25 Nov 2019
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A roughly 300,000-square-foot portfolio with about 6,000 total self storage units went on the market last week, which sales advisor Cushman & Wakefield expects could trade for around $200 million.
"We've had portfolios that have this much square footage, but they're spread out throughout the country," Cushman & Wakefield Vice Chairman Mike Mele said. "To put together this large a portfolio is difficult and to do this in New York is almost unheard of."
The five properties—spread out in the Bronx, Brooklyn and Queens—were each completed within the past two years by SNL Development Group, which is the seller. They are managed by the real estate investment trust Life Storage.
Self storage construction reached $5 billion last year, roughly 20 times what was spent in 2011, according to Commerce Department data analyzed by The Wall Street Journal.
But building self storage in New York was complicated by a 2017 city ordinance that requires a special permit for the facilities in the majority of the city's industrial zones.
The de Blasio administration argued that self storage uses could squeeze out manufacturing companies that employ more people.
Industry officials said at the time that New York was underserved for self storage compared to other markets. There is about 3.5 rentable square feet of self storage space per person in the New York metro, according to data provided by Cushman & Wakefield. Nationally, there is about 6.5 square feet of rentable space per person.
With the permit process limiting competition in the storage space, Mele says the properties are well-positioned. The interest could come from either real estate investors who specialize in buying and selling self storage, he said, or from investors trying to diversify their holdings.
"While things are still good in general in the economy now, we are ten years plus in to this, and I think a lot of people are starting to think that if something happens where office rents go down, or retail is a problem, I'll have storage to muscle us through," Mele said.
The properties are at the following addresses:
134-31 Merrick St., Jamaica, 1200 McDonald Ave., Brooklyn, 1690 East New York Ave., Brooklyn, 1430 Bruckner Blvd, Bronx, 4139 Boston Road, Bronx.
