Spartan Investment Group launches new $150M fund
See what can happen when you’re nice to your neighbors?
Ryan Gibson and Scott Lewis were neighbors in Washington, D.C. and got along so well, they decided to start Spartan Investment Group in 2013. Today they have 100 employees, have raised $200 million in years past and just rolled out Spartan Storage Fund 1.
The goal is to turn $150 million into self-storage property worth $400 million.
It’s the company’s first fund and will purchase between 60 and 80 properties. The minimum investment is $50,000 and the top investor so far has put in $2.5 million.
Inside the fund
Spartan Investment Group is a privately held real estate investment firm that specializes in the self-storage industry. Its headquarters are in Golden, Colorado, near Denver. Gibson is in Seattle and focuses on raising money for equity.
Gibson’s pitch to investors is that it is a way to get into storage without putting all your money at risk investing in a single facility.
“Because you can spread out the risk among multiple properties, you spread out investment risk across various attractive markets, you decrease the volatility of cash flows, reduce deviations from targeted returns, invest in multiple business plans and hold periods with the same minimum investment,” Gibson said.
The company will focus on mostly newer facilities located in cities that have high return growth, job growth, population growth and submarkets that match what Spartan seeks.
It currently operates in 10 states and will focus on the Southeast; Texas; Colorado; the Pacific Northwest; and high-growth markets such as Madison, WI; Minneapolis, Minnesota; Tyler, Texas; Chattanooga, TN and bedroom communities surrounding the Dallas-Fort Worth area.
“We wouldn’t invest in Detroit because of a loss of jobs and population,” Gibson said. “We would invest in Tyler, Texas because it has job growth and population growth. We wouldn’t invest in Chicago; we would invest in the Seattle metro area.”
They’ve already chosen their first purchases, which are two properties in Louisville, Kentucky.
‘Strike while the iron is hot’
Spartan’s ideal investor is a professional, such as physicians, attorneys, stockbrokers, retirees, high-net-worth income earners who wish to diversify away from the stock market and invest “in one of the best recession-resistant asset classes, which is storage,” Gibson said.
Another target is real estate pros that don’t want to put in the time to find and fix up a self-storage facility but still want to own one.
“The mindset is we want to strike while the iron is hot,” Gibson said. “We see the opportunity to build a portfolio and position it for great yield and return for our investors…And we think the time is now.”
Gibson also stresses that the company believes in GRITT values – growth, respect, integrity, tenacity and transparency.
“As long as you follow the values, you can do no wrong,” he said. “We’ve been able to hold it together at a time when it’s difficult to keep people.”
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