A data-loving statistics guru is one factor behind NorthPoint Development’s push to fast become one of the nation’s major players in self-storage.
The privately held Riverside, Missouri, company works in industrial properties, multifamily communities and senior living communities as well as self-storage. It has ambitious plans to have 13 self-storage facilities, which it calls Beyond Self Storage, built or under construction by year-end.
The stats guy is Ben Hagedorn, 30, who joined the company in February 2016 as director of self-storage operations. He is the brother of NorthPoint company founder and CEO Nathaniel Hagedorn, 36.
“I got interested in it from the data perspective,” Ben Hagedorn said. “There’s not a lot of information about self-storage out there.”
Hagedorn spent a lot of time researching the space, developing modeling assumptions, and applying his finding to the company’s site-selection process.
“That’s what really got me excited about the space: the ability to apply strategic analysis,” Hagedorn said.
Truth in numbers
NorthPoint piqued his interest when it purchased the U.S. Safety Building in Lenexa, Kansas, and added self-storage units when it had space remaining after leasing to two tenants.
The results impressed Hagedorn, who told his older brother that NorthPoint had a promising future in self-storage. Hagedorn researched the field on nights and weekends for six months while working at Infegy, a software company that provides market research reports for consumer research, during the day.
NorthPoint opened Joco Self Storage in Overland Park, Kansas, in 2015. It expects to open another facility this month in St. Louis and a third this spring in Chesterfield, Missouri. It’s building two more in the Minneapolis area.
The company builds 100,000-square-foot self-storage facilities, which cost about $9 million each, excluding land and soft costs.
Hagedorn said NorthPoint thinks St. Louis can support an additional three self-storage facilities and Minneapolis another two or three. NorthPoint is building one in Detroit (room for four or five more) and two in Pittsburgh (room for three more).
“We’re also looking at Philadelphia, Chicago, Tampa, Baltimore, New Jersey and Washington, D.C.,” Hagedorn said.
Looking down the runway
If this sounds too ambitious, then consider that the U.S. Census data said the self-storage market has climbed to over $32 billion, growing 3.5 percent annually.
“What we’re seeing is that there’s a lot of interest in self-storage, but everything is cyclical,” Hagedorn said. “A lot of people say we’re at our peak, and the next cycle will go down. But it always comes back. It’s a good business to be in. We feel strongly that our data-driven approach and the fundamentals of self-storage are good things.”
NorthPoint raised $40 million from high-net-worth families from Kansas City in a recent funding round, winding up with $115 million in working capital.
The company favors multistory buildings and smaller lots of about 2 acres, which are easier to get approved and place NorthPoint into more infill suburban markets.
Beyond Self Storage facilities include drive-through access to units, conference rooms for tenants’ use and at least 36 security cameras.
“It’s fun to think about,” Hagedorn said. “What’s most important to us is being a respected operator. It’s creating the right culture, the right teams and the right product that our teams can be most proud of.”
He noted that employees rattling around in such large facilities can feel isolated.
That’s where Stevey Heinrich, the operations director who joined the company in February 2016, comes in. Her job includes helping Beyond Self Storage to get more involved in the community, such as conducting blood drives and toy drives.
She’ll also oversee store openings, hirings, store operations and boosting morale, such as when the company flies employees to headquarters each quarter to help build camaraderie.
NorthPoint has developed more than 30 million square feet of Class A industrial space since it opened in 2012. It operates in 11 states.