Mini Mall Storage Properties has surpassed $100 million in assets under management in its first year of operation by seeking out and acquiring small operators in what it considers a very “unconsolidated” sector of the self-storage industry.
The company, which is part of the Avenue Living Asset Management Ltd. umbrella, bought its first property in Calgary for $4.8 million in February 2020. The property comprises about 450 units and just under 50,000 square feet of space.
Today, the company controls 7,700 units and 836,000 square feet of space across 26 properties in Alberta, Saskatchewan, Manitoba and Ontario. Mini Mall is also set to acquire its first property in British Columbia, with more to come in 2021.
Adam Villard, CEO of Mini Mall Storage Properties, said the company is poised to continue its growth this year with a goal of eventually reaching up to $400 million to $500 million in AUM.
“At the end of the day, we have been trying to consolidate what we thought was a very unconsolidated portion of the industry, which really is that class-B and -C asset that exists on the fringe of primary markets or in a lot of the secondary markets,” said Villard. “They tend to be individually owned operators, what some might classify as mom and pop.
“We’ve chosen to consolidate that because we felt they’re very strong businesses with great cash flow, strong cash flow, strong balance sheets and really have the ability to still provide us the opportunity to grow.”
Mini Mall Storage Properties’ first year
The $1-million purchase of a property in Prince Albert, Sask., with about 120 units, pushed Mini Mall over the symbolic $100-million mark in January.
The initial acquisition a year ago came via a connection with its Avenue Living parent company. Joe Giuffre Sr., the father of Avenue Living founder and CEO Anthony Giuffre, was the previous owner of the self-storage facility.
Villard said 94-year-old Joe Giuffre had a history of building self-storage properties in both the West and other parts of Canada.
“He was actually the first one to coin the term ‘self-storage’ here in Canada,” said Villard.
The acquisitions during the past year have been made through the Mini Mall Storage Properties Trust, an open-ended mutual fund trust focused on consolidating self-storage assets with strong existing cash flows.
The acquisitions offer opportunities for expense reduction and revenue optimization, according to Villard, with a focus on the class-B and -C assets in markets where the company sees strong growth potential.
“We’ve got a diverse group of investors,” he said. “We don’t have any one majority owner. We have a founders’ group that’s invested over $8 million with friends and family in the fund. The vast majority of the others are a mixed investor group.”
The fund has raised just over $40 million to date.
Growth of the storage industry
Mini Mall Storage Properties is also capitalizing on several converging market trends which are increasing the demand for self-storage units.
People who are downsizing are using the space to store excess belongings. Others, because of lifestyle or economic choices, are living in smaller homes and need somewhere to store their extra stuff.
Those who are renting living spaces also need extra space to accommodate all the possessions that don’t fit into their homes.
The company focuses on three main pillars; consolidating the properties; leveraging the Avenue Living platform and services such as legal, accounting, the investment team and debt markets; and implementing technology into older properties as they are acquired.
“Certainly some of these vendors have brought technology in like automated gates and things like that but if they have not, these are the first things we do,” Villard explained. “We automate the facility. We put in key pads. We allow 24-hour access. We increase the security cameras.
“We increase the overall security of the facility and we implement a software piece that is quite sophisticated and our operational team is very, very strong at operating that software piece to really drive and manage that rent management piece.”
Avenue Living believes the self-storage sector strategically fits the company’s portfolio as the industry has similar characteristics to multifamily housing.
Overall the company has just over $2 billion in AUM, which also includes commercial real estate and agricultural land in Saskatchewan. It has just over 10,000 residential rental units with assets in Alberta, Saskatchewan, Manitoba and the U.S.