With a new partner on the team, Columbia, SC-based Taylor/Theus Holdings Inc. aims to grow its self-storage portfolio to 40 to 50 facilities within the next three to five years through ground-up developments and acquisitions.

Steve Moffat recently joined Taylor/Theus as its third partner after serving as director of real estate at Extra Space Storage. During his over six-year tenure at the Salt Lake City, UT-based self-storage REIT, Moffat handled more than $500 million worth of acquisitions of existing and certificate-of-occupancy facilities.

Remaining in Salt Lake City, Moffat will focus on ground-up projects on the West Coast as well as on value-add acquisitions around the country. At this point, Taylor/Theus lacks a West Coast presence.

An example of a Taylor/Theus self-storage project, this one opened in late September in Tampa

In the past 10 years, Taylor/Theus has developed 19 facilities and sold them to Extra Space and the REIT’s partners. The firm entered the self-storage business in 2007. Founders Walter Taylor and Bill Theus remain involved in the company as chairmen, advisers and investors.

Today, the Taylor/Theus portfolio comprises five operating facilities in the Charlotte, NC; Charlottesville, VA; and Orlando and Tampa, FL, markets. Extra Space manages those five facilities, all of which are in the lease-up phase. The properties contain over 4,000 units in more than 400,000 rentable square feet.

Taylor/Theus is gearing up to open four newly developed facilities in South Florida; Atlanta, GA; and Jacksonville, FL. Taylor/Theus also has three development sites under contract in the Atlanta market and two sites under contract in New Jersey, and is hunting for more sites on the East Coast, partner David Ellison said.

Extra Space will manage those facilities, too, as well as all future Taylor/Theus facilities, partner Tyler Colpini said.

Equity from two joint venture partners is helping fuel Taylor/Theus’ growth plans, enabling the company to enlarge its pipeline while limiting recourse on construction financing, Colpini said. He declined to identify the partners or divulge how much equity they’ve contributed.

On a national basis, Taylor/Theus seeks to develop, buy and own institutional-quality storage properties in submarkets with high barriers to entry, limited competition and “compelling demographics,” Colpini said. “You have to be careful to find pockets that haven’t been hit as hard by the new supply,” Moffat added.

Moffat, Colpini and Ellison are keenly aware of the ongoing new-supply dynamic.

“We have seen years of very strong development in the recent cycle within the industry and, as a result, we are certainly beginning to feel the effects of new supply and its downward pressure on market rates,” Ellison said.

“With the increased supply in the storage market, we believe 2020 will see continued softness in terms of rate growth and lease-up timeframes,” he added. “However, we believe that there will still be opportunities to find acquisitions and development deals within select submarkets throughout the country.”

John Egan