Huge Win for Investors — Gelt Venture Partners Sell SouthMark Storage in Pasadena, California

Pasadena, California

RE Business Online

Gelt has closed escrow on the sale of SouthMark Storage in Pasadena, California. South Pasadena marked Gelt’s entry into the self-storage asset class. The property was listed for sale in 2018 by CBRE and marketed as a redevelopment deal. Gelt was approached due to its existing relationship with CBRE, and familiarity with the seller group, from whom we had previously acquired apartments.

Upon carrying out an in-depth analysis of the site, Gelt determined the existing self-storage use had quantified upside in bringing rents to market and improving the condition of the property to cater to a strong local area demographic. Gelt outbid a competitive buyer pool of dozens of investment groups including sophisticated self storage operators. Subsequently, a decision was made to continue existing storage operations and implement our value-add business plan.

As part of the business plan, Gelt hired a best-in-class storage operator on favorable terms, implemented superior revenue management and advertising strategies, optimized unit mix, captured select expansion potential and carried out a focused capex plan which included security upgrades, digital access systems, asphalt improvements, renovation & painting; which helped attract a higher paying tenant base.

As of the end of Year 5 of ownership, NOI had tripled, thereby substantially surpassing the 7-year proforma. The investment generated industry leading returns upon sale in November, 2023 with an equity multiple of 4.5x and a 36% IRR.

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