Value-add acquisition marks Gelt's opportunistic entry into self-storage property sector:
Gelt Inc., a Los Angeles-based real estate investment and asset management firm, announced today it has acquired Southmark Storage, a 665-unit self-storage facility located in South Pasadena, CA. Built in 1986 and situated on a 1.81-acre site at 919 Mission Street, the six-building property includes 623 indoor storage units and 42 outdoor rental units, a site office and a two-bedroom manager's apartment.
"This is Gelt's first self-storage facility acquisition," said Keith Wasserman, a partner with Gelt, Inc. "We have and continue to be in the multifamily space, however, we are also an opportunistic and entrepreneurial company and identified the intrinsic value in acquiring this particular property and expanding into another stable asset class. Just as we have been successful at adding value to large-scale apartment assets through improving operations, management, making capital improvements and bringing rents to market, we plan on a similar strategy to maximize returns for our investors with this property."
Wasserman noted that Gelt is targeting the acquisition of up to one million square feet of self-storage facilities over the next two years in primary and secondary markets with high barriers to entry, where Gelt has an existing footprint.
Southmark Storage is located in a residential neighborhood adjacent to the South Pasadena Metro Station, with high median home prices and household incomes. Southmark is within a 16-minute drive to Downtown Los Angeles.
The property was 99 percent occupied at the close of escrow. Immediately upon closing, Gelt hired Extra Space Storage, one of the nation's top self-storage property management companies, to streamline operations. Gelt will conduct property improvements including installing new roofs, asphalt, and paint, among other property maintenance. It will also improve signage, property access systems and add a web payment platform for its customers.
Greg Nassir and Edward Matevosian of CBRE represented the seller, Southmark Storage, LLC, a California-based private investor. Gelt was self-represented.
With over 50,000 self-storage facilities across the country, this property type has evolved from an interim property use to a core asset in the commercial real estate industry. Additionally, a surprising 9.4% of American households rent a self-storage space and statistics show that there is seven square feet of self-storage space rented per capita in the U.S. Equity and debt capital invested in this asset class has increased substantially and self-storage has continued to outperform other real estate asset classes during and after the recession. Self-storage returns consistently lead the market and yet have amongst the lowest default rate of all real estate asset classes.
About Gelt, Inc.
Gelt Inc. is a regional real estate investment and asset management company that seeks to acquire properties in strategic markets in the Western U.S. Since the company's inception in 2008, Gelt has acquired more than 9,500 apartment units, RV and mobile home sites, self-storage units and apartment units in development valued in excess of $1.33 billion. The firm's philosophy is to be a prudent steward for its investment capital, to invest wisely, with confidence and intelligence in emerging, constrained markets. Gelt seeks appropriate risk adjusted returns while achieving income from current cash flow and appreciation through superior performance of its assets.
Gelt consists of a team of real estate professionals that possess a wealth of knowledge and expertise in law, real estate, finance, property and asset management, and construction.
Gelt's affiliated companies include Domuso.com and Gelt Venture Capital. Gelt developed Domuso.com, the first financing-as-a-service resident portal for the $540 billion rental payment industry. Domuso offers online certified and financing options for move-in payments, one-time rent payments, debt payments, refunds, and late payments. The company developed its own proprietary risk scoring model to offer point-of-sale financing utilizing rental application data, property operational data, and historical payment history. Gelt Venture Capital is a seed-stage venture capital firm investing in companies capable of making a large global impact. We believe automation, mobility, robotics, artificial intelligence, and space tech form the fundamental technology layer are transforming our world and we focus on applications of these foundational technologies.
The firm strives to stay on top of industry trends and is always on the lookout for new technologies that simplify life for its leasing agents and help its properties run smoothly.