Storage Vault has further solidified its position as Canada’s largest self-storage owner and operator with its recent acquisition of the 38-property Real Storage portfolio controlled by a Toronto investment management company.

The $204 million purchase ($275 million in Canadian dollars) of Real Storage is just the latest acquisition by Storage Vault, which has now completed about $740 million ($1 billion Canadian) in takeover deals over the past four years.

Steve Scott, chief executive of the publicly traded Storage Vault, said he envisions more acquisitions down the road, though he acknowledged that competition for prime self-storage facilities in Canada has grown more fierce in recent years, largely due to U.S. companies entering the Canadian market.

“It’s become more difficult to buy in some places,” said Scott, whose company now owns 150 self-storage facilities and manages an additional 50 properties across Canada. “We’ll definitely continue to grow, but I don’t see the same type of opportunities out there right now.”

U.S. firms crossing the border

Michael Boorstein, a principal at MJ Partners Self-Storage Group in Chicago, said U.S. companies have clearly discovered the Canadian market in recent years.

Among U.S. firms now operating up north are StorageMart and Public Storage, the second and third largest storage operators in Canada, after Storage Vault. Meanwhile, California’s SmartStop Asset Management LLP is currently developing as many as 20 facilities in Canada, Boorstein says.

“There’s definitely a play there because there’s so little supply per capita in Canada, and a lot of people are showing interest in going there as a result,” said Boorstein. (The U.S. has roughly twice as many storage facilities per capita than Canada, according to industry data.)

Boorstein noted that the Toronto-based Storage Vault, as a result of recent purchases, is starting to gain more notice in the U.S. as a formidable self-storage player in North America.

As for Scott, he said he doesn’t see Storage Vault venturing south into the U.S. market – ‘’unless we see something special.”

King in the North

A Storage Vault owned facility in Canada, operating under the Access Storage brand name.

Instead, Storage Vault plans to remain focused on Canada and stick to its strategy of expanding via managing properties first and then possibly buying them later from owners. If all goes well, Scott said he can see Storage Vault owning and operating anywhere from 230 to 250 facilities in coming years. The company operates facilities under various regional brand names including Access Storage, Depotium Mini-Entrepots, Sentinel Storage and Storage For Your Life.

Storage Vault’s largest acquisition of late was its purchase of 24 Sentinel Self-Storage facilities in 2017, for $294 million ($396 million Canadian).

It struck again last month with its takeover of the Real Storage portfolio, which was more than 40 percent controlled by Toronto’s Wilmington Capital Management. An executive at Wilmington declined to talk on the record.

The Real Storage purchase may have been bigger in terms of the number of facilities, but the Sentinel acquisition was more valued due to the size of that portfolio’s individual facilities, Scott said.

As above, so below

In a way, Canada’s storage market has mirrored the U.S. market in terms of transforming from a once mom-and-pop dominated sector into a more mature industry – with an increasing number of modern multi-story facilities owned by large companies, according to industry experts.

Not surprisingly, most self-storage activity in Canada is taking place in the country’s major metropolitan areas, such as in and around Toronto, Montreal, Vancouver, Calgary, Edmonton and Ottawa.

If anything, Scott said he’s starting to see evidence of overbuilding in some markets, such as in Toronto and Vancouver. “It’s creeping up,” he said of new supplies coming online.

As for the future of the Canadian storage market, Scott said he’s optimistic. “It’s been a good business to be in, as it has been in the U.S.”

Jay Fitzgerald