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Investment Firm VanWest Partners Launches Self-Storage Funds to Pursue Acquisitions

Article-Investment Firm VanWest Partners Launches Self-Storage Funds to Pursue Acquisitions

Update 12/13/22 – VanWest has acquired two self-storage facilities in Illinois and North Carolina through Fund III in separate off-market deals. Capt’n Hook’s Self Storage at 4242 IL-173 in Zion, Illinois, comprises 51,680 rentable square feet in 379 units, while 10 Federal Self Storage at 2542 S. Alston Ave. in Durham, North Carolina, encompasses 33,915 rentable square feet in 340 units. Both properties offer upside through expense reduction and rental-rate increases, according to the source. They’ll be rebranded under the ClearHome Self Storage name.

Since April, Fund III has closed on seven self-storage properties for about $51.2 million. Together, the facilities offer 493,890 rentable square feet in 2,969 units. No further acquisitions are expected this year, though additional purchases are likely during the first quarter of 2023, the release stated.

“We’re very pleased with the early performance of the fund’s seven acquisitions made this year,” Vanderslice said. “2023 will be a transformational time in the real estate investing space. The years of irrational exuberance are coming to an end. While we expect to see more attractive acquisition opportunities than we’ve seen for years, now is also a time for increased caution and conservatism given the uncertainty that lies ahead. Good deals are not enough in 2023; they must be great deals.”

10/24/22 – VanWest has acquired a two-property self-storage portfolio in Tulsa, Oklahoma, through Fund III in an off-market deal. Together, the facilities comprise about 950 units. Admiral Mini Storage at 8950 E. Admiral Place encompasses 32,600 square feet, while I-44 Mini Storage at 2141 S. 92nd E. Ave. offers 108,290 square feet. The company intends to renovate both properties, adding new gates and security cameras, replacing doors, and making roof and asphalt repairs.

“We’ve been looking for acquisition opportunities in Tulsa the last few years. We believe it’s a solid market that has been relatively overlooked by other self-storage operators, and we’re excited to add these two [properties] to our existing asset base,” Vanderslice said.

Since April, Fund III has closed on five self-storage properties for about $41 million, according to a press release. A $9.2 million round of acquisitions is expected to close in November. It’s expected to include a facility in Illinois and one in North Carolina. Together, the targeted properties comprise 82,000 rentable square feet in 700 units.

“While the consumer demand for self-storage remains high, we remain hyper-selective on the deals that we’re buying given the rapidly changing market conditions,” Vanderslice said. “We expect our total capital deployment for 2022 to be about half of what it was in 2021. We only buy deals that we are extremely confident in, and we simply haven’t found much this year that meets our risk-adjusted return targets.”

9/20/22 – VanWest has acquired three self-storage properties through Fund III for $26 million. Together, the facilities comprise about 300,000 rentable square feet in 2,000 units, according to a press release.

“We are pleased with the performance of the fund’s initial acquisitions,” Vanderslice said. “The net income and occupancy growth are already well above forecasted assumptions as the consumer demand for self-storage continues to be high. The capital markets and the acquisition environment are dynamic right now, and we remain highly selective in the assets that Fund III will continue to acquire.”

Another round of acquisitions is expected to close during the third quarter. It’s expected to include a facility in Michigan and two properties in Oklahoma.

6/8/22 – VanWest has launched its third fund, VanWest Self Storage Fund III, to pursue self-storage acquisitions across the United States. The new fund intends to raise $150 million from accredited individual and institutional investors, with a targeted capitalization of about $425 million in assets, according to a source. It’ll target existing facilities that offer value-add opportunities through renovations, expansion and operational improvements.

The minimum investment is $100,000, with an anticipated internal rate of return of 14% to 16%. The target hold period of purchased properties is about six to eight years, perhaps longer, the source reported.

7/21/21 – VanWest has acquired a two-property self-storage portfolio in Hickory and Shelby, North Carolina, through Fund II. Together, the facilities comprise 219,000 net rentable square feet in 1,570 units, including 127 boat/RV-storage spaces. The facilities will be rebranded under the company’s ClearHome management platform, according to a press release.

“The North Carolina portfolio adds diversity and depth to the Fund II portfolio, and complements our existing North Carolina locations by enabling us to spread fixed operating expenses across a larger, more geographically concentrated asset base,” Vanderslice said. “We’re thrilled to join the Shelby and Hickory business communities, and look forward to serving our customer base as we rebrand and improve the facilities.”

The company has now acquired nine storage facilities and deployed nearly $50 million in gross capitalization since launching Fund II in January. With the latest purchase, VanWest owns self-storage properties in 12 metropolitan markets in eight states. It expects to close on additional acquisitions in Florida and Illinois during the third quarter, the release stated.

