SmartStop and AXCS Capital announce a $100M self-storage joint venture. Read how this new partnership provides commercial real estate credit.
SmartStop Self Storage REIT, Inc., an internally managed real estate investment trust and an owner and operator of self-storage facilities in the United States and Canada, and AXCS Capital, a Los Angeles-based commercial real estate investment management firm, announced the formation of a real estate credit joint venture targeting bridge debt and preferred equity investments across the self-storage sector in the United States.
The Venture will deploy capital across the full spectrum of structured capital solutions, including senior loans, mezzanine financing, preferred equity and hybrid instruments. Target investment scenarios include ground-up development financing, value-add acquisitions and conversions and recapitalizations of existing assets requiring rescue or bridge capital. The Venture will have an initial target of $100 million in invested capital and the ability to recycle capital throughout the Venture’s term. The formation of the Venture reflects both partners’ conviction that the self-storage sector is at a compelling inflection point for investment. After a period of elevated new supply that pressured same-store revenues across the industry from 2023 through 2025, new development starts have declined materially, and the supply pipeline is expected to continue contracting. As SmartStop’s management has noted publicly, this improving supply picture, combined with resilient physical occupancy levels above 90% across the sector’s leading operators, is expected to set the stage for a recovery in asking rents and net operating income. For credit investors, the convergence of improving fundamentals and receding supply risk creates an environment where structured capital can be deployed with growing conviction in asset performance. “We believe now is an excellent time to add another lever of growth by putting capital to work across the capital stack in the self-storage industry,” said H. Michael Schwartz, president, CEO and chairman of SmartStop. “This joint venture gives us the opportunity to combine SmartStop’s expertise in the self-storage space with the lending platform and experience from the team at AXCS, which should result in attractive returns for both sides. The venture also allows us to provide flexible capital solutions for many of the entrepreneurial self-storage owners in the industry, smoothing the waters during turbulent capital markets.” “We are excited to partner with SmartStop in this strategic asset class,' said Ed Steffelin, AXCS Capital chief investment officer. “AXCS Capital is scaling quickly, and the engine behind that growth is the integrated platform we've built around several complementary verticals, including Investment Management and Capital Markets Advisory. We see deal flow that most investment managers simply don't have access to, and because our advisors are active in the capital markets every day, we can rapidly underwrite and price in real time. The combination of sourcing depth and execution speed, leveraging proprietary technology systems, is what differentiates us as we continue to grow our investment management business alongside best-in-class partners like SmartStop.' Information for this article was sourced from SmartStop Self Storage REIT, Inc. and AXCS Capital.
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