said.
Since the company started building in 2014, Banner has finished three facilities. Its first project was a conversion of a 106,000-square-foot warehouse at in Lynn, MA. Sovran Self Storage, operator of the Uncle Bob’s brand, purchased the facility in June for $10.1 million, according to property records.
Out of the box
Among its current slate of projects is a ground up construction project in Brooklyn’s Sunset Park neighborhood that is expected to open in early 2017. There are four projects in Miami on track to open during the second half of next year.
Banner has one project nearing completion in Chicago that will be sold at C of O, and two more ready to break ground—one of which is a conversion of a vacant movie theater.
One project about to start construction is an 110,000-square-foot facility at 579 5th Avenue in New Rochelle, NY. Banner is converting a former wine distribution warehouse by adding three new stories to the single-story building. Delaney said they are building out part of the first floor to include a maintenance facility for the city’s parks and recreation department. As part of the deal, Banner received tax abatements for the facility.
More innovative projects are ahead for Banner. Delaney said they recently made an offer on land in downtown Denver where they are looking to team up with Banner Apartments to build a high-rise with four levels of storage and about eight stories of apartments on top.
Delaney said he is searching for opportunities to penetrate additional markets beyond the ones they are currently building in.
“There are a couple of new target markets we are putting the search out to in the next year or two,” Delaney said.
Delaney said the lack of construction over the last five years has created pent up demand in certain markets. Banner is making sure the markets it enters are growing and have the right demographic appeal, Delaney said.
It seems that there are plenty such opportunities to keep Banner busy for some time come.
“Starting a company from scratch, it takes a while to get momentum. Now that we got momentum we are going to bring in one or two projects a month.” Delaney said.
1807 W. Devon Avenue Chicago, IL
641 NW 133rd Street North Miami, FL
2190 SW 8th Street Miami, FL
13725 Montfort Drive Dallas, TX
Starting Construction in 4Q 2015:
91 SW 3rd Street Miami, FL
5602 NE 2nd Avenue Miami, FL
490 Eastern Avenue Malden, MA
579 5th Avenue New Rochelle, NY
1125 E. St. Charles Road Lombard, IL
Starting Construction 1Q 2016:
6185 McCormick Avenue Chicago, IL
7701 Banner Drive Dallas, TX
Starting Construction 2Q 2016:
51-02 2nd Avenue Brooklyn, NY
Entitlement & Permitting:
(2) Dallas, TX
Fort Worth, TX
San Diego, CA