SROA Capital announced last week that it has purchased StayLock Storage for an undisclosed sum from two private investment firms based in St. Louis\u2014Cequel III and Thompson Street Capital Partners.<\/p>\n
In the same announcement, SROA Capital disclosed plans to build 500,000 square feet of additional storage space at some of the StayLock sites it just acquired in eight states, including in Battle Creek, MI, Bettendorf, IA and Fort Wayne, IN.<\/p>\n
![\"\"](\"http:\/\/listselfstorage.com\/us\/industry-insights\/wp-content\/uploads\/2021\/08\/SROA_group_photo-660x365.jpg\")
<\/p>\n
\u201cWe\u2019re long-term investors,\u201d says Benjamin S. Macfarland, Founder and CEO of SROA Capital, based in West Palm Beach, FL, and founded in 2013. \u201cWe like secondary and tertiary markets,\u201d he continued.<\/p>\n
With the purchase of the StayLock facilities, which SROA plans to operate under its Storage Rentals of America brand, Macfarland\u2019s said his firm now owns \u201cnearly $2 billion in assets\u201d in 19 states.<\/p>\n
And it expects to add to those assets with plans next year to start a ninth fund, SROA Capital Fund IX, which Macfarland said will hopefully entail raising $500 million from pensions, endowments and other large investors.<\/p>\n
SROA Capital\u2019s long-term goal: To buy or build \u201cseveral hundred more\u201d facilities over coming years.<\/p>\n
As for the StayLock acquisition, Macfarland said some of the new properties overlap with a few of SROA\u2019s existing territories, but they mostly complement and fill out SROA\u2019s current footprint. \u201cIt wasn\u2019t much of a stretch for us operationally,\u201d he said of the geographic locations of the StayLock properties.<\/p>\n
Macfarland said he\u2019s particularly excited about picking up a facility in Iowa, along the Mississippi, where he said large publicly traded real estate investment trusts are not as active.<\/p>\n
Indeed, he said his firm, which employs about 330 people, generally prefers to buy, develop and own facilities in secondary and tertiary markets, as long as properties are profitable and his firm can distribute quarterly returns to investors. \u201cWe haven\u2019t missed a quarterly (payout) since we started,\u201d Macfarland says.<\/p>\n
SROA\u2019s expansion comes as the self storage industry is flooded with new investors determined to take advantage of the sector\u2019s strong performance during the recent economic downturn.<\/p>\n
But Macfarland said he\u2019s not too concerned about new investment players entering the self storage industry, saying many of them may be good at snapping up properties but not necessarily as good at actually operating facilities.<\/p>\n
\u201cIt\u2019s a tough market to aggregate in,\u201d he said. \u201cIt\u2019s not a walk-in-the-park industry, operationally.\u201d<\/p>\n
He said his firm invests heavily in proprietary technologies to make sure facilities are run efficiently and smoothly.<\/p>\n
According to its website, SROA Capital was founded by Macfarland, who has been involved in commercial real estate since 2006, in partnership with Sidney Kohl, co-founder of Kohl\u2019s Department Stores, and James Jenkins, co-founder of Alliant, an owner and operator of affordable housing.<\/p>\n