4/7/21 – VanWest has acquired a five-property self-storage portfolio in Michigan through Fund II. Two of the facilities are in Greater Detroit, and three are in the Grand Rapids market. Together, the properties comprise more than 265,000 net rentable square feet in 1,628 units, including 232 boat/RV spaces. The facilities will be rebranded under the company’s ClearHome management platform, according to a press release.

“We're excited to add the Michigan portfolio to Fund II, and we look forward to acquiring additional facilities in the Grand Rapids and Detroit markets,” Vanderslice said. “The geographic concentration of the portfolio compliments our other Midwest markets nicely and positions Fund II to further benefit from the economies of scale that a large, diverse portfolio offers.”

So far this year, VanWest has acquired seven storage facilities for about $30 million. The company and its affiliates have now invested in 30 self-storage projects comprising more than 1.5 million net rentable square feet in more than 12,000 units.

1/18/21 – VanWest has launched a second fund, VanWest Self Storage Fund II LLC, to pursue value-add self-storage acquisitions across the United States. Fund I closed in August with approximately $30 million in assets acquired in Florida, Illinois, North Carolina and Tennessee, according to a press release.

“Our latest opportunity is a continuation of our fund strategy—reliable income with capital appreciation and geographic diversification,” Vanderslice said. “Our asset base in Fund I navigated the challenges of 2020 and ended the year with positive [net operating income] and occupancy growth. We believe this reinforces the fact that self-storage is a defensible asset class, especially during times of uncertainty.”

VanWest and its affiliates have now invested in 25 self-storage projects comprising more than 1.25 million net rentable square feet in more than 11,000 units.

8/22/19 – VanWest Partners, an investment firm specializing in residential and commercial real estate acquisition, management and sales, has formed VanWest Storage Fund I LLC with the acquisition of two self-storage facilities in Mary Esther and Pensacola, Fla. The fund’s primary focus is creating and maintaining investor wealth through local, alternative investments in self-storage real estate, according to a press release.

“We create value for investors and partners by acquiring undermanaged self-storage facilities, rebranding the facility, optimizing expenses and driving revenue growth,” said Jacob Vanderslice, managing partner of VanWest Partners.

VanWest intends to use the fund to acquire up to 12 self-storage facilities comprising about 400,000 net rentable square feet before closing the fund next year. Vanderslice expects the fund to have a $30 million capitalization comprised of $20 million in debt and $10 million in equity, he told the source. As of June 28, it had collected about $1.65 million in equity from 10 investors, according to a filing with the Securities and Exchange Commission.

The company purchased Florosa Self Storage at 2371 W. Highway 98 in Mary Esther and American Mini Self Storage at 801 S. Old Corry Field Road in Pensacola. Together, they comprise more than 85,000 square feet. VanWest plans to upgrade the sites with new technology and a new property-management platform.

The fund is pursuing facilities in the Midwest and Southeast with a minimum of 25,000 net rentable square feet and occupancy rates of at least 50 percent. Fund-owned facilities will be branded as ClearHome Self Storage, a management platform wholly owned by VanWest. Prior to the fund, the company owned five self-storage assets, the source reported.

“With a surge in new-supply deliveries peaking soon in markets like Portland, Nashville, Orlando and Seattle, we believe certain markets will loosen up and create acquisition opportunities in the next few years,” Vanderslice told the source.

The fund provides an investment opportunity that combines income, principal investment growth and elements of capital preservation, the release stated. Once it closes, VanWest will launch a second fund also aimed at self-storage investment, Vanderslice told the source.

VanWest Partners and its affiliates have invested more than $195 million in real estate, including 13 self-storage projects totaling more than 765,000 rentable square feet. These comprise multi-story ground-up developments, adaptive reuse and value-add to existing sites.

PR Newswire, VanWest Partners Closes the Sixth and Seventh Acquisitions for Fund III
PR Newswire, VanWest Partners Closes on Fourth and Fifth Fund III Acquisitions
PR Newswire, VanWest Partners Launches Third Self Storage Investment Fund
Benzinga, VanWest Launching Its Third Self-Storage Fund
Johnson City Press, VanWest Partners Acquires Two Properties for Second Self Storage Fund
PR Newswire, VanWest Partners Acquires Five Property Portfolio in Michigan
PR Newswire, VanWest Partners Launches Second Self Storage Fund
SpareFoot Storage Beat, $30 Million Investment Fund Targets 10 to 12 Self-Storage Acquisitions
Yahoo Finance, VanWest Partners Launches Self Storage Fund with Two Acquisitions

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