19 May Baranof Holdings Makes Big Leap Into Self Storage
By Alex Hassel, Storage.com
Baranof Holdings, a Dallas-based developer, has eight different self storage properties in various levels of development. This is the organization’s first move into the self storage industry.
“Superior fundamentals in the space that are not found in any other property type,” says Andy Hendricks, managing partner at Baranof Holdings, explaining why the company wanted to invest in self storage.
“Large investors and institutions who have identified the storage sector for its performance during the downturn have a high demand for quality infill properties, yet few quality infill properties are available for acquisition as the public REITS rarely sell any properties of quality. The result is a void of quality infill product available for acquisition.”
Baranof Holdings has already started construction on four multi-story self storage facilities. Crow Holdings Capital Real Estate is advising a private equity fund to pay for the buildings.
Baranof Holdings’ 100% climate-controlled Class A facilities already under construction include:
- 11200 Ranch Rd. 620 Self Storage in Austin, Texas. This will be a 601-unit, 91,600-square-foot building located in Northwest Austin. Construction is expected to finish by Q4 of 2016.
- Walden Park Self Storage at 13100 RR 620 in Austin, Texas. The 709-unit, 101,645-square-foot facility will be located in the Northwest Austin/Cedar Park area. Construction is expected to be completed in Q4 of 2016 as well.
- I-84 Self Storage at 6006 NE Holladay, Portland, Ore. Construction on this 868-unit, 115,438-square-foot facility in Northeast Portland is expected to finish in the Q4 of 2016.
- 7901 Glenwood Ave. Self Storage in Raleigh, N.C. With 452 units and 70,104 square feet, the development in Northwest Raleigh is also expected to complete construction by Q4 of 2016.
Baranof Holdings’ has four other 100% climate-controlled Class A facilities in the advanced planning or entitlement phase. These include:
- Interbay Self Storage at 1602 15th Ave. W, Seattle, Wash. This will be a four-story storage facility with 100 subterranean spaces for vehicle storage. The project for the 207,000-square-foot building in the Interbay area is currently finishing the Seattle Entitlement process.
- Fisher’s Landing Self Storage at 2625 SE 165th Ave., Vancouver, Wash. The three-story, 93,300 square foot facility will feature enclosed boat and RV storage. The development is completing the Vancouver Entitlement process and construction is expected to start in Q3 of 2016.
- Capital Blvd Self Storage at 622 Capital Blvd., Raleigh, N.C. With 123,000 square feet, the facility is set to build in the Glenwood South area. The building will use existing terrain to provide first-floor loading on three of the four floors. Construction is also expected to begin in Q3 of 2016.
- Belmont Self Storage at 700 SE Belmont St., Portland, Ore. This facility will be five stories high, 84,000 square feet, and located in Southeast Portland. Construction is expected to start in Q3 of 2016 as well.
A national third-party REIT will manage all of the properties.
“We chose markets and submarkets which have and continue to experience high population growth and concentration,” Hendricks says. “There has been a significant amount of new multi-family [development] delivered to these markets—often at increasingly smaller unit sizes—since 2010, creating new infill pockets of high density that have greater supply and demand characteristics.”
Hendricks adds that Baranof Holdings chose to build a diversified portfolio of quality in-fill assets across the nation and utilize the scale of the public REITS for operations and management. “This has not been without challenges, as each new market requires a new set of consultants, a new city zoning code, new building codes, etc.,” he says.
As anyone in the self storage market knows, even when the demand is there, many cities and neighborhoods aren’t happy with the idea of new storage developments popping up in their area. With eight facilities in the works, Baranof Holdings is no exception. “It has been both challenging and financially costly with plenty of failures and sunk development costs along the way,” says Hendricks.
Still, this is just the beginning for the company.
“We continue to search for quality in-fill development sites in high barrier to entry markets. As the development cycle continues to progress in storage, we feel that developing in the right locations is going to be more important than ever. We will continue to focus on difficult but quality sites rather than any specific quantity, keeping close tabs on the overall market and especially the growing amount of development.”
Baranof Holdings is sponsored by Value Acquisition Fund. Costs for the developments have not yet been released.
Images courtesy of Baranof Holdings.