Rizk Ventures Launches Self Storage Platform

SpareBox Storage has made its first purchase and secured an acquisition facility of as much as $500 million through JPMorgan Chase Bank.
SpareBox self storage property in Amarillo, Texas. Image courtesy of Rizk Ventures/SpareBox Storage

Rizk Ventures LLC, of New York, has launched SpareBox Storage, a national self storage platform, under the leadership of CEO Steve Treadwell, who most recently was COO of National Storage Affiliates, a publicly traded REIT.

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SpareBox Storage has already closed on its first acquisition, a portfolio of 10 stabilized self storage properties in Amarillo, Texas, totaling 670,000 net rentable square feet and more than 4,000 units, with an 86 percent average occupancy rate. Together, the properties reportedly account for more than a quarter of all self storage space in the Amarillo market.

Steve Treadwell, Founder & CEO, SpareBox Storage. Image courtesy of Rizk Ventures/SpareBox Storage

In addition, SpareBox has secured an acquisition facility of as much as $500 million through JPMorgan Chase Bank. SpareBox’s mission reportedly “is to acquire and build a scalable, national self storage company by focusing on clusters of undervalued assets in smaller markets or in the suburbs of larger markets, delivering operational, technology and marketing solutions.”

Consolidation, not development

In a prepared statement, Tom Rizk, chairman & founder of Rizk Ventures, noted that the self storage market “has very strong fundamentals, a compelling growth profile” and plenty of unconsolidated product, with about 50,000 stand-alone self storage facilities and roughly 30,000 smaller operators. Treadwell added that SpareBox is “involved in a number of discussions with other owner/operators to add quality properties to our portfolio.”

In the property type nationally, “transaction activity remains robust,” according to a market report from Newmark Knight Frank. “Brokers are reporting continued interest and capital flow into the self storage asset class,” the report explains. “The long term, steady cash flow characteristics and performance in dynamic (even recessionary) economic conditions indicate market sentiment that self storage is a safe haven, or a hedge against market turbulence.”

SpareBox self storage portfolio in Amarillo, Texas. Image courtesy of Rizk Ventures/SpareBox Storage

In early July, Commercial Property Executive highlighted five secondary markets where more than 44 million square feet of self storage space was planned or under construction as of May: Augusta, Ga.; Providence, R.I.; Knoxville, Tenn.; Rochester, N.Y.; and Worcester-Springfield, Mass. 

And the previous week, Nathan McElmurry of InSite Property Group laid out some of the possibilities of how the coronavirus pandemic could challenge the self storage sector, which he contended was already overbuilt before COVID-19.