Red Dot Storage looks to raise $50M as it continues to grow

LOUISVILLE — Red Dot Holdings III LP, which does business as Red Dot Storage, is raising $50 million in capital.

The Louisville-based self-storage company has raised about $18.5 million so far, said Brook Barons, marketing manager for Red Dot. The funds are being raised through an equity offering and the date of first sale was Oct. 1, according to a Form D filed with the U.S. Securities and Exchange Commission on Oct. 16

Red Dot uses a model different from most traditional self-storage companies, Barons told BizWest. Rather than have a constant on-site staff, Red Dot storage facilities are not manned. Customers can pay bills through a kiosk and can be helped by calling a customer service number in Louisville. Facility supervisors travel between Red Dot’s more than 120 locations, checking on the properties. There is about one customer service agent and one facility manager for every eight properties. The company handles security by requiring customers to have a gate code, and the locations are equipped with video surveillance and LED lighting.

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“This is more efficient for us,” Barons said. “In the past, with more traditional models, facility supervisors at one location are spread so thin. It makes things difficult for them, one person doing so many jobs and wearing so many hats: customer service, meeting new customers, property management. It’s a lot. This way, we enable people to specialize in the things they are really good at. Facility managers focus on the property management, customer service agents focus on the customer relations side of things.”

So many industries have brought in automation, Barons added, it made sense to Red Dot to bring some automation to the storage industry.

The capital the company is raising will go to its continued growth and expansion. The company grows through acquisition – it doesn’t build new properties, but rather purchases existing ones that are already managed and have customers and brings them under the Red Dot umbrella. The company has been averaging about one acquisition per week, Barons said. Since its founding in 2013, the company has about 127 locations and plans to add 50 more next year.