Inland Private Closes Two Self-Storage Conversion Opportunity Zone Funds
Inland Private Capital Corporation, a sponsor of tax-advantaged investment offerings, has closed two qualified opportunity zone funds.
Inland Private Capital Corporation, a sponsor of tax-advantaged investment offerings, has closed two qualified opportunity zone funds, Self-Storage Qualified Opportunity Fund LLC and Self-Storage Qualified Opportunity Fund II LLC, after raising more than $252 million from investors.
According to public filings, the first fund launched in October 2020 and the second launched in December 2021.
Proceeds from the offerings are being used to purchase, redevelop and convert existing properties into self-storage facilities located in high density, underserved markets. To execute this strategy, the funds partnered with Devon Self Storage Holdings (US) LLC, a self-storage developer and operator.
Self-Storage Qualified Opportunity Fund closed on a total of nine properties, located in Georgia, Michigan, Missouri, New Jersey, Pennsylvania and Wisconsin. The funds together have 12 additional properties in their acquisition pipelines, which will complete their capital deployment phase.
“Inland Real Estate Acquisitions LLC and Devon have been incredibly successful at uncovering high quality, undervalued real estate opportunities,” said Keith Lampi, president and chief operating officer of Inland Private. “The dislocation that has occurred in sectors such as big-box retail presents an opportunity to reimagine and repurpose existing properties, with the dual objectives of creating an economic benefit to the communities that these properties serve and providing the potential for attractive risk-adjusted returns to investors.”
Inland Private’s national self-storage footprint has grown to a portfolio of 153 properties, 73,414 storage units and more than $1.2 billion in assets under management across the United States as of December 31, 2021.
The company said that it “experienced net growth in self-storage assets AUM,” even after taking into account its 34-property, $265 million portfolio liquidity event, completed on behalf of three Delaware statutory trust programs during the fourth quarter of 2021.
“We continue to maintain a bullish outlook on the long-term performance potential of the self-storage sector, which has been propelled by an acceleration in tenant demand, driving growth in rental rates, occupancy and investment performance,” added Lampi. “The sector’s historical resiliency to market cycles, its strong performance during the COVD-19 pandemic, and the opportunity it presents for future rent growth, are expected to position the funds to deliver long-term performance in a late-cycle, inflationary economic environment.”
Inland Private specializes in offering multiple-owner, tax-focused, private placement investments as well as qualified opportunity zone investments throughout the U.S. In 2021, the company monetized more than $1.5 billion in real estate on behalf of its 1031 exchange platform. Since inception, it has monetized in excess of $3.5 billion in full-cycle transactions on behalf of its investors. Currently, Inland Private manages a portfolio of more than $10 billion across several asset classes spanning 43 states.
As of September 30, 2021, the firm had sponsored 279 private placement real estate offerings, with investments and developments in the multifamily, self-storage, hospitality, healthcare, student housing, retail, corporate office, senior living, and industrial sectors. Many offerings have been designed for investors seeking replacement property to complete a 1031 exchange.
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