Ryan Smith is enthusiastic about Elevation Capital Group’s latest property purchase, made as part of ECG’s Fund 8 and brimming with promise.
The Orlando, FL-based company acquired Oakville Self Storage, which is located at 405 Swann Ave. in the Potomac Yard neighborhood of Alexandria, VA. It’s Fund 8’s second buy and gives ECG a larger footprint in the Washington, D.C. area.
“The property is north of 100,000 square feet and more than 1,000 units, and we are investing more than $5 million into upgrades and renovations,” said Smith, 42. “It’ll be a state-of-the-art facility, one of the better locations in one of the better markets.”
Fund 8 also includes a mobile home park in D.C., two self-storage facilities in Las Vegas, NV and storage sites in Dallas and D.C. Fund 8 has raised about $70 million so far; $50,000 is the minimum requirement. ECG has started eight investment funds since 2013.
Smith is one of the company’s three principals along with his wife, Jamie, and colleague Brian Dahn, who’s also president of Dahn Corp. Ryan Smith has 15-plus years of business experience in market evaluation, property analysis, management systems, due diligence, finance and more. ECG co-manages multiple investment funds that specialize in investing in manufactured home communities (MHCs), and participates in the ownership and/or management of over 20,000 MHC lots.
We chatted with Ryan Smith about the company and industry.
How is the changing economic mood affecting fundraising? Are you receiving more interest because of self-storage’s status as a recession-resistant investment?
Ryan Smith: On the economic mood, internally we’ve noticed a slight uptick in interest in conversations I’ve had with prospective investors. More investors are growing disenfranchised with public markets and their volatility. They’re seeking alternatives, such as real estate. Within real estate, a lot of investors are interested in self-storage and Manufactured Housing Communities. Those two areas have done well historically, so investors are interested in one, the other or both.
What makes the Potomac Yard property a good match for your portfolio?
One of the higher-priority items, when we’re looking to acquire a new property, is the market. Alexandria could not be better located. There was a lot of opportunity to add value to the asset, and we really like its location in the market.
Have you noticed any slowdowns in your existing portfolios?
We haven’t. We expect at some point for growth to slow, because growth has been extraordinarily high in the last couple of years. We haven’t seen any material reduction in growth. Both markets for self-storage and MHC have been extraordinary. We do expect it to slow, but we haven’t seen any slowdown yet.
How have your first seven funds performed?
Most of them continue to operate. They’re not closed. They’re all doing well and doing what they should be doing. We’ve acquired over $700 million worth of property through those seven funds. Today, they’re probably worth close to $1 billion.
Do you see manufactured housing communities as a growing market?
It’s a great space on many levels. We’ve been in it for a long time, nearly 20 years. Socially, the need for affordable housing just continues to grow. Going forward, more and more Americans are looking at MCH as a viable solution. About 8% of Americans own a mobile homes. On the investor side, in the last decade, institutions have begun to embrace mobile home parks and MHC communities. Investors are more interested in investing in MHC. The National Urban Institute released a report that said 100% of the nation was in need of more affordable housing.
