A McKinney, TX-based storage operator has three new facilities underway in the Dallas-Fort Worth area and is setting its sights on growth elsewhere in its home state.
Advantage Storage’s 26 storage facilities are clustered in the Dallas-Fort Worth and Oklahoma City, OK, markets. Now, the company is looking beyond those markets to the Texas hubs of Austin, Houston and San Antonio — three of the fastest-growing areas in the U.S. — for expansion of its portfolio, according to Davis Deadman, head of the acquisitions team at Advantage.
Deadman told The SpareFoot Storage Beat that Advantage will concentrate on building rather than buying facilities in the Austin, Houston and San Antonio markets. The number of facilities envisioned and the timetable for development haven’t been firmed up. Advantage currently doesn’t have a presence in any of those three markets.
Within the past nine months, Advantage has closed on the purchase of sites in the Dallas-Fort Worth suburbs of Prosper and Roanoke and in the Lake Highlands neighborhood of Dallas.
Chicago private equity firm Harrison Street Real Estate Capital has been an investor in Advantage for the past two years, Deadman said. With Harrison Street as its joint venture partner, Advantage has spent more than $50 million on real estate deals during that time. This includes the three sites now under development and the acquisition of another five facilities.
Harrison Street is an active investor in the storage industry.
Advantage developed most of the facilities in its portfolio, with the first facility being built in 1996 in Sherman, TX, and the latest about two years ago in Denton, TX. During the recent recession, the company focused more on acquisitions than development. Now, that balance is changing.
The industry has “turned to a development cycle again for self-storage. You don’t see a lot getting completed yet, but you are seeing a lot on the drawing board,” Deadman said. “We saw that turn around about 12 months ago, so we started looking for sites.”
Deadman said the Prosper and Roanoke locations will be single-story, drive-up facilities. Meanwhile, the Dallas facility will be a two-story building with a Mid-Century Modern design, he said. Construction costs for the three projects weren’t disclosed.
The Lake Highlands neighborhood, one of the wealthiest areas of Dallas, embraced the Mid-Century Modern concept, according to Deadman. In general, the storage industry has moved away from building corrugated-metal “eyesores” on the outskirts of towns toward putting up “aesthetically pleasing” facilities that blend with other property types, he said. “That is really the trend in storage,” Deadman said.