Boardwalk Development Group LLC (BDG), a self-storage acquisition and development company, has launched an $80 million Boardwalk II Strategy that will focus on storage-property acquisitions in secondary and tertiary markets throughout the Southeast. BDG plans to purchase up to 80 “stabilized” self-storage facilities with the intent of operating them as unmanned properties, according to a press release.
The investment strategy will focus on properties “cash-flowing at 8 percent or more annually, located in areas with population growth of at least twice the national average, [and] have an average household income of $70,000 or higher in the one-, three- and five-mile radii,” the release stated.
BDG will implement automated kiosks and Web tools to facilitate unit rentals and payments. The integration of automated technology “will allow these facilities to be completely unmanned,” according to the release. Company officials believe the strategy will enable BDG to “acquire and cost-effectively manage across broader geographies.”
The company’s strategy to invest in secondary and tertiary markets is driven by “Wall Street’s obsession” with self-storage assets similar to those coveted by real estate investment trusts (REITs) within the top 50 U.S. Metropolitan Statistical Areas (MSAs). The focus of other investors on the largest MSAs “has left a hole in the market to acquire numerous stable, cash-flowing, self-storage properties,” CEO Rajen Sheth said. “These terrific, steady-earning, high-margin, low-risk businesses are available in large numbers and at reasonable valuations. [BDG] is excited to be part of this next wave of the self-storage industry’s consolidation.”
The developer launched a $10 million equity-investment fund called Boardwalk Storage Fund I LLC last year, with the intent to purchase $50 million in self-storage properties. The fund will focus on facilities valued at $2 million to $8 million in Alabama, Florida, North Carolina, South Carolina, Tennessee and Virginia.
Headquartered in Johns Creek, Ga., BDG is led by Sheth, who launched the ValueSpace Storage Fund I in 2008. The brand sold in 2015 to SecurCare Self Storage, one of eight participating regional operators of National Storage Affiliates Trust, a self-administered and -managed REIT headquartered in Greenwood, Colo.