The term GenV or “Generation V” was coined by the NexPoint Storage team as an industry description of newly built, multi-story, climate-controlled, Class-A self-storage facilities located in dense and growing markets throughout the United States. The V depicts both the number 5 and the letter V, referencing the 5th generation of self-storage facilities containing the design and technological advances in self-storage over the industry’s 50-year history, such as self-contained climate-controlled buildings with modern security and other amenities and the word “vertical” characterizing the multi-story facilities built on small tracts of land in dense urban core markets that NexPoint Storage targets for investment.
GenV: The New and Improved Storage Facility
Developing Facilities in Select Submarkets
We built our portfolio through a strategy of providing debt and equity capital to self-storage entrepreneurs in an investment structure that facilitates NexPoint Storage’s ultimate ownership via partner buyouts or right-of-first-refusal exercises. Our investment strategy focuses on GenV facilities in submarkets exhibiting the following characteristics:
An Entrepreneurial and Creative Approach
We have extensive expertise and experience partnering with knowledgeable industry professionals to provide first mortgage or preferred equity development financing, joint venture capital and/or certificate of occupancy takeout acquisitions.
We grow acquisitions of existing properties (lease-up and stabilized) from third parties and select in-house development projects.
Investing through Financing and Acquisitions
NexPoint Storage invests in newly built, multi-story, climate controlled, Class-A “Generation V” self-storage facilities—located in dense and growing markets throughout the United States. NexPoint Storage is a continuation of the investment strategy and approach employed at Jernigan Capital, while leveraging NexPoint’s resources and proven expertise in commercial real estate financing, product strategy, and distribution.
Based on data provided by Yardi Matrix, NexPoint estimates that from January 1, 2015 through January 1, 2020, between $25 and $30 billion of new GenV supply entered the top 50 Metropolitan Statistical Areas (MSAs). We believe as much as 75% of the new supply (between $19 and $23 billion) was developed by “merchant builders” targeting an exit through property sale rather than cash flow through a long-term hold.
A substantial majority of these new deliveries have not reached the market yet, creating numerous acquisition opportunities for NexPoint Storage and NexPoint.
Potential “GenV” acquisition volume
coming to market by 2023
DSTs: Self-Storage Investment Vehicles
Self-storage properties can be packaged into tax-advantaged investment vehicles such as DSTs or Delaware Stuatory Trusts. DSTs are commonly used in a 1031 exchange which gives an investor the ability to defer capital-gains taxes on real estate sales by reinvesting the proceeds in “like-kind” properties.