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The Self-Storage Revolution Comes to Canada

The Self-Storage Revolution Comes to Canada

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Buffalo Run, Tsuut’ina.

It was a sunny day in late June and a large crowd had gathered for a ribbon cutting in Southwest Calgary. On one level, it was a pretty ordinary Grand Opening event. A new retail store was opening in The Shops at Buffalo Run, a vibrant new commercial centre anchored by Calgary’s newest and busiest Costco. The crowd was made up of members of the Calgary’s business community, and friends and family of the owners. There were tents and balloons, along with drinks and appetizers.

Looking deeper, however, this event was anything but ordinary. The Shops at Buffalo Run is located on First Nations land, part of the innovative new Taza development, a 1,200 acre mixed-use project owned by the Tsuut’ina Nation. The ribbon cutting ceremony was attended by Tsuut’ina Elders, who led off the opening with a blessing ceremony. The building was also unusual in that it contained not one, but two businesses. In addition to the primary retail space, the building had a fully-integrated express car wash built into it, something never before done in Calgary. Most importantly however, instead of a store or a bank or a restaurant, the primary retail business was a self-storage facility.

From Humble Beginnings

For the team at StoreWest, this opening in many ways represented the culmination of seven years of hard work. The journey began in 2016 with a single property in Chestermere, Alberta. As Roland Schatz, president of the StoreWest Group of Companies, notes, “We literally started from nothing. Our first office was a combination between my dining room and a nearby Starbucks.” The team did, however, have a clear vision. They wanted to bring self-storage in Canada into the 21st Century.

When most people think of self-storage, they tend to think of ugly, corrugated steel buildings and barb-wired fences, buried off in some remote industrial park. “Self-storage has always been seen as an industrial use,” explains Schatz, “visually unappealing and best hidden away.” The team at StoreWest felt it was time to challenge this view. They believed they could build high-quality facilities located closer to, or even within the residential communities that used them. More importantly, they saw a huge opportunity for early-movers in this space in Canada. “Of the roughly 3,000 storage facilities in Canada today,” notes Schatz, “only 5 per cent of them are what we would call Class ‘A’. So, we saw a huge opportunity in the market to create a better product, not just in Alberta, but across Canada.”

Despite Alberta being mired in recession at the time, the team was able to secure financial backing from Meckelborg Financial Group (MFG), a Saskatchewan-based portfolio management group, for their first two projects. MFG had a long history of success with alternative assets, and saw storage as an excellent complement to their existing investments in student housing. “We knew members of the StoreWest team very well,” explains Mark Meckelborg, president of MFG, “and we bought into their vision for this asset class, and the opportunity it represented for our investors.”

With MFG’s support, between 2016 and 2020, StoreWest built two self-storage facilities in the Calgary area – Chestermere and Dufferin – along with a state-of-the-art car wash facility at Dufferin.

And now, a new Canada-USA partnership is disrupting the national self-storage scene, expanding the Bluebird Self Storage brand coast-to-coast.

StoreWest first encountered Bluebird in late 2019, while looking for new third-party management for their two storage facilities. Originally out of the U.S., the founders of Bluebird – Jamie Bennett and Reade DeCurtins – had been active building storage facilities in the GTA for almost 20 years. In 2016, they launched the Bluebird brand in Canada, and began building Class ‘A’ facilities in the GTA under the new brand. In 2019, DeCurtins relocated his family from North Carolina to Calgary as part of Bluebird’s commitment to the Canadian market.

What started as a management contract with Bluebird’s newly formed management company quickly blossomed into a deeper relationship. Supported by MFG, Bluebird and StoreWest collaborated on the acquisition of existing self-storage facilities in Montreal and Dartmouth, while also agreeing to partner on two new Class ‘A’ self-storage development projects in Calgary. “We quickly saw a lot of synergies between the two groups,” says DeCurtins, co-founder of Bluebird. “Like us, StoreWest was focused on disrupting storage in Canada, and wanted to build a portfolio of best-in-class assets.”

This growing partnership consolidated in late 2022 with the founding of StoreWest Bluebird Partners Ltd, a joint venture between the companies to centralize all development across Canada under one roof. “Partnering with Bluebird not only gave us access to a great brand and management company,” states Layne Gardner, VP Real Estate for StoreWest, “it also allowed us to quickly expand from a regional to a national player in the self-storage space.”

StoreWest and its partner Bluebird have four projects currently under construction in Calgary, Montreal and the GTA, with six more set to begin between in four different provinces, representing roughly $200M in new development between Q3 of 2023 and Q2 of 2024. The development pipeline for 2025 and beyond is measured in dozens of properties, says Gardner.

Changing the face of
storage in Canada

What is notable about the StoreWest Bluebird partnership is not simply the scale of it, but also the approach. It is as much about ‘how’ and especially ‘where’ to build self-storage, and what this means for how the asset class is viewed going forward. Take the new Buffalo Run facility as a trend-setting example. It is not located in an industrial park, but instead right in the middle of retail/commercial hub, just down the street from a Costco. Its sister project, due to open later this year, is similarly located right in the middle of one of the most affluent communities in SE Calgary, Mahogany, across the street from a Sobeys and surrounded by multifamily housing. Both facilities more closely resemble retail shops or office buildings then they do self-storage facilities. “We believe the future of self-storage is to be part of mixed-use communities,” notes DeCurtins from Bluebird. “It needs to be part of the community, not set away from it. If you are going have people living in 600 square foot apartments, having affordable extra storage space nearby makes sense to everyone.”

As part of changing the nature of storage, StoreWest/Bluebird are not only evolving where and what they build, but also how. The team partnered with Alberta-based Eagle Builders on Buffalo Run to build their first 100 per cent pre-cast storage facility. “Eagle’s state-of-the-art process allowed us to complete the facility in roughly nine months,” explains Scott Morrison, chief development officer for StoreWest. “That’s three to four months quicker than a typical build process, which is a game changer for self-storage development.” 

Taking the next step…

In January of this year the Bluebird/StoreWest group announced the next and perhaps most important step in their journey to change the face of storage in Canada. Together with long-time partners Meckelborg Financial Group, and Calgary-based fund manager ICM Asset Management, they launched the ICM Bluebird Canadian Self-Storage Fund. The goal of the Fund is to aggregate Canada’s first and only coast-to-coast Class ‘A’ self-storage portfolio. “This Fund fills a much-needed hole in the self-storage industry in Canada,” states Steve Elliott, VP Investments for StoreWest. “It truly will be best-in-class portfolio for the self-storage industry.” The Fund has already acquired eight different properties, including two greenfield developments, and is focused on building a billion-dollar platform in the next two years. 

Full Circle

On an Autumn night in early October, the StoreWest team will be in attendance at the E&Y Entrepreneur of The Year dinner in Calgary. They are one of the finalists for the Prairie Region, and will find out at the dinner if they’ve won. “Obviously winning would be great,” notes Schatz, “but even being at the table is not something we would ever have thought possible when we started this journey.”

Schatz goes on to explain that, as part of the E&Y process they had to reflect on their growth as a company, and contemplate where they are today. “We’ve gone from a few guys meeting at Starbucks with a vision to build a couple of self-storage facilities, to $200M in development across Canada, and co-founders of a Storage Fund,” he notes with a shake of his head. But the journey is far from over.

The team is already mapping out expansion in at least five major Canadian cities from 2024 and beyond, where the original vision of revolutionizing self-storage across Canada will soon be realized.

www.storewest.ca

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