Charlotte-based Morningstar Properties, operator of Morningstar MiniStorage, paid $8.5 million on Monday for a newly-opened 95,000-square-foot self storage facility at the Florida Mall developed by Lake Mary-based developer Flagship Companies Group.
Flagship has 10 more Florida sites planned for entitlements over the next 24 months, and is actively seeking land near under-served population growth, company CEO Ted Bolin told GrowthSpotter.
Located at 1600 Sun Life Path, the 2.3-acre site was one that Flagship began the permitting process on early last year when Morningstar approached to offer a deal at Certificate-of-Occupancy stage.
"So we began to custom-build that for them," Bolin said. "We also agreed to sell them one on Red Bug Lake Road near the Oviedo Town Center Mall, which is under construction now" for 99,000 square feet, and should be delivered in February 2018.
Morningstar is one of many large industrial investors that are aggregating self storage portfolios around the country, and offering developers like Flagship the opportunity to build new assets and sell them at Certificate-of-Occupancy stage, or within just a few years after stabilizing leases near 85 percent.
Flagship is also currently building a 108,000-square-foot self storage facility in Tampa that should be completed in November, and will be kept in its portfolio, he said.
Ten more sites are under contract between Port Orange, Orlando, Tampa and Fort Myers, with plans to entitle, permit and build over the next 24 months, Bolin added.
The company is actively looking for more land opportunities, and is vetting about 30 sites now across the state, Bolin said. It's soft target is 20 new self-storage locations over the next three to four years.
Key metrics in an attractive site for Flagship include the ratio of population to existing self storage supply within a three-mile radius, which should fall below 6.5 square feet per head to signal need.
Flagship established a funding agreement last year with Chicago-based Blue Vista Capital, which entails a venture plan to build 10 new self storage facilities in Florida.
Along with its own equity and that of Blue Vista, Flagship has been financing portions of its new developments with "mini-perm" loans of five years from commercial banks.
Outside the self-storage segment, Flagship is also in the pre-leasing phase for a 28,000-square-foot retail center in Kissimmee at the corner of W192 and Fortune Road, adjacent to Osceola County Heritage Park.
The property is next to a 91,400-square-foot self storage facility that Flagship built and sold to W.P. Cary in August 2015 for $8 million.