A $20 million project underway in the Austin, TX, market serves as the springboard for what a real estate startup envisions being a national brand of high-end, for-sale storage condos.
Construction is set to begin in January or February near the Austin suburb of Lakeway on XSpace’s first luxury storage condo project. The location is scheduled to open by early 2021. One-fifth of the condos already are spoken for.
Planting the seeds of growth
Three more XSpace sites are under consideration in the Austin metro area. After establishing XSpace’s foundation in Austin, the Lakeway-based company plans to expand to as many as a dozen projects divided between Texas’ Dallas-Fort Worth and Houston markets, and then eventually nationwide.
XSpace seeks to raise about $50 million from investors and $100 million in debt next year to fuel its growth in Texas.
Tim Manson and Byron Smith, the Australia natives who co-founded XSpace, hope to someday enlarge the XSpace platform to between 50 and 100 locations across the U.S. The brand’s growth “depends on the appetite. We’ll see what the appetite is like,” Smith told the SpareFoot Storage Beat.
The 90,000-square-foot, four-level project near Austin’s popular Lake Travis will feature 106 condos enabling storage of items such as artwork, wine and vintage cars. Condos also can be converted into office or distribution space. Owners of the condos will be able to lease space to tenants.
The XSpace condos will measure anywhere from 300 to 1,500 square feet. Purchase prices will start at $95,000 per unit. Each level will include a kitchen. Restrooms and showers also are part of the design plan.
Aside from the condos, the project will feature a 3,000-square-foot owner’s lounge on the fourth floor that’s decked out with luxury furnishings, high-end electronics, a commercial-grade kitchen, and views of Lake Travis and the Texas Hill Country.
Manson and Smith said they settled on Austin’s Lake Travis area for their initial U.S. location of XSpace because of its attractive demographics, including higher-than-average household incomes; the relative ease in gaining project approvals; and its location in one of the country’s fastest-growing metro areas.
“It’s a whole new product”
Manson and Smith, who now split their time between Austin and the East and West coasts, have developed more than a dozen commercial condos in their native country over the past 15 years.
Manson, whose family is involved in the storage business in Australia, doesn’t view the XSpace concept as a threat to traditional self-storage. Manson compared the XSpace model to buying a high-end residential condo, while he said traditional self-storage is like leasing a typical apartment.
“It’s definitely a product that is an overlap of self-storage, but it’s not a direct competitor. It’s a whole new product,” Manson told the SpareFoot Storage Beat. “There’s no month-to-month leases. There’s no spaces that are tiny — 5×5 or 5×10. The product itself is built in a totally different way, and we don’t have a retail component to the business.”
“We’re not trying to soak up those people who are moving and need a unit for three months,” Manson added. “We have larger units with long-term owners and long-term tenants.”