VanWest Partners (VanWest), a Denver-based commercial real estate investment company, announces the acquisition of two additional self storage properties for VanWest Storage Fund III (Fund III). In aggregate, the two acquisitions represent 85,595 NRSF and 719 self storage and parking units.
Captain Hook Self Storage, located in Zion, Illinois, joins the existing asset base in the Illinois market purchased through VanWest Storage Funds I and II. The facility is in excellent physical condition and consists of 379 units and 51,680 net rentable square feet. The firm intends to improve the operational performance of the facility by reducing operating expenses and increasing rents, which are currently substantially under market rates.
The second acquisition in Durham, North Carolina, adds 340 units and 33,915 net rentable square feet to Fund III's portfolio. Similar to the acquisition in Illinois, this facility will add economies of scale to VanWest's Fund I and Fund II asset base throughout North Carolina by enabling the firm to amortize fixed operating costs across a larger asset base. the firm expects to create value quickly by bringing customers up to market rates and reducing historical operating expense loads.
The two recent acquisitions are the sixth and seventh for Fund III since launching in April 2022, and they represent the final closings of the year for the Fund. Both deals were sourced off-market and will add immediate value to Fund III as the firm leverages their operational platform to grow net operating income. The facilities will be rebranded to ClearHome Self Storage.
Fund III now includes a total of seven self storage facilities with 2,969 units and 493,890 net rentable square feet, representing $51.2MM in total capitalization deployed.
"We're very pleased with the early performance of the Fund's seven acquisitions made this year. 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. While we have fewer acquisitions in the pipeline than a year ago, we're excited about the assets that we're closing in Q1 of 2023. With conservative leverage and early performance above forecast, Fund III is well positioned to navigate a turbulent environment in the coming quarters."
- Jacob Vanderslice, a principal at VanWest Partners
VanWest Partners anticipates a 2–3-year deployment period for Fund III with targeted returns of 14-16% IRR and a 2X-2.25X investor equity multiple over a seven-year hold.
Fund III succeeds VanWest Storage Funds I and II, with Fund II closing at the end of 2021. Through these Funds and other vehicles, VanWest Partners has acquired or built over 42 self storage facilities, totaling more than 2.5 million square feet and 19,700 units.
About VanWest Partners
VanWest Partners is an opportunistic real estate investment firm specializing in self storage and urban infill repositioning. We target a full range of investment opportunities from development to fully stabilized assets in primary, secondary, and tertiary markets with strong fundamentals and an opportunity to add value through both revenue and expense optimization. Accredited investors are invited to participate in value-add self storage throughout the continental US.