“Converting big-box retail into storage — now that’s sexy”

Investors eye vacant stores to convert into warehouses
June 13, 2017 03:00PM

Storage units (Credit: Getty Images)

From TRD New York: As the retail market continues to flounder, investors are eyeing vacant brick and mortar stores as possible future storage centers.

There are more than 50,000 storage facilities in the United States, and construction spending on mini-warehouses hit an all-time high in April, Bloomberg reported. The largest storage operator, Public Storage, took in $538 million in revenue during the first three months of this year, logging only $149 million in operating costs.“These guys are making money hand over fist,” Chuck Gordon, chief executive at SpareFoot, a Texas-based storage startup, told Bloomberg.

Ari Rastegar, of Dallas-based Rastegar Equity Partners, said he’s looking for storage space on the outskirts of big metro areas and looking at buying space retail landlords haven’t been able to fill. “Converting big-box retail into storage — now that’s sexy,” he told Bloomberg.

Self-storage facilities proliferating all over South Florida. Most recently, a development team broke ground in February after landing an $8 million loan to build 113,000 square feet of self-storage space in Miami next to the Palmetto Expressway.

The sponsor of the development is an affiliate of  Florida Value Partners, which Alfonso serves as managing partner in partnership with Benjamin S. Macfarland III of Elit Stor Capital Partners, LLC, a self-storage operating company.

The project is the initial phase of a 280,000-square-foot self-storage development at Miami Airport Center, located at Northwest 25 Street and the Palmetto Expressway. Fully built, it would rank among the largest self-storage facilities in South Florida. [Bloomberg] — Kathryn Brenzel