By Victoria Kennedy
As we conclude the first quarter of 2024, it’s imperative to spotlight Cedar Creek Capital, under the astute leadership of CEO AJ Osborne, for its notable achievements in the self-storage sector. This period has underscored the company’s commitment to innovation and strategic growth, particularly through its ventures in value-add facilities and expansion projects.
Delving deeper into Cedar Creek Capital’s strategy, Osborne elaborated on the nuanced approach that has led to significant successes in the first quarter. His passion for value-add facilities and expansion projects isn’t just about growing the portfolio, it’s about seizing opportunities where the potential for growth intersects with minimal risk. This philosophy underscores the company’s recent ventures, including the ambitious Fund Two, which Osborne describes as a perfect blend of immediate cash flow and substantial development upside.
Fund Two: A Paradigm of Value-Add Investments
One of the cornerstone initiatives of this quarter has been the completion of Fund Two, a venture that underscores Cedar Creek’s prowess in identifying and capitalizing on value-add opportunities.
During an interview, Osborne elaborated on the essence of this fund, stating, “Our big project to highlight is our Fund Two, which involves value-add facilities. These assets have been turning around very well. So, investors get in at the price at which we purchased it. All of the properties in the fund have now been identified; there are two expansion properties in it.”
These expansion properties, according to Osborne, represent the pinnacle of investment opportunities.
“Expansions are my favorite type of investments because we’re buying a cash-flowing asset that’s already profitable,” he shared. “And then we’re going to add on to it and build onto it. So we get the upside of a development without having much downside.”
Osborne’s strategy focuses on leveraging assets in high-income areas, with over $120,000 in average annual income, ensuring that the investments not only bring substantial equity but also capitalize on the exclusivity of their locations.
“We get these value-add properties and the expansion side,” he said. “So they are really good, cash-flowing assets, but we get a lot of the benefits of development. It’s a big equity play as well.”
The Surprise and Statesman Projects: Strategic Growth
The Surprise, AZ project, currently under construction, is set to enhance Cedar Creek’s portfolio significantly.
Osborne shared his enthusiasm, saying, “Surprise, we’re already under construction. So it’s already being built. And that’s very exciting because that will open up, we’re hoping, this year.”
Similarly, the Statesman, ID project has not only opened but is already experiencing a robust lease-up, having achieved over 25% occupancy. Osborne noted the unique appeal of these projects, particularly the Statesman’s irreplaceable position upon exit.
“The Statesman is just irreplaceable on the highway exit,” he said. “And the Surprise one is on the freeway exit and everything as well. It just creates a perfect mixture of tenant demand for us, which is what we pay attention to when we start these projects.”
Navigating Through Elevated Interest Rates
In a climate of rising interest rates, Cedar Creek Capital’s strategic foresight stands out. Osborne recognizes the silver lining, pointing out how these conditions have been advantageous.
“Higher interest rates have actually done wonders to slow down development, which is really good for us because that really limits supply,” he said. “So the conditions that we’re in, we’re very excited about it. And the demand that we’re seeing.”
Looking Forward
As Cedar Creek Capital strides into the rest of 2024, the achievements of the first quarter lay a robust foundation for future growth. Osborne’s vision and strategic investments have not only highlighted the company’s prowess in the self-storage sector, but also its resilience and adaptability in the face of industry challenges. With projects like Fund Two, Surprise, and Statesman charting the course, Cedar Creek Capital is poised for a trajectory of sustained success and innovation.
In Osborne’s words, Cedar Creek’s success so far has been largely due to strategic foresight and meticulous planning. Their ventures into value-add properties and expansion projects epitomize the company’s ethos of leveraging upside potentials while minimizing risks — a strategy that promises to continue to redefine the self-storage investment landscape with Osborne at the helm, as always.
About AJ Osborne
AJ Osborne is the CEO of Cedar Creek Capital and has an impressive 20 years of experience as a self-storage owner, operator, and developer. He is a founder and board member of the largest self-storage co-op, Storelocal, as well as Tenant Inc. — a SaaS company supporting self-storage facility management. AJ has also written the No. 1 bestselling book on self-storage investing and hosts the listened-to self-storage podcast, Self Storage Income. Accredited investors can find more information here: cedar.cc/invest.
Published by: Holy Minoza
