When Prakash Gunasingham and Shawn Shanmuganathan first decided to go into business together, their focus was on real estate development. This put them in touch with a number of well-connected professionals over the years, one of whom suggested they examine an old self-storage facility in remote Lloydminster, Alberta, Canada. Ultimately, this led to their first storage acquisition in 2014.
“At the time, self-storage was not considered a traditional asset class. There were no institutional investors, no pension funds in the mix in Canada. They were independent businesses, usually family owned, ”explains Shanmuganathan. “We didn’t know at all.”
Seven years later, the duo are now Managing Partners of Vaultra Storage, which operates 13 locations across Canada. In fact, the company has just completed its flagship state-of-the-art facility in Toronto’s Castlefield Design District and is leading the construction of two new locations outside of the city. Vaultra continues to upgrade its existing properties and now offers bespoke third-party project and site management services to other facility owners.
“We saw the potential of self-storage early on and we never looked back or stopped learning,” says Shanmuganathan.
One of the biggest lessons for the company came from the willingness to complete the Castlefield project last year amid the coronavirus pandemic. Designed to resemble an office building, the six-story facility contains 260,000 square feet of air-conditioned space in more than 2,100 units. Open 24/7, it has unique features, including contactless rental technology, 240 security cameras, drive-thru loading docks, and flexible office space, which can be rented by the hour. Customers can also purchase moving and packing supplies and rent trucks.
The scale and schedule of the project was intimidating, but it was completed on budget and just eight weeks past the deadline. That’s impressive considering the challenges development faced even before the first excavator hit the ground. The property previously housed a mattress factory that had burned down. Extensive environmental restoration of the land was required to bring it up to provincial government standards.
In Canada, municipal authorities are generally reluctant to build self-storage because, once operational, the facilities do not create many jobs. This could have been the case for Vaultra; however, by incorporating flexible office space aimed at small and medium-sized businesses, the project was quickly approved. The owners have partnered with My Lauft Inc. on workspaces and added a smart conference room that can be booked on demand via a mobile app.
Vaulta storage in Toronto
But there was still the reality of the harshness of winter and COVID-related delays to deal with. Vaultra has had to deal with material delivery interruptions, labor shortages, and health protocols to protect workers. The company worked with the general contractor to negotiate with subcontractors and manufacturers and make up for lost time. The submarines added additional personnel once the materials arrived and called in outside help to complete the project in 20 months.
A new model
Throughout this difficult development process, the Vaultra team have been encouraged by two compelling factors. First, the prime location is close to major highways, public transportation, and a plethora of businesses, which should translate into strong customer exposure. Second, they knew they were creating a blueprint for the future success of the business.
Vaultra Storage offers workstations
“We worked on a lot of details when developing our location in Castlefield, and now we have a model that is already working wonderfully with our two new releases,” says Shanmuganathan. “It helps to never lose sight of our primary goal of serving as a seamless and secure extension of our customers’ homes or businesses. “
This model is all the more valuable given the continued growth in widespread demand for self-storage. The surge in home sales means more Canadians are moving and storing their household goods. After spending much of the last year on lockdown, they also continue to declutter, making room for home offices and virtual classrooms.
Additionally, as businesses have increased their e-commerce capacity in the face of COVID-19, moving away from physical stores, business-to-business storage and supply chains have become more strategic in the short and long term. term. Had this trend been apparent earlier, Shanmuganathan says Vaultra would have added even more large units and parking spaces to the Castlefield mix.
Now, with Vaultra’s flagship facility filling up quickly and new sites under construction, the team continues to focus on new revenue streams. The company has also been able to accelerate and diversify its reach by entering into strategic partnerships with long-term investors like Peerage Capital, a Toronto-based private equity firm. “Together, we have devised a plan that ensures that, as our slogan promises, we have room for it,” Shanmuganathan said. “Lots and lots of space!
Ellen Du is Marketing Director for Vaultra Storage, a Canadian company that acquires, develops and manages self-storage in Albera, British Columbia and Ontario. It also provides management services on behalf of third parties as well as development and operational advice. Its portfolio includes 12 locations, with 15 projects underway in the Greater Toronto Area. For more information, send an email [email protected].