Wasatch Storage Partners may be a new name in the self-storage development and investment sector. However, its leadership from two industry veterans – along with capital from a private equity group – is helping to fuel a national expansion.
The Utah-based firm has been on a growth track ever since acquiring its first land parcel in Littleton, CO. at the end of 2015. The goal is to deliver five to six new developments each year with the potential to also complete acquisitions of existing self-storage facilities as opportunities arise.
“The challenge now more so than three years ago when we started is to find a pocket where there is not already one, two or three developers that are already ahead of us,” said Bret Durfee, CEO and chief investment officer for Wasatch Storage Partners.
Feeding a hungry market
Durfee and President & Chief Development officer Scott Wyckoff are tapping industry relationships to identify development and acquisition opportunities from coast-to-coast, although pricing on existing assets has the firm more focused on development at present. Both Durfee and Wyckoff are former Extra Space Storage executives – combined having more than three decades of experience in the self-storage industry.
The original strategy for Wasatch was to accumulate a large portfolio through development and acquisitions that they would then take out to the investment market at some point in the future for sale. However, an aggressive acquisitions market led Wasatch and its partners to test the market, resulting in the sale of its first four properties in early 2018.
“Our exit was definitely sooner than originally planned, but the market was hungry for new product at that point in time. So, we felt like it made sense to take some early profits,” said Durfee.
The sale included the Littleton property outside of Denver, as well as assets in suburban Phoenix and Minneapolis.
More self-storage buns in the oven
Currently, Wasatch has three operating properties, which include two assets the firm acquired in Albany, NY and Peabody, MA (Boston MSA) and a third property it developed in Murfreesboro, TN located in the Nashville MSA.
The company also has several projects under construction or about to break ground that will open in spring or summer 2019. Those current projects include:
- Federal Way, WA (Seattle MSA) – This new project will feature four, two-story buildings totaling 122,000 net rentable square feet (NRSF).
- Minneapolis-St. Paul MSA – Two suburban projects being developed here include an 83,375 NRSF facility in Inver Grove Heights, as well as a 93,000 NRSF facility in Apple Valley.
- Rochester, MN. – Wasatch is converting a former furniture store into a 58,000 sf NRSF state-of-the art storage facility with exterior RV parking.
- Greater Boston Area – The firm is building a 58,150 NRSF in Ashland that will include additional expansion capability.
- Murfreesboro – The firm is building a 13,500 NRSF phase two expansion at its existing CubeSmart managed facility.
Wasatch tailors each project to fit the parcel and demand in the individual market. Projects have ranged from as small as 50,000 up to 120,000+ NRSF, including both single and multi-story facilities, with an emphasis on creating as much ground-level access as possible.
“We’re not of the opinion that you have to be a three-story, all climate-controlled facility to be a modern, viable project,” said Durfee. “The customer still prefers to have as easy of access to their unit as possible.”
The firm utilizes third party management for all of its facilities, which also gives it more flexibility in building or acquiring assets around the country. In addition to its current projects, the firm also has property under contract in New Jersey, California, New York and Pennsylvania.
That being said, Wasatch is selecting development opportunities in the context of a future exit strategy, which means building projects that fit the criteria for institutional buyers. The firm typically focuses on projects in or around major MSAs, although they also will consider deals in tertiary markets.
“We definitely are more opportunity driven than we are specific market driven,” said Durfee. “That being said, our preference would be to develop more property around projects that we already have.”