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Merit Hill Capital Buys 6-Property Compass Self Storage Portfolio in Memphis, TN

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Merit Hill Capital LP, an investment firm launched late last year to pursue self-storage acquisitions and development opportunities, has purchased a six-property Compass Self Storage portfolio from the Amsdell Cos. The facilities serve the Memphis, Tenn., metro area, with three in Tennessee and three just over the Mississippi border. Together, the properties comprise 337,846 square feet in 2,391 units and 297 outdoor parking spaces, according to a press release from Marcus & Millichap, the commercial property-investment firm that brokered the deal.

Constructed between 1983 and 2006, the facilities consist primarily of single-story, drive-up buildings with a mix of traditional and climate-controlled units. Common features across the portfolio include electronic gate access, perimeter fencing and video cameras. The portfolio includes two rentable billboards, a cell tower and “a commercial tenant generating additional revenue,” the release stated.

“The purchaser had the opportunity to enter a new market with scale, and by bringing on a national management company, can continue to improve the value of the assets,” said Charles “Chico” LeClaire, executive managing director of investments in the Marcus & Millichap Denver office, who represented the seller in the transaction, along with Adam Schlosser, first vice president of investments.

LeClaire and Schlosser also procured the buyer. Anne Williams, the Marcus & Millichap broker of record in Mississippi and Tennessee, also assisted in the transaction.

Merit Hill launched a $300 million self-storage fund with private capital in June to pursue single-property and small-portfolio acquisitions in markets with at least 25,000 residents and demonstrating population growth. At the time, the investment firm was reportedly under contract to purchase two properties, with a third in its pipeline. The company is planning to use real estate investment trusts CubeSmart and Extra Space Storage Inc. for its third-party management, though other property-management firms are also under consideration.

Merit Hill is based in Brooklyn, N.Y. The private-capitalization the company received was from an investment firm with approximately $29 billion in assets under management, according to its LinkedIn page.

Compass is the operating brand of Compass Self Storage LLC, an affiliate of the Amsdell Cos., headquartered in Cleveland. The parent company draws its roots from the family-owned construction company founded in 1928. Since its inception, the company has been active in several billions of dollars of real estate ventures, with a primary focus on self-storage. It has owned and operated more than 500 storage centers under various trade names in more than 27 states. It currently owns and operates properties in 15 states.

Founded in 1971, Marcus & Millichap is a commercial property-investment firm with more than 1,700 investment professionals in offices throughout Canada and the United States. The firm closed nearly 9,000 transactions in 2016 with a value of approximately $42.3 billion.

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