Storing Up Strategic Opportunities
How Consolidation in Self-Storage Drives Growth for Avenue Living
What do self-storage and workforce housing have in common?
At first glance, not much beyond housing personal belongings. But for a strategic manager, like Avenue Living Asset Management, there are similarities that make self-storage facilities an attractive acquisition. And strategic investment is a cornerstone of the Avenue Living philosophy.
We got started in 2006 with the $3 million purchase of 24 residential rental units in Brooks, Alberta, and today, Avenue Living has $1.7 billion in assets under management across its various platforms.
Our success is rooted in discipline and a commitment to a proven formula. Every one of our acquisitions has been strategically identified and carefully integrated into our portfolio. Our first modest investment progressed into similar B and C class residential properties in neighbouring markets, including Saskatchewan and Manitoba, where there was opportunity for consolidation, continued cashflow, and capital improvements. And when we were ready to move to a different asset class — commercial real estate — we looked for the same opportunities
Strategy + Innovation
The self-storage industry is highly fragmented, just as B and C class real estate often is. Facilities across the prairies are often family owned — mom-and-pop operations in the literal sense — lacking professional management, co-ordination, or use of technology. And their benefits are not unlike B and C class residential units, as they offer high occupancy rates, strong cashflow, and opportunities for improvement in their information technology infrastructure.
And key to consolidation, many of these operators are willing to sell. Since its launch in early 2020, Mini Mall Storage Properties (MMSP) has acquired seven facilities with over 1,600 storage units and 250 parking units.
Adam Villard, Co-founder and CEO of MMSP, says “the MMSP fund offers an attractive option for individual owners, many of whom have very little in the way of succession or exit planning from the successful businesses they have built over the years.”
Building on a Proven Model
As we built our portfolio and platform, we realized there were ways to ensure efficiencies across all our acquisitions by providing services we developed in-house. Our operations platform has provided property management, maintenance, customer service, and technological expertise to commercial and residential properties across western Canada. The results of this approach: efficiency and growth.
While self-storage facilities don’t typically use much technology, MMSP facilities already benefit from Avenue Living’s call centre and have added computerized gate access, online payment systems, IP-based cameras, and aesthetic upgrades conventional facilities lack. MMSP facilities also benefit from our management expertise, a vital part of making sure new acquisitions meet the Avenue Living standard.
Villard explains that “having full access to the developed and proven platform of Avenue Living allows MMSP to move into markets that simply would not be available to other organizations. The tools and advantages we have access to out of the gate would not be found in organizations until they have reached a much larger size and scale.”
So, with the combination of ample opportunity for consolidation and the tools and advantages of the company’s existing operations platform, it’s no wonder Avenue Living has been interested in both workforce housing and the self-storage industries.
This article is provided for informational purposes only. It is not intended as investment, financial or other advice. It is not an offer to sell or a solicitation of any offer to buy any securities. Any issuance of securities must be completed in compliance with applicable securities laws, including appropriate prospectus and dealer registration exemptions. This article may contain forward-looking statements. Readers should refer to information contained on our website at www.avenuelivingam.com for additional information regarding forward-looking statements and certain risks associated with them.
