VanWest Partners, a Denver-based commercial real estate investment company, announces the launch of a third fund, VanWest Storage Fund III (Fund III), targeting the acquisition of self storage facilities throughout the continental United States.
The Fund intends to raise $150 million in equity from accredited individuals and institutional investors to acquire self storage properties where an opportunity exists to add value. Fund III will be taking an entrepreneurial approach to acquisitions with a wider variety of deal types specifically targeting existing facilities with strong physical occupancy but are undermanaged, new construction deals that have not yet started leasing, new construction deals that have suffered from insufficient capitalization or have low existing occupancy, and existing facilities that have the opportunity for expansion.
Fund III has closed on three acquisitions representing just over $30,000,000 in total capitalization. "We are pleased with the performance of the Fund's initial acquisitions," says Jacob Vanderslice, Principal at VanWest Partners. "The net income and occupancy growth are already well above forecasted assumptions as the consumer demand for self storage continues to be high. The capital markets and the acquisition environment are dynamic right now, and we remain highly selective in the assets that Fund III will continue to acquire," Vanderslice shares. Targeted returns for Fund III investors are 14-16% IRR, and a 2X-2.25X investor equity multiple over a seven-year hold.
The next round of acquisitions is scheduled to close in Q3 and include one property in Michigan and two properties in Oklahoma. In aggregate, the three acquisitions will represent nearly 300,000 net rentable square feet, 2,000 units, and $26,000,000 in total cost. Pending sourcing suitable acquisition opportunities, VanWest Partners anticipates a 2–3-year deployment period for Fund III.
Fund III succeeds VanWest Storage Funds I and II, with Fund II closing at the end of 2021. Through these Funds and other vehicles, VanWest Partners has acquired over 40 properties, totaling more than 2.5 million square feet and 19,000 units, with total capital deployment of $240 million.