Self-Storage Remains Popular on Local and National Level; Demand Outweighs Supply
PHOENIX, Nov. 12, 2018 – Cushman & Wakefield negotiated the sale of two self-storage facilities for $9,335,000. Irvine-based Westport Peoria Phoenix Self Storage, LLC purchased the two U.S. Storage Centers, located at 19315 N. 83rd Avenue in Peoria, Ariz. and 2331 W. Indian School Road in Phoenix, Ariz., from Phoenix-based Orsett Storage LLC.
Cushman & Wakefield’s Executive Directors Paul Boyle and Rick Danis represented the buyers and the seller.
The two U.S. Storage Centers have a total of 943 units and are a combined 92,805 square feet. Each property features climate controlled units, onsite office managers, and RV and boat storage. At the time of sale, the properties were 88 percent occupied.
“The sellers received several offers for the stabilized portfolio, which had little deferred maintenance issues and are well positioned for the purchaser to increase their yield through rent growth. The self-storage industry remains popular with investors on a local and national level and demand continues to outweigh supply,” said Paul Boyle.
According to Cushman & Wakefield research, self-storage capitalization rates have stabilized and could increase slightly within the next 12 months due to the increase in interest rates. Additionally, buyers continue to recognize the risk of new supply entering the market and are more conservative in underwriting, where there is a significant potential for new supply. Most market participants are anticipating a transition given the supply-side issues impacting the underlying fundamentals.
While there are concerns about new supply and increasing cap rates, there continues to be a significant amount of capital that is still looking to be placed in the sector. Historically high returns from the self-storage REITs continues to attract new market participants.
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Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.