Year One Of Our Storage Fund

The Real Estate Espresso Podcast

Year One Of Our Storage Fund

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Year One Of Our Storage Fund

Welcome to The Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re talking about the benefits and drawbacks of fund investing. About a year ago, our development company launched its first fund. We’ve been active as a player in the world of storage for some time. When it comes to funding individual projects, we always created a separate exempt market securities offering for each project. Each project required a private placement memorandum. Each one was marketed separately and investors had the opportunity to participate in a single project.

Naturally, it takes a little longer to complete a project when you raise the funds each and every time for each separate project. If, on the other hand, you pool the equity of several projects together in the form of a fund, then you have capital to execute quicker. Now, some investors don’t📝 prefer to invest in funds as a matter of principle. They would rather invest in single projects where it’s easier to perform due diligence on a single project and assure📝 that the project meets their investing criteria.

But as we all know, projections for a project are almost always just a forecast. Reality differs from the forecast in numerous material ways. For example, nobody would have included a pandemic in their business plan. Very few would have forecast the rapid increase in interest rates that we witnessed in 2022 and 2023. I doubt that many would have embedded 25% tariffs on the cost of materials for new construction. So when you invest and are locked into a single project, you have both the benefit and exposure to that single project. Diversification, even within a single asset class, offers the opportunity to smooth out the peaks and valleys associated with a single project.

On today’s show, we’re looking at the first year of progress in our inaugural storage fund. The idea behind the fund is that by investing in an asset fund, you gain the benefit of exposure to several different products within that specific asset class. Now, our storage fund is investing in traditional self storage, boat and RV storage, and industrial storage. The traditional self-storage industry has attracted a lot of institutional investment over the last few years. It’s now to the point where the product in most primary markets is saturated.

Today, the opportunity exists in selected pockets and primary markets, but more importantly, in secondary and tertiary markets. The opportunity also exists in vertical segments like boat and RV storage and industrial storage. In our first year, we’ve made three investments. They are located in Winter Haven, Florida; Houston, Texas; and Grand Junction, Colorado.

We’re on the cusp of completing the Winter Haven industrial storage project, Long Yards, and it’s expected to formally open in the first week of April. The Year Way Storage project in Houston is well into construction, with a formal groundbreaking ceremony set for the first week of March, silver shovels notwithstanding. The Grand Junction project is also shovel ready, and we’re submitting an amendment to the building permit this week with the aim of breaking ground in about eight weeks. We’ve got two more projects in the due diligence pipeline, which all look extremely promising.

Storage is a segment that has received a lot of attention over the past several years. We believe that the storage market is suffering because it’s an event-driven business, with home sales down and people not moving as much. Therefore, storage demand isn’t what it was a couple of years ago. Nevertheless, there are still opportunities in the segment, such as in markets that have a shortage of climate controlled storage, boat and RV storage and industrial storage. Our aim is to fill those gaps in the market where there’s a sustained mismatch between demand and supply.

If you’re an accredited investor, we are still raising capital for upcoming projects within the fund. Investment would of course be by prospectus only and in compliance with SEC regulations. This podcast is not a solicitation for investment. The process for investing in our offerings is to register for our investor portal, which will give you access to additional information about the offerings, including the offering memorandum, the executive summary, due diligence items, and investor questionnaire that we use to determine whether the offering is appropriate for you as an investor. To find out more, visit our website at ystreamcapital.com or click on the link in the show notes associated with this episode.

It will take you directly to the YSTREAMCapital investor portal, where you can create an account. Don’t worry, we won’t spam you. If you already have an account, simply login with your existing credentials. If you need a password reset, you can easily do that too. From there, you’ll be able to see our projects that are active across nine states. Not all of these are open for investment; currently, we only have three projects open for investment. As always, these projects are open to accredited investors only, in compliance with SEC regulations.

As you think about all this, have an awesome rest of your day. Go make great things happen. We’ll talk to you again tomorrow.

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