SROA Capital Acquires West Palm Self-Storage Facility for $17 Million

SROA Capital Expands Its Footprint in South Florida with Major Self-Storage Acquisition

In a significant move within the self-storage sector, SROA Capital has acquired its 12th facility in South Florida for a staggering $17.1 million. This purchase marks a remarkable increase in value, as it is 205 times more than the previous sale price nearly half a century ago. The acquisition underscores the growing demand for self-storage solutions in the region, driven by both residential and commercial needs.

The Acquisition Details

The newly acquired facility, located at 1547 North Florida Mango Road, consists of a complex of 18 single-story warehouses. According to records from the real estate database Vizzda, the site spans 10.2 acres and features a total of 136,256 square feet of storage space. The buildings were constructed between 1976 and 1980, showcasing a blend of historical significance and modern utility.

SROA Capital, a West Palm Beach-based real estate investment firm, financed this acquisition through a substantial $65 million cross-collateralized loan from Northwestern Mutual Life Insurance Company. This financial backing highlights the confidence investors have in the self-storage market, particularly in a region experiencing rapid growth.

Historical Context of the Property

The seller of the property, West Palm Beach Mini Stor-It, originally purchased the site in 1977 for just $83,400. This stark contrast in pricing over the decades illustrates the dramatic appreciation in real estate values, particularly in South Florida, where demand for storage solutions has surged in recent years.

SROA Capital: A Leader in Self-Storage

Founded in 2013 by CEO Benjamin Macfarland, along with notable figures such as Sidney Kohl, co-founder of Kohl’s Department Stores, and James Jenkins, co-founder of Alliant, SROA Capital has established itself as a significant player in the self-storage industry. The firm currently owns 650 self-storage facilities across the United States, totaling over 30 million square feet of space. In South Florida alone, SROA Capital operates eight facilities in Palm Beach County and four additional locations in Hollywood, North Miami, Miami, and Key West.

The Self-Storage Market in South Florida

The self-storage market in South Florida is thriving, with an average rental rate of $167 for a 5-foot-by-5-foot unit, making it the second highest in the nation, according to a recent report by StorageCafe. The tri-county area has seen a notable increase in self-storage space, adding 234,522 square feet last year, which represents a 2.7 percent year-over-year growth. Furthermore, developers are projected to complete an additional 348,159 square feet of new self-storage space this year, indicating a robust pipeline of development in response to ongoing demand.

Recent Trends and Transactions

Despite the overall growth in the self-storage sector, the industrial subsector has experienced limited trading activity in the past year. Notable transactions include SmartStop’s acquisition of a North Miami facility for $30.8 million in October and Silver Star Properties’ purchase of a Delray Beach facility for $26.5 million in August. These transactions reflect a strategic focus among investors on self-storage and single-tenant properties, as firms adapt to changing market conditions.

Conclusion

SROA Capital’s recent acquisition of a self-storage facility in South Florida not only highlights the firm’s aggressive expansion strategy but also underscores the broader trends within the self-storage market. As demand continues to rise, driven by both residential and commercial needs, the self-storage sector is poised for further growth. With SROA Capital leading the charge, the future of self-storage in South Florida looks promising, offering both investors and consumers a wealth of opportunities.