Heitman LLC has snagged a total of $475 million under its Core Plus strategy that's focused on investments in self storage assets across the nation. This includes $275 million in commitments and a co-investment worth $200 million.
Already, Heitman, under the strategy, has acquired 79 self storage assets spanning 16 states. The Chicago-based firm expects that the roughly 4.9 million rentable square foot portfolio will continue to generate revenue growth. Also, it noted that the portfolio allows for an additional 550,000 square feet of expansion potential.
It's unclear if any specific regions in the U.S. will be targeted, but Heitman will prioritize properties with "stabilized, lease‑up, and selective development" that generate strong cash flow.
Across self storage nationally, supply is starting to cool down. StorageCafe data estimatesthat about 55.4 million square feet of supply will hit the market this year, which would be nearly flat with 2025.
"We believe today represents an attractive entry point. Assets can be acquired well below replacement cost, new supply is declining, and market rents remain well below levels required to incentivize new construction," Jen Boss, head of portfolio management at Heitman, who is also managing the portfolio for the strategy.
"The demographic outlook is also favorable, driven by the aging of Millennials and their Baby Boomer parents, both cohorts entering life stages that historically increase demand for self-storage. Our acquisition of a large, diversified seed portfolio at launch reflects this long-term conviction."
Since July 1996, Heitman has invested in 1,600 self storage assets across 14 different countries worldwide, representing more than $15 billion in commitments.
The $475 million in funding today comes after the company raked in $2 billion under the close of its Heitman Value Partners Fund VI. The fund, which has a deployment capacity of $6.55 billion, is targeting alternative CRE sectors such as self-storage, student housing, senior housing and medical office, as well as traditional ones like multifamily and industrial.
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