CubeSmart, a publicly traded self storage REIT, is one of the largest self storage companies in the United States and among the fastest growing. CubeSmart had outgrown its existing suburban Philadelphia, Pennsylvania office space, facing a near-term lease maturity and was interested in examining options in the market for a potential office building acquisition for their new headquarters as an alternative to an existing building acquisition. CubeSmart was also open to the possibility of acquiring well-located land and developing their corporate headquarters. An intriguing aspect to this development option was the possibility to co-locate a state-of-the-art self storage facility with the office facility, establishing a revenue-generating self storage “store” to provide an on-site example of the new CubeSmart storage technology for investors and other potential business partners. The self storage component would also provide opportunities for Company personnel training, operations analysis and optionality to convert to office space that would support CubeSmart’s future office growth.
CubeSmart retained SREA to organize and execute the search for an existing headquarters building and development options. In the event the development option was selected, SREA would be engaged to assist CubeSmart with an analysis of the development process, cost and risk.
- Created preliminary project budget and projected schedule
- Performed a current needs analysis
- Performed employee zip code and transportation analyses
- Conducted a market survey
- Performed building inspections and analysis
- Conducted space planning analysis and provided recommendations
- Performed a development and construction analysis
- Performed a financial analysis – lease versus purchase
- Conducted sale, development and construction agreement negotiations
- Provided construction pricing
- Conducted financial analyses for budgets and pro forma
How SREA Added Value
SREA surveyed the market for existing buildings and potential development sites and identified a site zoned and planned for an 86,000 square foot office building in the target geography of CubeSmart’s search. The building had been fully designed and had received preliminary approvals to commence construction. SREA worked with the owner and developer to determine the risk to the development process and timeline of altering the building plan to include storage, in addition to office. SREA then collaborated with CubeSmart to identify the best space planning firm for the process of designing a 40,000 square foot office building within the 86,000 square foot envelope, with the balance to be constructed as the state-of-the-art self storage facility. SREA expanded its team to include a comprehensive analysis of the practical cost implications of constructing the co-located office and storage facility and led a series of value-engineering exercises to reduce construction cost while maintaining CubeSmart’s core qualitative and quantitative requirements. CubeSmart closed on the land in the 4th Quarter of 2012 and development commenced immediately. Construction was completed in the 3rd Quarter of 2013 and SREA assisted CubeSmart with their move-in. SREA is currently providing comprehensive property management services at the Building on behalf of CubeSmart.