FT. LAUDERDALE, FL-Strategic Storage Trust Inc. a publicly-registered, non-traded REIT, based in Ladera Ranch, CA, purchased a 1,040-unit, self- storage facility in Davie, west of Ft. Lauderdale. The REIT owns 35 self-storage facilities in 14 states, including Maryland, Florida, North Carolina, South Carolina, Nevada, Arizona and California. The seller was not disclosed.
“We will continue to focus on major metros like the South Florida market which offers tremendous long-term value at today’s prices,” says H. Michael Schwartz, SSTI’s chairman and CEO. The REIT did not disclose the price of the facility.
The Davie facility, which consists of 13 single-story buildings, is located on 8.4 acres less than three miles west of Ft. Lauderdale-Hollywood International Airport. “The Davie property, which was built in 1990, was a little older than most of our facilities, but we liked the location on State Road 7 near I-595,” says Wayne Johnson, senior vice president of acquisitions at SSTI, who is based in Dallas. “It has high visibility, both climate-controlled and non-climate-controlled units and easy tenant access,” he says. The property includes a manager’s office with a two-story, residential apartment and it has an occupancy of 78%.
The Davie property is located between two recently-acquired SSTI properties in Oakland Park and Weston. It is nine miles southwest of the Oakland Park site and ten miles east of the Weston facility.
“We’re able to operate our brand much more efficiently in the area with a concentration of locations there,” says Johnson. “A growing proportion of our self-storage properties in Florida are in Broward County, the second most populous county in Florida,” he says. “Higher density and limited land available for new development can help drive occupancy and demand,” says Johnson.
Before forming the non-traded REIT, its sponsor, Strategic Capital Holdings, had made other acquisitions of self-storage facilities using different entities, says Johnson. But all sponsor’s self-storage centers are still dubbed SmartStop Self Storage, which is the trade name SSTI uses for its facilities.
“Self-storage is popular everywhere,” not just in the Sunbelt, says Johnson. “Florida is experiencing an economic downturn, but we believe in the state over the long-term, even though, in the short-term, business there is flat or growing only slightly,” he says. “Still, there are compelling demographics in Florida, Texas, the Carolinas, California and Illinois,” says Johnson.
“The self-storage business thrives on movement,” says Johnson. “Businesses are growing and shrinking; people are moving out of a house into an apartment, a business is going out of business, is shrinking its retail location, or a business needs to store goods,” he says. All of these situations generate sales for the self-storage business, says Johnson, and most of those sales, about 80%, come from residential customers.
SSTI has about $243 million worth of assets, which is the value of the REIT’s properties, says Johnson. The REIT has about 24,500 self-storage units and three million rentable square feet of storage space.
SSTI’s sponsor, Strategic Capital Holdings, manages a portfolio of over 6.3 million square feet of commercial properties, including 4.6 million square feet of self-storage facilities, with a combined market value of over $685 million, according to company information.