It has been approximately 35 years since The Peterson Cos. opened a new division, and the Fairfax, Va.-based real estate company chose to focus it on the growing world of self-storage.
The company, born in 1965, first got into this business about five years ago and has developed and opened three projects of more than 100,000 square feet each in the Virginia towns of Ashburn, Gainesville and Stafford. CubeSmart leverages all three.
“We’ve been in the self-storage development business since about 2015, 2016, but we did it on an interim basis,” said Jim Mertz, who leads the new division. “We have now completed and opened three projects. It seemed like the time had come for the company to dedicate the necessary resources to creating the division. »
“We appreciate that the leases are short term and we appreciate the ability to respond to the market. If the market goes up, we can institute a rent increase. And we don’t have to do any leasehold improvements,” Metz said.
Mertz joined Peterson in 2015 and has worked on the development of Promenade at Virginia Gateway, a Cabela’s store in Gainesville, and TopGolf and IFly (indoor skydiving) at the Commonwealth Center.
The Storage Beat caught up with Mertz, 65. Read our conversation below.
What do you like about self-storage?
We develop all kinds of real estate: apartments, office buildings, shops, distribution centers. When we started developing self-storage, we were able to use the skills we learned from these other developments. We’ve learned that it’s an easy type of product to learn, not complicated to develop, and once you’ve developed it, operationally, it’s relatively [easy to run].
Where would you like the new division to be in a year?
In 12 months, I know we will have four facilities open and operational. I would like to have five or six more in the pipeline.
What are you looking for in a project or an acquisition?
So far we have only developed the base. We did not purchase any self-storage facilities. That doesn’t mean we wouldn’t. We look for situations with an added value component, where we can come in and buy and create value, expanding, adding space, reconfiguring space. We are aggressively looking for new sites to buy.
What is your vision of the self-storage industry?
What we’re seeing right now, you have a lot of people still buying things and needing an opportunity to store them. It’s getting harder and harder to expand, especially since construction costs have gone up so much in the last four months. I think the metrics keep getting better and better. I think the prices will continue to rise; inflation is hitting everything right now.
Were there any surprising events?
I think the most unusual thing is that one day I walked into one of our facilities and noticed that someone had practically unloaded a truck, left it outside the building and didn’t come back for him. What rights did we have to get rid of all this? Did they come back? You’re not coming back? They never came back, so we threw it all away.
What else would you like to add?
When it comes to site finding, one of the things Peterson is known for is that we have many relationships with the municipalities and counties around us; we’re used to running things through the eligibility process. This is something other developers might be afraid to cross.