Ivanhoé Cambridge has partnered with Safely Store Self Storage, a deal that marks the company’s entry into the U.S. self storage sector. Ivanhoé and Safely Store, alongside another global institutional investor, will initially provide a capital of $400 million in equity to be be used on a national scale in the next few years, with the possibility to scale up the investment further over time.
The partnership will concentrate on assets in first and secondary markets, targeting acquisitions of lease-up projects and undermanaged operational properties, as well as ground-up developments and redevelopments.
According to prepared remarks from Safely Store CEO Tyler Colpini, the self storage sector has all the necessary attributes to be a good investment, such as lower risk and higher return, low capital expenditure and monthly leases that offer a protection against inflation. Despite a decline in rents, there is still demand for self storage development.
The Safely Store platform emerged in 2020 from the partnership between Iron Point Partners and Taylor/Theus Holdings. Both firms were founded in 2007. Iron Point raised $9.3 billion in equity capital commitments as of December 2022 and has an investment portfolio that spans a variety of commercial real estate asset classes. Taylor/Theus develops and acquires self storage properties, with a focus on micro markets with limited existing competition and strong demographics.
2023’s partnerships and deals in the storage sector
The first quarter of 2023 kicked off with Nuveen Real Estate’s investment in the vertically integrated self storage platform MyPlace. One month later, Capital Growth Buchalter launched an affiliate called Capital Growth StoreGuard.
But the biggest deal in the self storage sector at the time closed in April, when Extra Space Storage acquired Life Storage. The transaction was set to create a company with an estimated enterprise value of $47 billion.
The same month, Storage Point Capital and Store Space Self Storage formed a joint venture with the aim of owning 500 facilities across the U.S. At the time, Store Space owned, operated and managed more than 100 properties in 22 states.
