Q&A: StorSafe launches third-party management unit to fuel expansion

Al Harris
Published February 7, 2024

StorSafe Self-Storage’s recent entry into third-party management is only part of the Skokie, Illinois-based firm’s aggressive plans for long-term expansion across the nation.

Last month, StorSafe, owner of 29 facilities across the Midwest and Southeast, announced the formation of a new third-party management division that will offer both customer and facility management of storage facilities.

Matt Clark, director of operations at StorSafe, said the firm is looking to add potentially scores, if not hundreds, of facilities to its portfolio, via third-party management agreements, acquisition of existing facilities, and construction of new StorSafe outlets. StorSafe, launched by  real estate agency Elmdale Partners in 2021, currently has four new facilities under construction in Florida and Indiana, bringing its total owned facilities to 29. Later this month, the firm, whose financing comes via its founders and other private investors, is set to close on the purchase of another facility in South Carolina, according to Clark.

If all goes well, the company is looking to expand beyond its mostly secondary and tertiary markets in the Midwest and Southeast – and may even go public down the road, Clark said.

SpareFoot recently spoke with Clark about StorSafe’s expansion plans and the self-storage market in general.

SpareFoot Storage Beat: Why are you getting into third-party management at this point? Why not sooner?

Matt Clark: Well, we actually have had experience in third-party managing for another owner already, in 2021. It was basically a deal that we were working on to try and acquire a property in Racine, Wisconsin. And in the interim, the new owner of the business didn’t understand self-storage and wanted to know if we would manage it for him in the process of us buying. And we said, sure. So we got together a contract from some of our broker friends in the industry, and tailored it to fit the needs of the client. And we just added their business to our group of storage facilities.

How big do you guys hope to get in terms of management?

We are currently racing towards (more) properties. And, you know, we’re looking to go public, eventually, is our goal. So that’s what we’re shooting for. But we don’t want to rush. We want to do it in a time and manner of our choosing, where it makes sense and we don’t lose our edge.

When do you see possibly going public?

Well, that is a good question. But hopefully within 10 years.

Do you plan to continue acquiring properties and building properties, in addition to growing your third-party management business?

Yes. We have no intention of slowing down. But as we grow, I think we’ll get more efficient. And we’ll be able to acquire more properties per month and per year than we were the year before. … I think we’ll do more in acquisitions and construction (than third-party management). As for third-party managing, I want to stress that there’s no limit, you know, number wise, but we don’t want to rush into it. We have two properties right now under third-party management. We plan to add more as it makes sense without causing a strain on our overall portfolio.

Do you see yourselves getting more outside investment money moving forward?

Yes, we are currently talking to investment groups to grow with us and to add more resources in our acquisitions.

We love the Southeast and we continue to find deals in the Midwest that make sense for us. But we’re also looking at the northwest side of the country and the Rockies, in that area in the Southwest. So we’re starting to expand to cover more of the continental U.S. We’re open to any areas that make sense. But I would say our preferences is in the areas that are more conducive to our policies and self-storage and taxes. That makes a difference.

What about the Northeast? Does that fall under that high tax, high regulation type of category that you’re talking about?

No, not all areas. There are plenty of areas in the northeast still for us to explore. But just at this point, it’s not our focus. I think we’re more interested in the secondary and tertiary markets — and a lot of that in the East has been already developed. And so it’s just nothing has happened there yet.

The secondary and tertiary markets seem to be your sweet spot. In your view, is there still plenty of opportunities there?

Oh, yeah. We’re looking forward to 2024 for creating more and more opportunities, because of some of the interest rate hikes and the inflation has put pressure on some of the smaller operators to make ends meet. And that creates more opportunities for us to come in there and professionally manage facilities and find value that’s not been maximized.

What is the company’s view of the overall self-storage market today, nationally? How’s it going out there?

Well, I think it’s getting better than what we experienced in, say, the last half of 2023. You know, the housing market has affected our business substantially due to the lack of home sales. But I think we’ve adjusted to that and adapted and we’ve seen it bouncing back consistently now in 2024. I don’t think it’s going to be our best year in 2024 in terms of record gains. But I think (the market) is steadily heading back up towards another peak eventually. And we’ve just come off of a great peak after COVID.

Al Harris

Alexander Harris is a reporter covering the business of self-storage. He obtained his degree in journalism from Virginia Commonwealth University. He loves reading Elmore Leonard novels and listening to classic country music. You can call him Al.

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