Developer Tony Ardizzone, through his Scottsdale, AZ-based company The Monolith Group, is moving full-speed ahead on a pipeline of nine self-storage properties totaling around 1 million square feet throughout the Southwest.
He doesn’t plan to stop there either.
“Our current mission is to construct, acquire and own 50 self-storage facilities within the next 72 months,” Ardizzone told the SpareFoot Storage Beat.
Ardizzone said they are looking to talk to anyone looking to sell entitled properties or have an interest in joint ventures in major MSAs.
Monolith has already completed two of the nine projects in its current pipeline in 2015, and is putting the finishing touches on its third project at 448 N. Green Field Road in Mesa, AZ.
That facility will be sold to Extra Space Storage at C of O on April 5, Ardizzone said.
The 84,118-square-foot facility offers 614 units and took just over five months to build. It took quite a bit longer than that to get the necessary permits.
“The entitlement part took us approximately a year and half due to in-place real estate agreements associated with the adjoining commercial parcels,” Ardizzone said
The neighboring landowner had plans to build his own facility, but wasn’t close to getting started. Ardizzone eventually got the landowner to acquiesce. Such challenges go with the territory as Monolith targets prime sites for its projects.
“All of the Class A projects we are involved in are located on Main and Main at infill hard corners,” Ardizzone said, “It is much harder and longer to achieve but in the end more palatable and more successful lease up because of our process.”
The remaining properties in Monolith’s development queue are located in Scottsdale, Glendale, Chandler, Littleton, CO; Aurora, CO; and Las Vegas, NV, the last two of which are scheduled to wrap up in March 2017. The new projects will be professionally managed by one of the publicly traded self-storage REITS, Ardizzone said.
Ardizzone said because of his preference for high-traffic locations, the current slate of projects has been years in the making
“I saw the self-storage market rebounding back in 2010 and 2011. I knew there was going to be a window, that’s why that pipeline we own now is established. We aren’t getting in now like most of these developers who now have to fight the battle at the back of the line,” Ardizzone said.
Self-storage gold rush?
Ardizonne estimates a five to seven year runway for self-storage construction.
“The industry is experiencing a major deficit in self-storage product coming on the market and lagging behind in in Class A product since 2010 to now,” Ardizzone said.
That gap has attracted scores of new entrants into the self-storage industry, but many of those can’t get funding from banks because they lack experience, Ardizzone said. Even if developers from other disciplines can get funding for a storage project, that doesn’t guarantee they will be able to finish the job.
Monolith’s project in Littleton, CO is the product of one such situation.
“We just purchased a fully entitled property in Littleton, CO where the developer took approximately three years to get entitlements and he ran out of money,” Ardizzone said. “He had never developed a storage project before.”
Like father, like son
Ardizzone on the other hand, has self-storage in his blood.
His father, Carlo, was an architect who graduated from NYU and came to Arizona. He started developing storage facilities with his partner Gene Cox in the 1980s under the name Armored Mini Storage.
Ardizzone’s own background is in finance, commercial real estate development and brokerage.
He worked with a national company for 12 years where he learned the ins-and-outs of the entitlement process. In 2001, he started the Monolith Group to develop storage and other commercial properties.
The Monolith Group is vertically integrated, which Ardizzone said is key to the company’s success. Ardizzone’s operations consist of a development company, a construction company and brokerage company under one roof. He also has a a dedicated legal team working on entitlements and an in-house CPA that monitors construction and existing asset management.
“We can bring our self-storage development to the market at approximately 12 to 18 percent below what market conditions present,” Ardizzone said.
The only thing Monolith doesn’t do is manage its facilities.
“We knew we couldn’t compete with the big boys, they spend $23 million a year on Google. They are successful at what they are doing,” Ardizzone said, “Why reinvent that portion of the wheel?”
Below is a list of Monolith’s current projects:
1. Phoenix, AZ (pictured at top)
Address: 18625 N. Tatum Boulevard
Gross Square footage: 98,897
Completed Date: September 2015
2. Gilbert, AZ
Address: 765 E. Baseline Road
Gross Square footage: 87,400
Completed Date: June 24, 2015
3. Mesa, AZ
Address: 448 N. Greenfield Road
Gross Square footage: 84,118
Delivery Date: April 5, 2016
4. Scottsdale, AZ
Gross Square footage: 138,935
Delivery Date: December 1, 2016
5. Glendale, AZ
Gross Square footage: 123,100
Delivery Date: January 15, 2017
6. Chandler, AZ
Square footage: 105,000
Delivery Date: February 1, 2017
7. Littleton, CO
Address: 11545 West Belleview
Gross Square footage: 64,905
Delivery Date: April 2017
8. Las Vegas, NV
Gross Square footage: 98,000
Delivery Date: March 2017
9. Aurora, CO
Gross Square footage: 91,277
Delivery Date: March 2017