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Spartan Investment Group Launches $150M Self-Storage Acquisition Fund

July 6, 2022

3 Min Read
Spartan Investment Group Launches $150M Self-Storage Acquisition Fund

Update 7/6/22 – Spartan has made its first acquisition under Spartan Storage Fund 1. The facility at 400 McClotter Blvd. in Havelock, North Carolina, contains 27 buildings encompassing nearly 200,000 square feet of self-storage in 1,528 units. Currently at 95 percent occupancy, it’s been branded as FreeUp Storage Havelock. The purchase provides further opportunities for operational economies of scale as the firm pursues future acquisitions in the Southeast, according to a press release.

“As the first acquisition under our new fund, and our largest one to date as a company, we’re positioned for further growth and success—fueled by our dedicated group of active investors and unprecedented interest from prospective self-storage investors,” said CEO Scott Lewis. “The Havelock region is growing substantially, and this acquisition allows us to bring economies of scale to the property at a time when demand is sure to continue to increase in the coming years.”

4/15/22 – Spartan Investment Group LLC, a self-storage development, property-management and real estate firm that operates the FreeUp Storage brand, has launched Spartan Storage Fund 1, a $150 million investment vehicle that seeks to acquire underperforming self-storage properties in secondary and tertiary U.S. markets. Fund 1 is open to accredited investors, with a required minimum investment of $50,000.

Spartan favors self-storage assets with more than 40,000 rentable square feet. The fund will look for positive-cash-flow properties with room to expand as well as those in need of renovations and improved operational strategies, according to the company website.

“The self-storage industry has been experiencing significant growth over the last couple of years, supercharged by the pandemic, and captured the attention of investors who want to diversify their portfolio,” said CEO Scott Lewis in a press release.

In addition to returns from new acquisitions, participating investors will be able to benefit from the average return across the more than 60 self-storage assets already in the Spartan portfolio. The fund is split 70/30 in favor of investors, with a targeted cash-on-cash return of 15% to 20%. Tax benefits of investing in the fund will be the same as a single-asset investment, the release stated.

“The fund isn’t changing how we invest in self-storage real estate. It’s providing a more efficient vehicle with a better experience and potentially stronger returns for our investors that will allow our team to do what we do best, better,” said Ryan Gibson, chief investment officer.

Spartan invested more than $200 million last year to acquire 38 facilities. In November, officials indicated the company intended to invest another $500 million in self-storage assets this year as part of its goal to amass a $1 billion portfolio.

Founded in 2014 and based in Golden, Colorado, Spartan syndicates investor capital to develop real estate. Its network of more than 5,000 investors has raised more than $140 million to amass its self-storage portfolio across 10 states. The company also has interests in luxury condos and RV parks.

Sources:
Spartan Investment Group, Spartan Storage Fund 1
Yahoo Finance, Spartan Investment Group Launches New Self-Storage Fund — Offering Individuals Access to Inflation-Resistant Asset Class

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