Fast-growing Denver has many self-storage facilities in place — but there’s still room for more, according to a new joint venture that plans to spend about $40 million to build three such buildings in the metro Denver area this year.
“While Denver, as a whole, is pretty well-supplied, we felt there were still some projects with low supply ratios,” said Wade Buxton, principal with VanWest Partners, which will handle leasing. “That’s where these three projects come in -– finding the remaining few pockets that still have a demand for self-storage.”
“The growth of Denver is also a huge factor,” Buxton said.
Baron Properties, Haselden Construction and VanWest Partners formed their joint venture in late 2015. VanWest Partners develops retail, townhomes and single-family homes. Haselden is one of the biggest construction firms in Colorado. Baron Properties specializes in multifamily housing.
Two of the projects (Park Avenue Self Storage and Steele Self Storage) will be built from scratch. The third (Grant Self Storage) involves retrofitting the former headquarters of Denver Public Schools downtown.
Park Avenue Self Storage, 2249 Champa St., will have 75,145 square feet, with 3,701 square feet reserved for retail.
Grant Self Storage, 900 Grant St., will have 99,806 square feet, including 4,569 square feet for retail.
Steele Self Storage, with addresses of 3879 Adams St. and 3874-3879 Steele St., will have 58,950 square feet and no retail.
The Park Avenue project began demolition of an abandoned store a few weeks ago; completion of the new building is scheduled for November. The other two projects will begin construction soon, with completion expected in Q1 2018.
Most of the units will be 5-by-5 or 10-by-10 feet, with monthly rent between $1.50 and $3 per square foot.
Galloway & Company Inc. is the architect for all three projects. Waner Construction will build Park Avenue Self Storage. Haselden Construction will put up the other two facilities.
Serving of retail
What kind of retail will go into the first floors of Park Avenue, which will have two retail spaces, and Grant, which will have three?
“There’s likely going to be more local retailers, such as copy shops and small quick service restaurants, such as sandwich shops, those kinds of tenants,” Buxton said, adding that his company has its own in-house broker to speed things along.
The stores would lease out at about $30 per square foot per year.
The joint venture will hire outside help to manage and market the properties; Extra Space is one candidate, Buxton said.
“We are looking at the major companies to hire them to manage these facilities,” he said. “It’s not really our strong suit. They’ll be more successful at managing than we would be.”
All three new facilities will be independent operations.
Looking further out
Since 2005, Buxton’s parents have owned a self-storage operation with about 100,000 square feet in Riverside, CA.
“We’ve certainly learned a lot on the operational side –- what works, what doesn’t work, and the complexities of dealing with cities and municipalities regarding work beyond the development of the facility, such as the right of way,” Buxton said.
The joint venture plans to expand its geographic reach to find other places that need more self-storage facilities, he said.
“We’re all general partners on this, and we’re continuing to look for additional self-storage projects, both inside and outside of Denver,” Buxton said. “We’re looking for both developing projects and existing projects, and to grow the self-storage portfolio. We’ll also look out of state.”