Harrison Street Acquires 19 Self Storage Properties
The assets are located throughout the Southeast.
Harrison Street has acquired an off-market self storage portfolio comprising 19 Southeast properties totaling 1.4 million square feet for a purchase price exceeding $200 million.
The portfolio includes over 12,000 self-storage units in growing submarkets in Georgia, Alabama, Florida, North Carolina and South Carolina. The identity of the seller could not immediately be learned.
The portfolio has averaged 90 percent occupancy over the past 12 months, with recent expansions made at six locations to meet excess customer demand. The facilities include a mix of climate-controlled and non-climate-controlled spaces, designed to offer a variety of price points depending on customer needs.
Harrison Street’s established self-storage partner, Reliant Real Estate Management, will manage the properties under its Midgard Self Storage brand. Reliant is a vertically integrated commercial self-storage operator based in Georgia.
Midgard has significant scale in the southeastern U.S. Harrison Street and Reliant have worked together since 2015 and currently own and operate 65 properties through their joint venture partnership.
Since its inception in 2005, Harrison Street has invested over $3.5 billion in approximately 322 storage assets, comprising more than 210,000 units in 30 states and provinces in the U.S. and Canada. The firm has realized investments in 163 storage properties for a gross transaction value of $1.7 billion.
One recent transaction was SmartStop Self Storage’s acquisition of a two-property self-storage portfolio. Morningstar Storage sold assets in Virginia and North Carolina. The Morningstar Storage Portfolio spans 1,033 units across 112,707 rentable square feet.
Signs of improvement
The year-over-year advertised rate declines in self storage began to show improvement in July after worsening through much of the year’s first half, Doug Ressler of CommercialEdge. Same-store advertised rates for main-size NCC units nationwide decreased 3.7% year-over-year in July, up from -4.4% in June and -4.1% in May.
While same-store advertised rates performed slightly worse for climate-controlled units of the same size, falling 4.7% in July compared to 2023, this is an improvement from its second-quarter average of -5.1%. The self storage REITs continue to be more aggressive on rates, with same-store advertised rents at stabilized properties down 5.3% year-over-year in July versus -3.7% for their non-REIT competitors.
However, this is a substantial improvement from June, when advertised rate growth for all REITs was -7.2% year-over-year. After being very aggressive in dropping advertised rates last fall, REITs will likely face easier year-over-year comparative rates throughout the second half of the year.
“Look for more owners to purchase portfolios now in anticipation of future growth,” Ressler said.
