Merit Hill Capital Launches $300 Million Self-Storage Fund

Merit Hill Capital LP, an investment firm launched late last year to pursue self-storage acquisitions and development opportunities, is under contract to purchase two properties, with a third in its pipeline. The company is bolstered by $300 million in equity from a private investment firm, according to a description on its LinkedIn page.

Launched by CEO Liz Raun Schlesinger, Merit Hill intends to pursue single-property and small-portfolio acquisitions in markets with at least 25,000 residents and demonstrating population growth, the source reported. The company will pursue opportunities in Canada and the United States, targeting assets with the potential for investment returns through rate and occupancy increases, expansion projects, and new management, Schlesinger said.

“We’re typically not the group that’s doing the big transaction of the year,” she told the source.

Though Merit Hill plans to use real estate investment trusts (REITs) CubeSmart and Extra Space Storage Inc. for its third-party management, other property-management firms will be under consideration, according to Schlesinger, who was previously managing director in charge of self-storage investments for W. P. Carey Inc., a global net-lease REIT that owns 211 self-storage facilities in 29 states.

During her time at W. P. Carey, Schlesinger co-founded the REIT’s self-storage platform and was responsible for 76 self-storage transactions representing investments of more than $1 billion, the source reported. She formed Merit Hill with a five-member team who worked together at W. P. Carey.

The investment firm plans to build a self-storage portfolio with the intent to sell it, Schlesinger told the source. “We’re a unique group in that we’ve been in the sector for a really long time, and we have one of the best track records out there and a very strong reputation for doing what we’re doing,” she said. “We’re really excited, honestly, to all be together and doing this on our own. We’re hopeful about the opportunities in the industry, but cautious, given the amount of capital that’s flooded the industry and the operating performance relative to supply coming online.”

Merit Hill is based in Brooklyn, N.Y. The private capitalization the company received was from an investment firm with approximately $29 billion in assets under management, according to the LinkedIn description.