Alan Mruvka On His E! Past and StorageBlue Future

“I was, of course, more of a silent partner, but I had always been doing real estate in the background,” said Mruvka, who stayed at E! until the early 1990s. “When I left E! and was still in L.A., I was producing about half a dozen movies and a bunch of TV series, and I was also building small office buildings around Los Angeles, so I’ve always done entertainment and real estate. It’s a very unique blend.”

Real estate eventually took center stage with Mruvka, who founded StorageBlue in 2014. He expanded his portfolio in May with the acquisition of three assets in New Jersey and Staten Island from American Self Storage and is targeting more acquisitions before the end of 2022. (StorageBlue has 13 locations in New York and New Jersey with 10 more under development.)

Mruvka recently spoke to Commercial Observer about his experience founding E!, how the channel has evolved, the growth of self-storage as a commercial real estate sector since his entering the industry in the early 1990s, and how COVID-19 impacted it.

The interview has been edited for length and clarity. 

Commercial Observer: You were born in the Bronx and then lived in Flushing, Queens, before moving to New Jersey at age 6. Did you have any career aspirations as a kid, and what were you drawn to at that early age?

Alan Mruvka: I did know very early on what I like, and I was a movie and television fanatic from when I was 5 years old. I remember when I was 5, we were living in Queens. I don’t know if you remember this, but there was a thing called the “Million Dollar Movie” on television and they used to show a movie of the week. They showed the same movie every night for that week, and I would watch that same movie every night the whole week. I was really drawn to it. 

When I was a little kid and my mother wanted me to get in the bathtub, she would have to wheel a TV into the bathroom and sit there for a sitcom and then I would get out. I was really drawn to television.

Talk about starting young! How did you parlay that love for television into working in the media and entertainment industry?

As I got older I really developed two loves, which were the entertainment business and architecture. When I got into college I didn’t know which way to go. Because architecture is like a packed-in five-year program I didn’t want to lose any credits so I decided that I would leave to go to school for architecture, but still had that love for film and television. I went four years to the University of Miami and then I went a year and a half to Pratt Institute in Brooklyn. When I got out of school, I was renovating brownstones in Jersey City, but I still had that real love for movies and television. So I was trying in the worst way to find ways I could get into the movie business. 

I was going to a lot of different seminars about the entertainment industry. I went out to Los Angeles one time and the seminar was how to sell your screenplay to a motion picture studio. They had five or six studio heads up there speaking, but no one really spoke about how to sell your screenplay to a studio. They were all up there kind of complaining about the high cost of advertising movies. Back in the ’80s, you could spend $50 million to $100 million dollars on a movie but rely on a black-and-white newspaper ad to advertise that movie nationally. Before a movie would come out there would be some local advertisements on TV, but there was no real good way to advertise the movie nationally.

I was thinking about it, and at the same time I was a huge MTV fan in those days, and MTV was all about music videos and music videos that would have DJs do some interviews with musicians and find themes. And, I thought, “What about doing one of those, like an MTV for movies and television?” Cable in those days was very limited. I used to think of cable television as like a newspaper where it had headlines and headline news, sports and ESPN, the Weather Channel, but there was no entertainment section of that newspaper. So I set out to finalize that idea that I was going to pursue for a while, and I set out to raise money to start that network, which ended up being E! after three years of raising some money. That is how I got into the entertainment industry.

Take us through the E! television launch.

When I had the idea for E!, I didn’t really know anything about starting a television network. 

I had a friend at Showtime in marketing that I called and told him I have an idea for a network, and could he help me put a business plan together. He pointed me in the direction of [the person] who turned out to be my partner, Larry Namer. Larry was between gigs and he had worked for Manhattan Cable and Valley Cable. We came up with a business plan and a pro forma that I needed $6.9 million to start the network, which was ridiculously wrong at the time as you needed like a billion dollars to start a network. I didn’t know better and I set out to raise the $6.9 million. I was going back and forth to Los Angeles every two or three weeks for about three years setting up meetings and trying to raise money. 

After not raising a single dollar in the three years, I was flying back to New York and got upgraded to first class and met a guy there who was speed reading Variety and The Hollywood Reporter magazines, and I’m thinking, “This guy is in the entertainment business, and I’ve got this guy for five hours and am going to work on him.” I started a conversation and pitched it to him. It turns out that he was an in-house investment banker for what at the time was Warner Communications before Time and Warner merged. He was like, “This is a great idea, give me 30 days.”

