Thanks to the good performance of the self-storage sector over the past year, investor interest in this asset class continues to grow. Nationally, nearly 30 million square feet of storage space traded from the start of the year through June for a total of $ 2.5 billion, according to data from Yardi Matrix. This is an 88% increase from the same period in 2020, when total sales volume was $ 1.4 billion.
The table below highlights the top five self-storage markets with the highest overall transaction volume since the start of the year through June, based on Yardi Matrix data. The subways on the list represent more than a quarter of total investment activity. The top five markets all saw a significant increase in volume this year compared to 2020.
|Rank||Marlet||Total square feet sold||Avg. Price per square foot||Trading volume (MM)|
|1||new York||1,428,986||$ 254.7||$ 260.8|
|2||Phoenix||1 332 488||$ 151.2||$ 201.5|
|3||Washington DC||729,043||$ 231.2||$ 168.6|
|4||Chicago||1,686,574||$ 81.7||$ 135.2|
|5||Miami||796,829||$ 132.4||$ 105.5|
Source: Matrix Yardi
Miami trading volume was nearly $ 106 million from the start of the year through June. Although selling activity was significantly higher than the roughly $ 38 million closed in the same period last year, investor appetite has yet to regain its pre-pandemic levels. During the first half of 2019, 19 establishments changed hands for $ 387 million, 72.7% more than the volume of transactions recorded this year.
A total of seven properties were sold in the first half of 2021, totaling 769,829 square feet of warehouse space. The metro’s largest buyer was Tarco Properties – the company paid more than $ 35 million for two facilities totaling 258,318 square feet. The company has more than 1.8 million square feet of storage space in Miami.
Investment stagnated in Chicago at the start of the pandemic, with just over $ 5 million in self-service storage agreements concluded from January to June 2020. While some of the uncertainty has subsided. dissipated, investors closed an additional $ 75 million in the third and fourth quarters.
As self-storage fundamentals continued to improve in Chicago, investor interest accelerated in 2021. Nearly 1.7 million square feet of storage space traded for more than 135 million of dollars since the beginning of the year until June. In total, 15 properties sold for an average of $ 81.7 per square foot, up from $ 75.8 the previous year.
3. Washington, DC
Some 729,000 square feet of storage space changed hands in Washington, DC for nearly $ 169 million from the start of the year through June. Investment this year was significantly higher than the $ 46 million recorded during the same period in 2020. In the first half of this year, eight properties traded on average at $ 231.2 per square foot, up up 30.8% from the $ 176.8 recorded last year.
Public Storage has expanded its presence in Washington DC with the acquisition of a portfolio of three properties covering 330,905 square feet, valued at nearly $ 131 million. The properties are part of Public Storage’s $ 1.8 billion acquisition of ezStorage, a portfolio of 48 self-storage properties located in Washington, DC, Virginia and Maryland.
Phoenix has recorded nearly $ 202 million in self-service storage agreements closed since the start of the year through June. This is a huge increase from the roughly $ 53 million traded in the same period last year, and even exceeds the $ 138 million closed throughout 2020. So far, 14 facilities comprising over 1.3 million square feet of storage space changed hands for an average of $ 151.2 per square foot, significantly above prices of $ 103.9 and $ 96.7 per square foot recorded during the same period in 2020 and 2019.
The metro’s biggest buyer was Barker Pacific Group – the company bought a portfolio of three properties totaling 296,988 square feet for $ 40 million from Titan Development. Hartford Financial Services Group provided financing of $ 25.1 million for the acquisition of the properties.
1. New York
New York tops our list with roughly $ 261 million in self-storage deals from January through June of this year. This is almost double the $ 139 million traded over the same period in 2020, and 7.5% more than the $ 243 million recorded before the pandemic in 2019. In total, 19 facilities were sold to the first half of the year, of which more than 1.4 million. square feet. The average price per square foot also fell from $ 183.2 last year to $ 254.7 in 2021.
The largest influx of capital was in Queens, with more than $ 126 million in self-storage assets changing hands. The most notable transaction was made by CubeSmart – the REIT paid $ 90 million for a 155,853 square foot property.