A new venture, composed of a seasoned self-storage brokerage team and a New York investment bank, has formed with the intent of investing $200 million to acquire operating storage facilities around the country.
“We are under contract on a couple of properties now, and we’ve made a ton of offers this past week,” said Rick Schontz, managing partner of City Line Capital. “We are aggressively pursuing lots of markets.”
City Line is based in Philadelphia. Schontz was previously managing director at the Philadelphia office of HFF until this past December when he left to form City Line in January. Matt Weckesser and Matt Hardiman, formerly of the HFF self-storage brokerage team in Philadelphia, joined Schontz to form the new venture.
City Line has partnered with CSG RE, the real estate acquisition arm of New York investment bank CSG Partners to invest in self-storage properties. CSG has invested in more than 65 self-storage facilities, valued at $500 million, since 2012.
“We look forward to continuing our work in the self-storage space, and significantly increasing our activity as we grow,” said Alex Meshechok, managing director of CSG Partners.
Schontz said the company plans to pursue facilities in “tier one” and “tier two” markets across the country. The company plans to secure third-party management services, which will allow them to seek properties in a wide variety of markets, he said.
As the public storage companies appear to be stepping off the gas when it comes to acquiring assets, Schontz said he sees an opportunity for his firm to bid competitively on quality assets.
“I think we can be more competitive than typical private equity,” Schontz said, “And we’ve seen our equity beat out public companies in certain markets.”
Matt Weckesser, who is serving as director of acquisitions, said coming over from the brokerage side gives them a unique perspective as buyers.
“Being on the sales brokerage side, we are able to keep a thumb on the pulse where market cap rates were. Right now, based on our capital structure we see an opportunity to take advantage of the spreads we are seeing,” Weckesser said.