FAVS will seek to acquire “vacant big-box retail properties”
April 3, 2019: Fairway America has announced the launch of an investment fund dedicated to self-storage acquisition and development, particularly conversion opportunities. The Fairway America Value-Add Self-Storage Fund (FAVS) will seek to acquire vacant "big-box" retail properties at significant discounts and remodel them into Class-A self-storage facilities.
“The market is prime for adaptive re-use of vacant big-box retail property into a variety of uses, and we think self-storage makes the most sense. There is often an undersupply of self-storage in areas that have historically not allowed this type of use. And, as an asset class, self-storage has historically outperformed many other real estate asset classes, including in recessionary periods.” Said by CEO Matthew Burk.
FAVS will target locations that are supply-constrained, yet nearly 100% built-up with residential housing. Typically, these locations will have limited potential competitive properties and zoning restrictions that present a high barrier to entry for future competition.
Other reasons the company opt for targeting self-storage facilities are low operational costs and managerial ease compared to other retail sectors. Fairway is also optimistic about the sector’s predictability and stability regarding cash flow and tenant occupancy. The advantages of the conversion strategy include lower construction costs and construction risks than those of ground-up development coupled with a faster time to market.
FAVS also fits within Fairway’s niche investment strategy of pursuing opportunities within the small-balance real estate (SBRE) space. The company will work with “experienced sponsors” targeting self-storage conversion projects.
GreenSpace Holdings LLC is also a part of Fairway’s self-storage investments. GreenSpace Holdings a development firm specializing in multi-story facilities. The company uses a patent-pending building design that incorporates surplus shipping containers.
Fairway works exclusively within the SBRE space. It provides accredited investors access to SBRE deals, raises capital for entrepreneurs and provides advisory and consulting services to those interested in setting up 506 Regulation D-pooled investment funds.