Category: Self Storage

Self-Storage REITs Smell Acquisition Opportunity in Newly-Built Facilities

As newly developed self-storage properties face a tougher lease-up environment, REITs see potential acquisition bargains.

Self-storage REITs are ready to swoop in on an enticing source of acquisitions.

As the self-storage industry continues to contend with a glut of supply in many major markets, some developers are nervous. Why? Because they’re wrestling with slower than anticipated lease-ups at new self-storage facilities.

“The pro formas for these developers aren’t necessarily meeting expectations. That’s a nationwide phenomenon now,” says Marc Boorstein, principal with Chicago-based MJ Partners, a commercial real estate firm whose specialties include self-storage.

For at least some of the five major publicly-traded self-storage REITs, this translates into possible opportunities to buy newly-constructed properties at bargain prices at a time when the REITs have been curtailing their in-house development activity.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.


Picture: Pixabay

An Overview of the Self-Storage Market

Highlights from a recent Marcus & Millichap report on the self-storage outlook in 36 markets across the United States.

In February, Marcus & Millichap released its annual forecast for the self-storage market in the United States.

Overall, the firm sees the investment climate as being robust for the sector, in part due to favorable demographic trends.

“The self-storage industry continues to benefit from long-term demographic factors, including the aging of the millennial generation,” according to the report. “The 80 million strong population cohort represents a little less than a third of all non-commercial self-storage renters. That proportion is likely to rise as the leading edge of the demographic group enters their primary income-earning years.”

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.


Picture: Pixabay

Where Does Tidiness Craze Leave Self-Storage?: Stephen Gandel

Developers may have added too much space to the self-storage sector to keep supply levels in check.

(Bloomberg Opinion)—One of the hottest sectors in real estate investment trusts last year may no longer spark joy with investors. Marie Kondo, the tidying-up sensation, may be partly responsible.

Shares of self-storage REITs were up 3 percent last year, including dividends, in what was a tough market for real estate. Hotel REITs fell 12 percent, including dividends, in 2018. REITs focused on shopping centers dropped nearly 15 percent. Overall, REITs lost 5 percent last year, worse than the overall stock market. The basic reason for the success of self-storage is pretty evident to anyone who has lived in America, or just knows Americans: We buy a lot of stuff, and we don’t like to throw it away. That’s created a steady stream of demand for self-storage units for a while.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.


Picture: Pixabay

CRE Investors Are Showing a Growing Appetite for Higher-Yielding Alternative Assets

Sectors such as self-storage and student housing appear more attractive as yields for core real estate drop.

It wasn’t that long ago that alternative properties didn’t get much respect, but as yields compress in core property sectors, alternatives have caught the eye of investors, and 2019 should continue that trend.

“For many years, non-traditional real estate was not fully appreciated,” says Tyler Blue, vice president of the advisory and consulting arm of research firm Green Street Advisors. But alternative sectors have outperformed expectations in recent years, and investors have noticed.

“Once the broader real estate investment community caught on, more capital flowed in, particularly as the more traditional real estate sectors became fully valued. So, the more progressive investors benefited and the institutions have followed their lead,” Blue says.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.

Picture: Pixabay

Self-Storage Investors Still Pay Top Dollar for Acquisitions, In Spite of Declining Yields

Investors are talking a good game as they negotiate to buy self-storage properties—but on average, they are still paying high prices and accepting low investment yields.

“I have seen some re-trading… maybe 1.5 percent of the purchase price,” says R. Christian Sonne, director of specialty practices for the national self-storage valuation group at real estate services firm CBRE. “Property assessment reports are being reviewed a lot more closely than a few years ago.

But deals are still getting done at nearly record low cap rates, with multiple potential buyers bidding for most properties, says Sonne.

Self-storage properties remain extremely desirable to investors. Investors are paying high prices despite rising interest rates and reports of overbuilding. Their enthusiasm to buy may be because the percentage of occupied space in the sector is at an all-time-high. Self-storage also earned a reputation for being resistant to recessions during the last economic downturn, giving even more comfort to potential investors.

“There is a great deal of capital pursuing deals and, in some cases, we’re seeing aggressive pricing—especially in high-density urban markets,” says Wayne Johnson, chief investment officer with SmartStop Asset Management, a diversified real estate company focusing on self-storage, student housing and seniors housing.

Click Here For The Full Article

SUBSCRIBE TO OUR NEWSLETTER

Start receiving; press releases, commercial real estate news, information and trends on particular markets and regions.

Scroll to top