After selling its entire portfolio to Public Storage Inc. last year, Southern Self Storage is back in the game.
The Palm Beach Gardens, FL-based operator recently bought the 64,290-square-foot Village Self Storage facility at 466 County Road in Oxford, FL, for $7.1 million. The 792-unit facility also features 6 acres for RV, boat and vehicle storage. Robert McIntosh and Peter Cowie are the owners of Southern Self Storage.
“We are very pleased to be back in business after our sale to Public last summer,” McIntosh said.
McIntosh and Cowie also own Northern Self Storage, which operates four facilities in Ontario, Canada. In addition, they jointly own four facilities in Boise, ID, with Central Self Storage.
Southern Self Storage sold the 21 facilities it owned in Florida to Public Storage in August for about $240 million. Half of that money went toward eight facilities in Palm Beach County.
McIntosh said his company is using proceeds from the Public Storage deal to finance acquisition and development in Florida and elsewhere.
“We’ll go anywhere in the country, but we know Florida really well,” McIntosh said.
The company plans to add six or seven more facilities to its portfolio by the end of the year, McIntosh said. That means targeting markets where the self-storage REITs aren’t that active.
“In this market, with such low cap rates, we can’t compete with REITs on price,” McIntosh said. “We put offers in and get outbid by REITs constantly.”
McIntosh said Southern Self Storage was able to negotiate exclusively with the owner of Village Self Storage as a result of a longstanding relationship.
An Offer They Couldn’t Refuse
McIntosh said his company was gearing up for expansion before its portfolio was acquired last year. Public Storage first approached Southern Self Storage at a Philadelphia trade show in April 2013. When Public Storage expressed interest in snapping up all of the company’s Florida holdings, McIntosh responded that they weren’t for sale.
“They said, ‘Show us your P&L and you’ll be surprised what we can pay’,” McIntosh said.
It turned out Public Storage was willing to pay about $240 million.
Public Storage invested heavily in the Sunshine State in 2013. The company also acquired the 44-facility portfolio of Deerfield Beach, FL-based Stor-All for $430 million. That deal included 26 facilities in Florida. Like Southern Self Storage, Stor-All is working to rebuild its holdings, starting with a new development in Vinings, GA.