Description

Jones Lang LaSalle ("JLL"), as an exclusive advisor, is pleased to offer to qualified investors the opportunity to acquire Colonial Drive Self Storage (the "Property" or "Offering"), a Class A Storage conversion located in Orlando, FL. The Property was converted in 2021 and is comprised of a single two-story building totaling over 100,000 rentable square feet across 1,168 climate-controlled units and 7 non-climate units. Following the 2021 acquisition and transition from third-party management, the facility is currently 26.1% physically occupied. A new owner would have the opportunity to immediately add value through implemeting professional management and improving curb appeal, marketing, and operations to improve occupancy. In addition, ECRIs will allow the new owner to continue increasing revenue after reaching physical stabilization, within a strong market that can support it. All-in-all, the Offering represents an excellent opportunity to acquire a well located self storage facility in a dense market at a discounted price with large value-add upside.

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Attributes

Units

1,175

Rentable Square Feet

100,643

Occupancy

26.1%

Land area gross

1.34 ha

Year built

2021

Media

Investment highlights

SIGNIFICANT REVENUE UPSIDE - The facility was converted in 2021 and has been privately operated since. The buyer has an immediate value-add opportunity to make improvements to the property to enhance overall value. Specific improvements to upgrade the Property include improving curb appeal and specific unit cosmetic upgrades to increase property desirability from a leasing standpoint, and implementing professional management.

SOLID SURROUNDING DEMOGRAPHICS WITH LIMITED COMPETITION AND GROWTH - There is significant opportunity to increase revenue by increasing ERCIs for current in-place tenants and overall occupancy of the facility. A new owner will have excellent upside to continue to increase income month-over-month during the lease-up period through marketing, implementation of third party management, and cosmetic improvements. The subject property is well-positioned within the Orlando market, where current market rents average $1.50 per square foot, compared to the property’s in-place rate of $1.03 per square foot, highlighting a significant mark-tomarket opportunity. The surrounding demographics further support future growth; Within a three-mile radius, the population totals approximately 111,194 with an average household income of $73,310. Expanding to a five-mile radius, the population increases to 324,166 with a higher average household income of $91,619, underscoring the strong demand drivers and continued growth potential within the area.

VALUE-ADD OPPORTUNITY WITH VERY ATTRACTIVE BASIS - The property currently sits at an 26.1% physical occupancy and 36.0% economic occupancy, requiring the new owner to complete physical lease-up with the ability to push rents as well. While currently achieving $1.03 per square foot in a $1.50 market, this pricing gap presents significant upside potential for rent growth, a particularly compelling opportunity given the asset's position as one of the only Class-A self storage properties within a five-mile radius.

RESILIENT ASSET CLASS - The self storage asset class is not as sensitive to macroeconomic downturns as other real estate sectors and has a lower loan delinquency rate. Storage benefits from a wide range of demand drivers including everyday life occurrences such as death, divorce, downsizing, moving, etc. In addition, operators’ ability to adjust rents monthly provides flexibility and protection in shifting economic and interest rate environments. This can also provide an inflation hedge for operators. Public REITs have only seen two years of negative same-store revenue growth since 2003, per GreenStreet. Self storage's resiliency is evidenced by the fact that it has consistently performed well relative to other real estate property types (industrial, multifamily, retail, and office) over the past five, 10 and 15 year periods. Self storage was the only REIT sector to post a positive total return during the Great Financial Crisis and the asset class performed well during the COVID outbreak. Self storage has shown much more favorable trends when it comes to delinquency, outperforming other commercial property types during the recession and into recovery.