Self Storage Investment Firm VanWest Partners Closes on Ninth Fund Acquisition
VanWest Partners (VanWest), a Denver-based commercial real estate investment company specializing in self storage, announces the ninth self storage acquisition for VanWest Storage Fund III (Fund III). Fund III, which launched in April 2022, now represents over $67 MM in total capitalization, including over 4,300 units and approximately 671,000 net rentable square feet.
The recent acquisition is in Green Bay, WI, and the firm's seventh facility in the Wisconsin market. The facility consists of 823 units and 150,852 net rentable square feet. VanWest aims to improve the operational performance of the facility by reducing operating expenses and increasing rents, which are currently substantially under market rates. The facility will be operated by VanWest's in-house management company, ClearHome Self Storage, and re-branded to ClearHome Self Storage – Green Bay.
Jacob Vanderslice, a principal at VanWest Partners, believes Green Bay is an attractive growth market. "We've been looking for a deal in Green Bay for years, and we're excited about the fundamentals the market offers. The town has historically been overlooked by larger self storage operators, and recent REIT activity tells a great story for continued consolidation of deals that are owned by smaller operators."
Vanderslice continues that the firm expects to see more acquisition opportunities along with an increasingly volatile investing landscape. "We're very pleased with the early performance of the Fund's eight acquisitions closed over the last 13 months. The rest of 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 pricing 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 thrilled with the Fund's asset base and the deals we have in the pipeline in the coming quarters."
Fund III is a $150 MM fund that invites accredited investors to participate in the acquisition of value-add self storage properties throughout the U.S. VanWest 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.
Preceding Fund III, VanWest acquired 23 self storage facilities through Funds I and II. Performance for these funds has exceeded predictions and expectations. As of Q4 2022, Fund I had 14 consecutive quarterly distributions totaling over $6.5 MM to investors, and Fund II has had nine consecutive quarterly distributions totaling over $5M to investors since Q1 of 2021.