Forum and Make Space have announced their shared business completed a capital raise of about $54 million to expand its self-storage footprint in Ontario and other markets in Canada.

The closed capital raise units were offered to the public through a syndicate of agents led by CIBC World Markets and included Canaccord Genuity, Desjardins Securities, Richardson Wealth Limited, Wellington-Altus Private Wealth, iA Private Wealth, National Bank Financial and Raymond James. 

Last year, Forum had acquired a 50 per cent interest in Make Space, a 21-year-old, B.C.-based self-storage company, to launch Forum Make Space. At the time, they launched the Forum Make Space Storage Fund (MSSF), a $200 million-plus, open-ended private REIT. In total, Forum Make Space manages over $450 million of self-storage assets with 57 locations in six provinces and more than 2.4 million rentable square feet under management.

The new trust is in the process of indirectly acquiring a cluster of three existing self-storage properties in Ontario. The company said it also plans to acquire one or more additional self-storage businesses elsewhere. 

This latest capital raise is the fifth closed-ended fund the company has raised, said Tate Abols, Forum managing partner, corporate development and private equity. 

The fund will eventually represent $100-125 million in gross asset value, including an initial acquisition of 180,000 square feet of assets in the Belleville-Trenton region. "Then there's capital available to go out and buy assets in the market across Canada," Abols said. 

The partnership between Forum and Make Space is focused on Canadian self-storage, especially within secondary or underserved markets, Abols said. "The team is 70 people deep; we're a vertically-integrated storage (business with) site acquisition, site development, property management (and) technology.”

Smaller Canadian homes require more storage 

"We love self-storage," said Danny Freedman, owner and head of corporate development at Forum Make Space, in an interview. "Self-storage has been a good asset class . . . in Canada and North America and the world for the last 30 years. And in Canada, we're still in sort of the early innings of consolidation."

He said many storage assets are still family-owned and operated, so there is plenty of growth potential for organizations like Forum Make Space. 

"We see the stability of the market," he said, noting the high cost to construct and the challenge of raising capital continue to slow down the expansion of the storage business in Canada. 

The way we live is changing.

"We see . . . smaller housing, increased population. Eighty-two per cent of new (housing) starts in Canada this year are multi-unit or townhomes."

As fewer large houses get built, more people are living in smaller spaces with little room for storage. 

Our homes often lack an extra bedroom, or a garage, or a basement for storage, Freedman said. "But people still like to do stuff. They still ski, still bike; they still hold onto the (baby’s) crib for the next generation. All those things you know that happen in life still happen and . . . that demand is ever-increasing for storage, from what we can see."

Abols said Canada has about 2.5 square feet of self-storage space per capita. "That compares to over eight feet per capita in the U.S."

Moreover, tradespeople and small businesses are among the larger consumers of self-storage space and containers, he added, noting they need secure, safe places to store tools and materials. 

Belleville-Trenton sweet spot for storage growth

Abols said Belleville-Trenton, located along Lake Ontario and the Highway 401 corridor about 100 kms east of the Greater Toronto Area, represents the sort of demographics they're looking for to invest in assets. 

"Affordability is driving a huge amount of demand," he said. "U-Haul ranks those markets as the third and fourth most active (in terms of) people coming into the country, so there's lots of demand in that region."

The priority is seeking assets with larger footprints in secondary markets, suburban cities and markets that seem to lack storage options. 

Make Space specializes in operating facilities with larger footprints that have capacity for storing large vehicles like RVs, or boats.

Forum Make Space is mainly a self-storage manager and offers ancillary services such as container rentals, tire storage, and RV and boat parking space rentals.

Founded in 1996, Forum is an investor, developer and asset manager with assets under management of over $3.1 billion. Forum manages the largest purpose-built student housing fund in the country with over $2.5B in assets, and has over $3 billion in development pipeline across the country.

Forum’s investment focus also includes private equity and infrastructure.