We landed in New York, we met a couple of times, and he took me down to Wall Street. We did a roadshow and one company bid and put together a group of companies. They gave me $2.5 million. I took the $2.5 million, went to Los Angeles to set up shop, and hired five executives and 20 interns and we got the network on the air in about three months. Once I got the network on the air, that same Wall Street company raised me another $50 million. Another three months later another $50 million, and months later another $10 million. I raised another $200 million right away and grew the company to about 1,000 people. 

How do you view the channel in what it has evolved into? 

Today the company is owned by Comcast and it’s worth about almost $15 billion. My original idea was more about promoting movies and television, like a 24-hour “Access Hollywood” or “Entertainment Tonight.” We were a publicist’s dream to get whatever word they wanted out. We worked very closely with the Hollywood community.

At a certain point, reality television started to move in and take over programming. Today people see it as like either the Kardashians or E! News. I really believe that they really missed the boat. In the last 10 years, they let TMZ, a small company, go right by them. We were the definitive entertainment news-
gathering source. I think it’s lost its way, and I don’t think there’s a clear direction anymore.

Turning to your current career, how did you get interested in real estate, and why did self-storage in particular interest you?

I went to school for architecture, and when I got out of school I got into renovating buildings in Jersey City. I started with brownstones and went for new units, and, like any young developer does, went even bigger, bigger, bigger. I bought a larger building to make like 20 to 25 condo units in Jersey City. At the same time I was renovating the building, I was trying to get E! going.

Eventually, I did raise that $2.5 million that I mentioned, and I dropped everything in Jersey City and I ran to Los Angeles. That condo building sort of started to go into foreclosure. And I didn’t have a lot of money. My father was based on the East Coast, he was in the garment business. And two guys approached my father and suggested making the building self-storage. That was in 1990, so, by default, I became a self-storage pioneer. What the four of us did from that point on while I was running E! is grow that self-
storage company to about 17 buildings in the New York area and about 3 million square feet of self-storage. So we were one of the first and largest self-storage companies. 

How has self-storage changed since you first got involved?

When I started in the self-storage business 30 years ago it was a very low-tech business and very low-tech industry. People looked at self-storage as a way to warehouse land until they figured out what to do with the land. But self-storage has really emerged into a very hot sector of the real estate industry where the rents you get are sometimes equivalent to office rent. 

Self-storage has evolved into a true high-tech e-commerce business. When I came back here, I didn’t really know what to expect, but I disrupted the industry by taking it even more high tech than it was and offering free pickup and making the experience a lot better.

How active are you with acquiring new self-storage assets today, and how is the competition from lenders trying to finance these deals?

I’m very active and it’s all that I do. I’ve evolved from a self-storage operator to a self-storage developer. I have great people that work for me that run the facilities, so I’m always out there looking. I do better at building and renovating buildings into self-storage because the sector is so hot today and the cost is very high. So, when you find a good occupied self-storage building to purchase, there’s a lot of competition from the REITs and from the big funds because everybody’s fighting for the same building. Mayor Bill de Blasio put a freeze on self-storage in 2018 in the five boroughs, so it makes it even harder to build self-storage. So it’s good for me, focusing on New Jersey. 

There are a lot of lenders who like self-storage, where it used to be that a lot of them never financed it. Now you find that the banks either have done a bunch of self-storage deals or want to start because it’s a very stable sector. It’s very stable. The leasing commission is very easy. People tend to stay six, seven years in self-storage, sometimes longer, so the banks are finding it is a very pleasant experience financing. 

Self-storage really skyrocketed during the beginning of the COVID-19 pandemic. How was that period for you?

It was a very serious time, but we broke our monthly income record every month. Every day was spring cleaning because everybody was just sitting home looking at all their stuff. In addition to that, a lot of people turned their second bedroom into an office. There were a lot of other factors, like a lot of kids not going back to college, or kids packed up at school and didn’t go back. It was just a very weird, different type of time but resulted in very crowded self-storage buildings. 

Lastly, do you prefer real estate or entertainment?

A lot of people ask me that question. I’ll always have entertainment in my blood, but I do love real estate a lot. The entertainment business has grown very corporate. There’s not a lot of room for the independent people anymore, but I do love it. In a lot of weird ways I can exercise my creativity easier and more freely in real estate than entertainment. Entertainment is all about collaboration and collaborating with whomever’s financing your project. In real estate there is not much collaboration, which I actually enjoy. 

To answer your question, I like them both but for different reasons. 

Andrew Coen can be reached at acoen@commercialobserver.com.