As MCSS Self Storage gets ready for another three facilities in Florida, it still sees the market—especially as developers continue to pump condo and apartments out—as a 20-upper-end storage facility market.
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We spoke with MCSS co-owner Jay Massirman about the firm's latest projects: a 77,600 SF CubeSmart self-storage project in Doral at the intersection of Palmetto Expressway and NW 36th Street where some 200,000 vehicles pass daily. It's part of a lineup of three facilities breaking ground now, including in Coconut Grove and Downtown Miami in Brickell.
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Jay says he and his partners (Stephen Garchik, Steve McBride and consultant David Blum), who began the business last year focusing on urban infill high-rent climate controlled facilities, got in early on what he viewed as a dearth of self-storage facilities in urban South Florida cities.
That's been true since the recession, when many of the national public self-storage REITs bugged out of Miami. Jay says it now has 10 projects in the development pipeline and is in talks to acquire another five to seven sites for future projects, including a second Coconut Grove facility and locations near SoLēMia, Sweetwater, Pembroke Pines and Pembroke Park.
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Who's filling these storage units given that a big portion of the condos purchased are investments for out-of-country investors? It's not that they actually live there, right? Not so fast, Jay says. It's not like 10 years ago when condos were purchased, but remained dark with absent owners. He says Brickell (MCSS facility here), the core of Downtown Miami, has transformed.
“When you go there at night, there are baby strollers and there are joggers,” Jay says. “There has been a tremendous demographic shift in Miami where people want to live here and work here.”
And a recent Marcus & Millichap report on the industry in South Florida corroborates the idea that demand is there. Vacancies dropped from 10.2% to 9.5% by last year's end, and the average vacancy is still 130 bps below the national average. And rents are still rising, now at $1.84/SF for climate controlled facilities, with a projected 5% rise this coming year.
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