A Tampa, FL-based real estate investment and development group has turned to its backyard to launch a self-storage business that already boasts a pipeline filled with projects totaling $64 million.
Broome Storage LLC, an affiliate of Broome Capital LLC, has six self-storage projects in the works in the Tampa-St. Petersburg area, Jordan Farrales, the firm’s director of acquisitions and development, told the SpareFoot Storage Beat. Three of them are under construction, and the three others are in the planning and permitting stage.
The three facilities underway now are in downtown St. Petersburg, south Tampa and the Seminole Heights neighborhood of Tampa. Farrales said Broome Storage will break ground soon on the three other facilities, which will be in downtown Tampa, Altamonte Springs and Clearwater.
In a news release, Farrales said that because Broome executives are “local sharpshooters” in Tampa-St. Pete, “we’ve been able to successfully navigate around any potential issue of oversupply by identifying these untapped up-and-coming submarkets.”
Growth on the horizon
Over the long term, Broome Storage aims to develop a total of five to seven facilities a year at urban infill sites in Tampa as well as Orlando, FL; Atlanta, GA; and Charlotte and Raleigh, NC, according to Farrales. He said Broome Storage is focusing on those markets because of their “tremendous” population and income growth.
Family-owned Broome Capital began exploring the self-storage sector in early 2016 and bought its first piece of land for development in mid-2016, Farrales said.
In the chase
Self-storage complements Broome’s development of luxury townhomes in urban infill locations around the Southeast, he said. Today, the firm has more than $200 million worth of townhomes in its development pipeline under the Icon Residential banner. The firm also invests in distressed housing through an arm known as Proluxe Properties.
“Demographically, there are a lot of synergies between the end user for self-storage and our townhomes. They are both either baby boomers, empty nesters or millennials migrating to the urban core, where your livable space is shrinking and there is a desperate need to store belongings,” Farrales said. “It’s actually been the case that for each of our townhome developments, there is a self-storage facility that we are developing nearby.”
Farrales said Broome Storage will own all of the facilities it develops but will tap third-party managers like self-storage REITs Extra Space Storage Inc. and CubeSmart to operate them.
On its website, Broome Capital says the firm’s primary self-storage objective is to choose sites and design Class A facilities in strong retail locations that self-storage REITs are “aggressively” chasing.
Room for more
That chase is supported by the state of supply and demand in the Tampa-St. Pete market.
STR Inc., a data and analytics firm based in Hendersonville, TN, reported that as of April 2018, the Tampa-St. Pete metro area ranked 33rd among major U.S. metro areas for self-storage supply growth expected to happen over the following 12 months. In all, STR counted 45 self-storage projects that were in some stage of development.
Tampa-St. Pete had 341 properties and about 17.1 million net rentable square feet as of April 2018, STR said. That put it at No. 17 among major metro areas for available square footage.
Ryan Clark, director of investment sales at Tampa-based SkyView Advisors, a self-storage brokerage firm, said he thinks the Tampa-St. Pete market offers plenty of room for more storage facilities.
“Although storage supply continues to grow, Tampa Bay also continues to demonstrate robust population growth, which should help absorb new supply,” Clark said.