Real-Estate entrepreneur bets RV storage is the next big thing | Mint

Real-Estate entrepreneur bets RV storage is the next big thing

RecNation charges range between $150 and $700 a month depending on the size of the RV and the location of the facility (Photo: Airstream)
RecNation charges range between $150 and $700 a month depending on the size of the RV and the location of the facility (Photo: Airstream)

Summary

Gary Wojtaszek’s new business, RecNation, provides storage for recreational vehicles, boats and other leisure-time equipment

Thousands of recreational-vehicle owners are hitting the road this summer. Gary Wojtaszek’s new business is about what happens to them when they get back.

The real-estate entrepreneur, best known for building and selling a data-center company for about $15 billion this year, has a new niche commercial-property business. This one focuses on storing recreational vehicles, or RVs, when they aren’t in use. RV sales boomed during the pandemic as people opted for vacations that allowed for social distancing.

Mr. Wojtaszek and his capital partner, the private-equity firm Centerbridge Partners LP, have created RecNation RV & Boat Storage. The company owns 31 properties in Texas, Florida and Arizona that store fleets of RVs, plus boats, all-terrain vehicles and other leisure-time equipment.

RecNation has signed contracts to acquire another 10 locations in the next six weeks, Mr. Wojtaszek said, and will spend about $300 million once the current deals in the pipeline close. He hopes eventually to expand to as many as 400 properties by acquiring small operators.

“It’s not a really well-run, professionally managed industry," Mr. Wojtaszek said. “It’s just mom-and-pop operators."

RecNation’s expansion comes as investors search for new commercial real-estate businesses because of growing challenges being posed by traditional property types. Remote working trends fueled by the pandemic have raised doubts about office-building valuations, while industrial- and apartment-building prices are starting to look expensive.

Niche sectors such as data centers, university housing and self-storage have performed well in recent years. Scale has enabled them to invest more than smaller competitors in such things as digital marketing and specialized services.

“You can build clusters [of locations] within key markets," said Billy Rahm, senior managing director of Centerbridge, which also is making a big investment in the U.S. marina business.

RV manufacturers such as Thor Industries Inc., Winnebago Industries Inc. and Berkshire Hathaway’s Forest River RV shipped over a record 600,000 vehicles in 2021. This year is on track to be the second-biggest year with more than 500,000 unit shipments, according to the RV Industry Association.

But high gas prices and inflation, as well as a possible recession, could put a damper on sales. Some top-of-the-line RVs—which can cost more than $1 million fully loaded with marble countertops, multiple bathrooms and king-size beds—have gas tanks that hold 150 gallons.

Manufacturers might have to raise their prices to make up for their own increasing costs. “The consumer…is not going to be a big fan of that," Winnebago Chief Executive Michael Happe said on a June earnings call.

Mr. Wojtaszek predicts that demand for storage will stay strong even if there is a recession or if high inflation damps RV sales. He noted other trends are benefiting the storage business, particularly growing efforts by homeowner associations in some communities to prohibit RVs and boats from being stored in front of houses.

Mr. Wojtaszek began building his data-center company, CyrusOne Inc., while working for Cincinnati Bell Inc. and became its chief executive when it was spun off in a 2013 initial public offering. It was sold this year to buyout firms KKR & Co. and Global Infrastructure Partners LLC in a deal valued at about $15 billion including debt.

When Covid-19 hit, he and his wife opted to buy an Airstream RV and travel around the U.S. He started thinking about the RV storage business when he had difficulty finding a place to store it. Mr. Wojtaszek wound up paying more than $10 million for the 12-acre storage business he used about 20 miles from his Dallas home.

RecNation charges range between $150 and $700 a month depending on the size of the RV and the location of the facility. Mr. Wojtaszek says he invests in many of his locations by enclosing all the storage units and providing a range of services like maintenance assistance, sewage dump stations and “things that are generally a pain if you have to deal with them."

 

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