As part of a six-facility portfolio acquisition in Indiana, a commercial real estate development company once again owns two self-storage facilities it previously controlled.
Mishawaka, IN-based The Sterling Group paid $15 million for the 364,000-square-foot portfolio. The seller was Indianapolis-based Herman & Kittle Properties, which operates the Infinite Self Storage brand. Herman & Kittle still operates several facilities in Indiana, Illinois and Ohio.
Sterling Group will operate the newly purchased facilities under the Mini Storage Depot brand. Sterling Group now has a total of 18 facilities in Indiana, Michigan and Ohio.
The six newly acquired facilities are in the Indiana cities of Elkhart, Evansville and Fort Wayne. Two of the facilities in Elkhart — at 1665 W. Franklin St. and 2421 Cassopolis St., were developed by Sterling more than 20 years ago. Sterling CEO Larry Swank said his company operated the two facilities for 15 years before selling them to Herman & Kittle in 2008.
“Right after we sold them, the economy went into the recession. Their main focus was apartments, and they couldn’t get into the flow of what do to with those properties,” Swank said.
The portfolio also included another facility in Elkhart, two facilities in Evansville and one facility in Fort Wayne.
A second chance
Swank said Sterling was interested in the six facilities as soon it learned the portfolio was on the market, but Sterling wasn’t the highest bidder at first. Two other buyers were supposed to split up the portfolio, but they couldn’t close the deal, according to Swank. That’s when the portfolio went back on the market and Sterling renewed its interest.
Swank said the facilities are in good condition and do not require renovations. However, the portfolio does need some work on the leasing side.
“When we sold, it was 95 percent leased. We bought them back at 50 percent occupancy,” Swank said. “We saw a lot of upside with our management team.”