Huntsville-based Triad Properties Corporation (“Triad”) has commenced the development of a new state-of-the-art self-storage facility on Memorial Parkway SW, in close proximity to the Super Wal-Mart. Branded as “CubeSmart,” the project is planned for completion during the 1st quarter of 2016. The development will consist of approximately 58,000 square feet of varying unit sizes of climate controlled and standard storage units located on a 5.35 acre site. In addition, the $5.0 million project will include 46 recreational vehicle and boat parking spaces and a sales office facility.
Because more than 80% of the 48,500 self-storage properties in the US are owned by individuals or small investors, self-storage is the most fragmented of commercial property sectors. We believe the fragmented nature of this sector offers Triad and its investors a significant opportunity to build and exit an institutional quality self-storage platform through the development of new properties over a 3-5 year horizon.
Although the self-storage industry continues to be dominated by small independent owners, favorable market supply-demand metrics have led to a marked increase in institutional ownership. Today real estate investment trusts, university endowments, pension funds and private equity funds have identified and invested in self-storage properties. Institutional investment, increased demand being generated by market recovery, retirement of baby boomers, deferral of house ownership by the Millennials, and minimal new development has fueled consolidations in the sector.
This self-storage industry consolidation trend has become evident as the public REITs and large private operators continue to buy independently owned facilities while new developments remain scarce. Consequently, fragmented ownership will become more homogenous as industry consolidations occur, institutional ownership increases, and the sector capital markets become more efficient.
According to Triad Principal Shannon, “We have aligned our strategy with CubeSmart, our institutional facility management “partner. We expect that the transition of fragmented to institutional ownership will allow us to generate superior returns for our investors. We plan to selectively develop a geographically diversified, institutional quality, nationally branded portfolio of self-storage properties. At the opportune time, we will capitalize on this consolidation trend by selling the properties via a merger, exchange or sale to an institutional owner.”
As the industry has evolved, institutional quality properties have become more “retail oriented” with sales offices designed to be architecturally attractive, and with well-lit sites that provide amenities including security systems and controlled access. Furthermore, many new projects being located on major thoroughfares, in close proximity to up-scale neighborhoods.
Boasting a traffic count of approximately 26,000 cars per day, Triad’s strategically positioned CubeSmart site provides retail appeal by offering high visibility and convenient access. The site has many additional attributes that will contribute to its retail appeal. CubeSmart will be adjacent to a super Walmart, has direct access to Redstone Arsenal, is located in an area projected to have an increasing number of new housing starts, and is in close proximity to the new $60 million Grissom campus.
Over the last several years, the internet and smart phones have transformed how prospective renters interact and select a storage location. Much of the recent growth in the self-storage sector can be attributed to the national owners’ increased technological sophistication, economies of scale and advanced revenue management systems. As a result, the larger, more sophisticated self-storage companies capture the vast majority of internet based inquiries.
Triad has entered into a Facility Management Agreement with CubeSmart. CubeSmart will manage and lease Triad’s CubeSmart Huntsville project. CubeSmart is a publically traded self-storage real estate investment company (REIT) and is the fourth largest owner and operator of self-storage facilities in the United States. CubeSmart has developed a highly effective internet marketing and customer administration platform. In addition, CubeSmart operates a 24/7 call center. By branding the project as a CubeSmart facility and by having CubeSmart as the facility manager, the Project will gain competitive advantage through its access to CubeSmart’s internet platform, call center, economies of scale, and industry expertise.
The facility will be designed in a fortress layout to control cost, security and access. For monitoring and cost control purposes, the facility will have a main entry point with a keypad entry, a computer access controlled door. High quality lighting and security systems will be incorporated. The buildings will be situated to provide maximum exposure with a retail orientation to focus on curb appeal, maximum exposure, and convenient access. Additional revenue generated from the facility will include box, lock, and insurance sales.
Shannon concluded, “CubeSmart offers us indepth industry experience, innovative solutions and unparalleled service. As we commence the development of CubeSmart Huntsville, we are performing due diligence on potential developments in Savannah and Charlotte. We are exceptionally excited about our new relationship with CubeSmart.”
CubeSmart is a self-administered and self-managed real estate investment trust. CubeSmart owns or manages 611 self-storage facilities across the United States. According to the 2015 Self Storage Almanac, CubeSmart is one of the top four owners and operators of self-storage facilities in the U.S.
The Company’s mission is to simplify the organizational and logistical challenges created by the many life events and business needs of its Customers — through innovative solutions, unparalleled service, and genuine care. The Company’s self-storage facilities are designed to offer affordable, easily accessible, secure, and, in most locations, climate-controlled storage space for residential and commercial customers. For more information about business and personal storage or to learn more about the Company and find a nearby storage facility, visit www.CubeSmart.com or call CubeSmart toll free at 800-800-1717.
CubeSmart Management currently provides all-inclusive third-party self-storage property management services for 173 locations across the United States. To learn more about CubeSmart Management third-party self-storage property management services, visit www.CubeSmart.com/manager or call one of CubeSmart’s knowledgeable experts at 877-245-1614.
About Triad Properties Corporation
Triad was established in 1993 as a real estate operating company to offer confidential real estate acquisition, development, equity and debt financing, asset management, property management, and leasing services to a select group of private investors, financial institutions and institutional clients. In 1994, Triad principals formed TPH as an entity to own directly and indirectly the interests in the limited liability companies, partnerships and the real estate assets sourced and managed by Triad.
Since 1994, the operations of Triad and TPH have expanded from Huntsville, Alabama to areas such as Atlanta, Dallas, Tulsa, Nashville, Memphis, and South Florida with acquisitions and development in office and industrial products exceeding 8.3 million square feet. The combined track record of Triad and TPH includes more than 20 joint-ventured projects with Trammell Crow Company, as well as real estate transactions with various domestic pension fund advisors, REIT’s, institutions endowment funds, and local investors. Today, Triad Properties Corporation is a multi-disciplined, commercial real estate operating and investment company that offers value-added acquisition, development, management and brokerage services. Triad specializes in opportunistic acquisitions, on-schedule/on-budget developments, proactive management, aggressive leasing and effective disposition of commercial real estate. This extensive track record and broad knowledge of real estate markets provides the ownership with a distinct competitive edge.