BALTIMORE, MD-Two self-storage properties totaling 171,000 square feet have traded. The seller was Lubert-Adler and Devon Self-Storage and the buyers were procured separately by Marcus & Millichap's Philadelphia office. All in all it was a routine transaction, except for the glimmer of insight about buyer thinking in this asset class. And that is, according to Marcus & Millichap's Richard A. Schontz: "Buyers are starting to look at pro forma cap rates again."
He comes to this conclusion via the Baltimore property's trade. It was an unstabilized asset with occupancy in the 30 to 40% range, "but from a pro forma standpoint the cap rate would be north of 10," he tells GlobeSt.com. In short, much like with the related industrial class, buyers for self-storage have become much more enthusiastic about a property's upside. Indeed, the buyers, private, mid-market self-storage operators managing more than 30 self-storage facilities, were selected after a national marketing campaign that resulted in 18 offers.
Each site was an industrial building converted into self-storage properties in 2004 and 2006. The properties now total 1,577 climate-controlled units.
Charles D. LeClaire, an SVP with Marcus & Millichap out of the firm's Denver office, also brokered the transaction.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
