The Monolith Group LLC, a commercial real estate acquisition and development firm specializing in self-storage, intends to acquire or build up to 50 self-storage facilities during the next five years. The Scottsdale, Ariz.-based company has completed two of nine projects in its pipeline, with a third expected to be sold this week to self-storage real estate investment trust (REIT) Extra Space Storage Inc., according to the source.
The Extra Space project is a certificate-of-occupancy contract expected to close on April 5. The facility at 448 N. Greenfield Road in Mesa, Ariz., comprises 84,118 square feet in 614 units. Construction is on pace to be finished in less than five months, the source reported.
The company’s six remaining projects comprise 621,217 gross square feet in 4,675 units. They include three facilities in Arizona, two in Colorado and one in Nevada. Projects in Mesa and Scottsdale, Ariz., are expected to be complete this year, while the remaining five are on schedule to be complete no later than April 2017, according to the source. Once operational, those assets will be managed by a self-storage REIT.
Although Monolith is vertically integrated with brokerage, construction and development arms under one roof, owner Tony Ardizzone prefers to leave the day-to-day management to established operators. “We can bring our self-storage development to the market at approximately 12 to 18 percent below what market conditions present. The only thing Monolith doesn’t do is manage its facilities,” he told the source. “We knew we couldn’t compete with the big boys; they spend $23 million a year on Google. They are successful at what they are doing. Why reinvent that portion of the wheel?”
As its current projects near completion, Monolith is looking to acquire self-storage properties or enter joint-venture deals in top U.S. Metropolitan Statistical Areas. Ardizzone believes the industry has a five- to seven-year development window in which construction of new facilities will increase. “The industry is experiencing a major deficit in self-storage product coming on the market and lagging behind in class-A product since 2010 to now,” he told the source.
Founded in 2001, Monolith also has dedicated teams working on entitlements and an in-house accountant who monitors asset management and construction, the source reported.
Sources:
- SpareFoot Storage Beat: Monolith Group Targets 50 New Facilities in 5 Years
