South Street Capital, a Chicago-based real estate investment firm, is expanding its acquisition strategy to include self-storage properties in the Midwest and Texas. The company plans to acquire 1 million square feet of storage space in markets including Austin, Texas, as well as Cincinnati, Dallas, Houston, Indianapolis and Minneapolis.
“I view the self-storage asset class as a hedge for if and when the economy slows down or falters. It performed exceptionally well during the last economic downtown,” founder Marc Muinzer told the source.
South Street recently sold a substantial portion of its loft-office and retail portfolio in the Gold Coast, River North and West Loop neighborhoods of Chicago for a total of $50 million, according to the source. The transactions included the sale of a commercial building at 1165 N. Clark for $22.75 million to AIMS Real Estate Investment Group, an affiliate of N.Y.-based Goldman Sachs. South Street has also exited all of its investments in Chicago’s Goose Island neighborhood, the source reported.
“Following the disposition of a number of our real estate holdings in downtown Chicago over the last 12 months, we are eager to accelerate and expand our acquisition pipeline,” Muinzer said. “We are constantly evaluating our portfolio and looking to opportunistically exit niche real estate investment sectors and submarkets when they become overly popular. At the same time, we continually look to redeploy capital into areas that are receiving less attention. With our recent success, South Street Capital is in a position to quickly execute on new acquisition opportunities.”
In addition to its investment in self-storage facilities, South Street plans to purchase 1 million square feet of multi-family, office and retail properties in Chicago, Indianapolis, Los Angeles and Minneapolis as well as Orange County, Calif.
Founded in 2002 and based in Chicago, South Street Capital acquires under-performing assets at a discount-to-replacement cost in high-barrier-to-entry markets, according to its website. It then works to turn the assets into stabilized, cash-flowing properties. The company has acquired, repositioned and sold more than $100 million in real estate assets.