Acadia Pays $170M for Self-Storage Portfolio

Acadia Realty reported on Feb. 13, as part of its 2007 year-end financial disclosure, that it had entered into a contract in December in conjunction with its self-storage partner Storage Post to acquire 10 self-storage facilities. In January, Acadia went into contract on the 11th self-storage property. The portfolio acquisition was made through its Fund III, a $500-million equity fund managed by Acadia Realty, which closed in the second quarter of last year.

All of the properties were and will continue to be leased and managed by Storage Post. The deal was brokered by Gerry Trainor, managing director of Transwestern's Institutional Commercial Group based in Washington, DC, and Steve Hryszko, national director of CB Richard Ellis' Self Storage Group based in Cleveland, who both represented American Storage Properties in the transaction. According to Transwestern, the portfolio was 72% leased at the time of sale and included six newly constructed facilities in the lease-up phase, one still under construction and four that are converted warehouse properties.

"The sale consummated the value creation process undertaken by American Storage Properties," says Andrew Czekaj, manager of American Storage Properties North LLC. "The portfolio was built over a seven-year period and based on market valuations it was prudent to sell the assets."

According to a marketing flyer distributed by Transwestern and CBRE, the offering price for the 11-property Storage Post leased portfolio was $206.6 million. The flyer listed the properties for sale as: 191 Broadway in Jersey City; 401 S. Park Ave., Linden, NJ; 4077 Park Ave., Bronx, NY; 2 Dunnigan Dr., Suffern, NY; 640 Rockaway Turnpike, Lawrence, NY: 301 Fordham Rd., Bronx, NY; 30-28 Starr Ave., Long Island City, NY; 112 Bruckner Blvd.; Bronx, NY; 363 Huguenot St., New Rochelle, NY; 131 Saw Mill River Rd., Yonkers; and 48 Metropolitan Ave., Queens, NY.

Currently, Acadia Realty Trust, in partnership with Storage Post, has four redevelopment projects under way with self-storage components that were not part of the acquisition. Those redevelopment initiatives are at Acadia's Liberty Avenue property in Ozone Park, Queens, the Pelham Manor Shopping Center in Westchester County and projects in the Canarsie section and on Atlantic Avenue in Brooklyn, NY.

Joel Braun, VP of Acadia Realty, says that based on its partnership with Storage Post, the firm learned about that side of the real estate business and decided to significantly expand its self-storage portfolio when it learned of the Storage Post portfolio's availability. He says that Acadia will work to absorb the vacancies that now exist in the portfolio and later will go out into the market and look for additional self-storage acquisition candidates.