NexPoint, a multibillion-dollar alternative investment firm, today announced the launch of NexPoint Storage IV DST, a Delaware statutory trust (“DST”) offering comprised of three Class A, GenerationV (“GenV”) assets in submarkets with high levels of growth and average household income in the Phoenix, Arizona and St. Petersburg, Florida metropolitan statistical areas (“MSAs”).
NexPoint Storage Partners, Inc. acquired the assets for inclusion in NexPoint Storage IV DST, which aims to raise $70.3 million. The assets are managed by Extra Space Storage and offer revenue and value growth potential in two of Arizona and Florida’s MSAs. Extra Space is the largest third-party self-storage manager in the U.S., with over 1,200 properties under management for third parties and managed joint ventures across 40 states.
“We are very excited to launch NexPoint Storage DST IV with ownership in three premium assets in two MSAs that are among the top 10 fastest growing in the U.S. and in one of the fastest-growing sectors in the commercial real estate space” said John Good, CEO of NexPoint Storage Partners. “We believe this is a terrific opportunity for accredited investors to gain exposure to the self-storage sector.”
Two of the assets are located in the Phoenix MSA, which has a population of nearly 5 million. Phoenix has experienced rapid employment growth as high-tech companies like Intel Corp., General Dynamics, and Honeywell set up larger operations in the Phoenix MSA, in turn making Phoenix one of the popular destination cities for millennial migration. The third asset is located in the St. Petersburg area, which is the third-largest MSA in the southeastern U.S. with a population of 3 million. Population in the area – which includes the cities of Tampa and St. Petersburg – has grown nearly 14% since 2011.
According to the Self Storage Assocation, the self-storage sector has been the fastest-growing segment of the commercial real estate industry over the last 40 years. The demand for self-storage continues to strengthen as healthy job growth, rising wages, increased mobility and the formation of new households support the need for self-storage. Nationally, the self-storage sector experienced double-digit revenue and net operating income growth in 2021 and 2022 and has entered 2023 with continued strong customer demand and historically high occupancies per S&P Global Market Intelligence.
These assets continue NexPoint’s growth in the self-storage sector. NexPoint’s self-storage platform was developed from the ground up with entrepreneurial developers having substantial experience in selecting, acquiring, and entitling sites for self-storage development. Today, the platform is comprised of an investment portfolio, including wholly-owned and managed vehicles and DSTs, valued in excess of $2 billion.
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