DENVER-A New York City company is selling its seven property self-storage Colorado portfolio for $20 million. The 3,010-unit portfolio of properties from Aurora to Avon in the Vail Valley represents the largest single sale of self-storage facilities ever to hit the market in the state, says Charles LeClaire, the Marcus & Millichap broker representing the seller, Bulgroup Properties LLC. Bulgroup owns more than two million sf of self-storage properties across the country. It acquired the Colorado projects, which were built from 1977 to 1984, during the past eight years, he says.

The portfolio is selling for $55 per sf, far below replacement cost, according to LeClaire. “I’ve seen units sell for $60 per sf, and up to $100 per sf,” he says. A decade ago, they were selling for $10 per sf.

LeClaire says he wouldn’t be surprised if there is a bidding war for the portfolio. He recently sold a seven-property self-storage portfolio in IL to three investors for a total of $31 million. That sale, with 413,513 sf of rentable space, represented one of the highest prices ever paid per sf paid for a self-storage portfolio, LeClaire says. He plans to contact those buyers, as well as losing bidders on the Illinois projects, for the Colorado portfolio. “Portfolios like this don’t come along very often,” LeClaire says. “And with Denver’s booming economy, self-storage units have very low vacancies.”

The returns from the units are so strong–and are so low maintenance–that owners seldom sell, he says. Because self-storage units seldom hit the market, most brokers don’t specialize in the niche, he explains. In addition to selling self-storage units, LeClaire owns a “state-of-the-art,” 60,000-sf, two-story, self-storage center in Las Vegas. That facility has three elevators, so people can avoid the heat to check on belongings.

“I don’t own anything in Denver, because I don’t want to compete with my clients,” LeClaire says. But LeClaire isn’t the only one in Denver in the business.

Denver businessman Buzz Victor, who heads Mini-Storage Cos., is known as the father of the self-storage business. In the early 1970s, he founded the Self Service Storage Association.”I went down to the office of what was then Mountain Bell, and I went through the Yellow Pages throughout the country, and I called everyone I could in the business,” he told “I think I found 104 storage facilities in the entire country.” He say the industry began around the oil fields in Texas in the late 1960s, springing up around new apartment complexes rented by oil workers.

As self-storage units started spreading across the country, people started to sell them as interim uses, that eventually would be replaced by “better and higher uses,” such as office buildings and hotels. “That was the idea, but you could probably count on one hand–and not use all your fingers–the number of times that happened,” Victor says. In many ways, the industry hasn’t changed during the past 30 years although he says they look nicer and more businesses use them.

Today, there are an estimated 30,000 storage facilities across the country. And from Sept. 28-30, Victor will be hosting the 25th annual Self Storage Association fall meeting in Downtown Denver, an event that is expected to draw 1,500 participants. “This has gotten to be a pretty sophisticated business,” Victor notes. He agrees with LeClaire that the Bulgroup portfolio is probably the largest ever put on the state’s market.

The largest deal, says Victor, is when he and a partner five years ago sold their portfolio of 25 facilities for about $85 million–but those properties were scattered across the country.

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