From standard property acquisitions to exploring alternative investing methods, the Investments department at Extra Space Storage navigates the ever-challenging world of real estate. Although the team’s footprint is small, with only about ten people making up the department, their unique approach to company growth has a significant impact on shareholder value and our overall long-term success.
To spotlight the Investments department at Extra Space Storage, we spoke with Brandon Jacobsen, Vice President of Investments, about the department’s work, recent accomplishments, and the ways in which they make us a better company every day.
Q: What are the Investments department’s goals?
A: To grow the company by investing in self storage in a manner that increases shareholder value. This includes buying properties (sometimes in partnership with other investors), making bridge loans, negotiating net leases, and providing capital to other growing self storage companies.
Q: Are there unique teams within the Investments department?
A: We recently hired Irena Edwards to lead our growing bridge loan business. She and Matt Lish focus exclusively on loans. The rest of the Investment team are generalists who focus on acquisitions, joint ventures, net leases, and other structured investments in addition to helping with the loan effort.
Q: Does the Investments department’s work cross over with another department’s work?
A: We rely on nearly every department to help grow the company, and we are grateful to work with a dedicated group of professionals across the company. We are always impressed with how our coworkers respond when asked to help with an investment opportunity—often under tight timeframes that disrupt their regular workflow.
Q: What word best describes the work done by the Investments department?
A: Students. We are students of the self storage market and the capital markets which are both always evolving. We enjoy learning and adapting to meet the challenges put before us. We strive to understand the direction of the storage world and how best to respond to a changing landscape.
Q: What are some challenges the Investments department faces?
A: Investors’ appetites for self storage properties are growing. This is due, in part, to the industry’s growing reputation as a recession-resilient asset class. Buying properties in an ultra-competitive market is challenging. It requires diligence and patience to find the right deals.
Q: How does the Investments department promote morale and collaboration?
A: The Investments team carves out a few days each year to enjoy the beautiful natural environment that surrounds Salt Lake City. These opportunities are a great way of building relationships and recharging the batteries.
Q: What are some of the Investments department’s recent accomplishments?
A: We recently provided a $300 million preferred equity investment that helped fund NexPoint Advisors’ purchase of Jernigan Capital. We were grateful to participate in this transaction, as it introduced us to new partners and is projected to provide highly accretive returns for our shareholders. In addition, we are excited about the future of our bridge loan program. After closing approximately $100 million in bridge loans in 2019, we are on track to close nearly $200 million in 2020, with several loans already under agreement for closing in 2021.
Q: Where has the Investments department made the most impact?
A: Helping grow the company, alongside our counterparts in Management Plus (Extra Space Storage’s third-party management platform), from 820 stores in 2010 to over 1,900 stores today. This growth has not only increased the value of the company through contributing to the company’s FFO growth, but has also provided ample opportunities for employees at Extra Space Storage.
Q: What are some of the ways the Investments department has displayed Extra Space Storage’s core values?
A: Innovation is a core value at Extra Space Storage. The Investments team has demonstrated innovation by exploring alternative methods of investing outside of standard property acquisitions. Recognizing the challenging acquisition environment, we adapted by utilizing alternative methods of investing that offer attractive risk-adjusted returns (bridge loans, joint ventures, net leases, preferred equity, etc.).
Q: What future project(s) is the Investments department looking forward to?
A: Scouring the self storage industry for new partners and new investment opportunities. The consolidation of the self storage industry is just beginning, and there will be many opportunities for growth in the future.
This article is part of an ongoing series of department spotlights at Extra Space Storage. Check back for more!