Growth & Income Investing in Self Storage Development and Acquisition
A Vertically Integrated, Full Service Self Storage Development & Acquisition Firm...Welcome to Leitbox,
"We Do Storage Differently"
"WE DO STORAGE DIFFERENTLY"
A Differentiated Approach
We utilize a proprietary algorithm (Leitbox Sitefinder) to identify supply and demand imbalances for self storage investment throughout the United States. Once the void is identified we execute what we believe is the correct strategy for the market identified in order to maximize barriers to entry, position with proximity to targeted demographics, match the architectural symmetry with neighborhood uses, and lastly, to position with convenience and efficiency for a busy customer. We call this "Market Up" execution. By aligning our investment strategy to local storage needs and fundamentals, we "Market Up". "Market Up" can either be 1) a programmatic development wherein we repeat the development of our self storage prototype, 2) a mixed-use development with other uses outside storage integrated into the physical plant, (3) a value-add income-producing acquisition, or lastly, (4) conversion of a retail use. Our founder has been doing retail for 25 years and anchor tenant adaptive re-use for storage is often a fruitful backfill. Not all markets are alike, so, by using a multi-faceted approach to self storage development, we strive to ensure the most important investment criteria remains top of the decision tree : Location, location, location.
Fifth Generation Self Storage
Fifth generation self-storage is defined by three (3) primary factors: design, location, and use. The Design is typically a vertical, 3+ story building with architectural articulation resembling an urban mixed-use project. Architects call it neo-industrial; our team calls it “urban millennial.” Location is probably the most weighted factor within the fifth-generation definition. The site selection process is almost 100% identical to retail anchor-tenant’s site selection criteria (think Wholefoods, Trader Joe's or Target). Use is probably the most exciting criteria. Storage is not always "simply storage" - we typically prefer to introduce what we call high-urban-street-front retail. We do not change the scope of the business plan, as this retail component with our projects is usually about 4% of the total SF. We believe this produces a great looking storefront, generates more jobs, and increases retail sales tax revenue. If we deem the area more appropriate for shared office space, we can execute on this use too. Every project does not warrant mixed use, but if we feel we need to integrate mixed use to secure entitlement approvals for a superior location, Fifth Generation Storage is a niche ability for Leitbox that we intend to launch across the Nation.
Our Development Philosophy
Unlike retail, wherein the physical plant is designed for maximum profit potential, specific to self storage, there is a deficit of repeating design prototypes. Wherein the interiors of almost all Wal-Marts, Dicks Sporting Goods, or Targets are the same, historically self storage has been uniquely designed for every parcel. Whereas retail attempts to duplicate every build with a repeating prototype, in self storage, for the most part, there is very little duplication of design, no repetition of process, and, therefore, no risk mitigation by implementing a recurring development process. We discovered this in 2015 and have never looked back. We believe our success in retail came through repetition of market analysis, repeating architectural design, and recurring sequences of the build. Our goal was to build the same widget in any location, in an effort to mitigate risk, shorten construction time frames, and improve the certainty of on-time and on-budget delivery. We call that Programmatic Development wherein development becomes like a manufacturing process. It's tantamount to bringing a Model T assembly line approach to self storage development.
MIXED USE NICHE CAPABILITY
WHY MIXED USE?
In the past, self-storage has been simply that, storage. Certain amenities, such as conference rooms or office cubicles were often offered. But we are talking about introducing an entirely new use into the physical plant – that’s fifth generation to Leitbox. And this evolution is both better for the community and often required to get the best locations.
MIXED USE ENHANCES SUCCESS RATES IN SECURING ZONING APPROVAL
Think about it. From a political standpoint, why would a mayor or city council approve storage in their premier urban or retail-centric corridors. The facility does not create substantial jobs (usually 2), the facility does not generate significant sales tax revenue (box and locks), and the facility does not produce material impact fees (2 bathrooms!). So, why allow the zoning? Fifth generation storage integrates other uses to overcome this reluctance.
We typically prefer to introduce what we call high-urban-street-front retail. We do not change the scope of the business plan, as this retail component is usually about 4,000 SF in a 90,000 SF building (4% of the total SF). But what it does is produce a great looking storefront, more jobs, and sales tax revenue. If we deem the area more appropriate for shared office space, we execute on this use too.
REDUCTION OF RISK OPPORTUNITY
The secret “profit-kicker” to mixed-use integration is the break-even occupancy benefit. Mixed use will often decrease the risk of the overall investment. We have found, if we lease all 4,000 SF of retail, open and operating on day one, then our break-even occupancy declines on average from 50% occupancy to 35%. The retail lease income is approximately the same amount as 15% of the storage income, and the retail pays 100% of its contractual rent day one; there is no absorption period. So, we realize a lower break-even and, therefore, a greater profit opportunity.
USES WE INTEGRATE
We often get asked what retail uses do you introduce into the storage building? That is determined by the submarket and the other retailers represented in the market. We utilize the same leasing standards we have plemented for the last 25 years with lease guarantees, tenant co-investment in the space buildout, and overall creditworthiness. If the tenant can pass the underwriting test, we welcome users typically spanning various types such as Fedex/UPS stores, coffee & juice shops, professional services and, lastly, health and wellness. We also see a combination of retail showroom with a large storage unit to inventory supplies. Think artisan jewelers or custom home furnishings. The storage facility only needs about 6 parking spaces, so the retailers never have to fight for parking. It’s the perfect combination of a passive use (storage) with an active, customer-heavy use (retail).
Overcoming Zoning Challenges
Many of the better markets, such as areas of Charlotte, Nashville, and Miami have passed new ordinances requiring mixed use integration into self storage to meet newly-adopted master plan overlays. Mixed Use in a self storage format is growing.
We have re-envisioned self storage, modeling our business approach after retail - realizing operational and development efficiencies gained by repetition and duplication
Bill Leitner, Leitbox Storage Partners, LLC
Where we work, Where we build
Locations
We invest throughout the United States with team office locations in seven states.
Recent investment activity spans seven states with a mixture of value add acquisitions, programmatic developments, conversions, and mixed use deployments.
Contact Us
For more information, please contact us:
Owen Mulvaney
Investor Relations, Capital Markets
(404) 290-8441
William (Bill) Leitner
Managing Principal
(205) 268-5324
Sales & Distribution:
Peak Capital Solutions
Brian Conneely
brian@peakcapitalsolutions.com
203-313-9201
Securities offered through Orchard Securities LLC, member FINRA/SIPC. The information contained herein is for informational purposes only and is not an offer or solicitation to purchase any securities.
