A company headquartered in Charlotte has purchased The Vault on 17th, a 76,000 square-foot self storage facility at 1113 S. 17th St. in Wilmington.
Madison Capital Group bought the property in an $8 million transaction in September from The Vault on 17th LLC, a partnership involving several principals in GHK Cape Development and Crete Investments.
The Vault, which will be rebranded under Madison Capital's Go Store it brand, opened in July and represented the first self storage development project for the GHK-Crete partnership.
“It was our goal to deliver an extremely high-quality, safe, secure and attractive facility to serve unmet demand within the submarket. The facility and Vault Self Storage brand were well received by the market, and I am pleased with how the project turned out," said Mike Brown, managing member of The Vault on 17th and a partner with GHK Cape Fear Development, in a news release.
The facility includes 552 units, and 89 percent of them are climate-controlled. The Vault wasn't on the market when Madison Capital Group approached the previous owners.
"This acquisition presented a unique opportunity for Go Store It that allowed us to expand our presence in Wilmington, which is a target market for us," said Neil Dyer, Madison Capital Group's director of acquisitions. "There's big demand for high-quality storage and the Wilmington market has high barriers to entry as well."
The company has two other Go Store It facilities in the Wilmington area, one on Market Street and the other in Leland.
“As with any long-term investment or business venture, you must be receptive and open to evolving opportunities. In this case, Madison Capital Group and Go Store It made a compelling offer, and we were further assured that our customers would be well taken care of," Brown said in the release. "The Vault Self Storage remains interested in other opportunities to purchase or develop class-A, self-storage facilities in underserved submarkets throughout the region.”
He said self storage supply was out of sync with demand in the Wilmington area, and new projects across the Port City and in the Cape Fear region have been aiming to absorb some of that demand, especially over the past 48 months. Some national firms project that supply and demand across the U.S. for self storage could reach equilibrium over the next 18 months, but every area is different, including submarkets in and around Wilmington, he said.
"We're still on the lookout and if we see sites that have the right market dynamics, if we found a good site where the numbers looked good from a demand standpoint versus supply, we would certainly be interested," Brown said.
That demand could be affected by Hurricane Florence, which made landfall near Wrightsville Beach on Sept. 14, as some displaced residents need places to store their belongings before repairing their homes or finding new housing.
Evan Stephens, senior analyst with Madison Capital Group, said a lot of the statistics published by leading research firms reference things like dollars spent on construction of self storage facilities over the past few years as a proxy for supply.
"We still feel like there's quite a bit of unmet demand, but the facilities that are being built cost more," Stephens said. "While there is more being spent on supply now, we feel like it's a nicer product so there's not quite as much supply coming online as everybody fears."
Madison Capital Group is also looking to acquire and develop additional self storage assets in the Wilmington area, Dyer said.
Previously in Wilmington, Madison Capital firm had hoped to develop apartments and townhomes on a South 17th Street site close to South College Road that was at one time going to hold a Lidl grocery store, but Madison Capital withdrew its proposal after the Wilmington Planning Commission denied a request to rezone the properties for the residential development.