Inland Real Estate Takes Majority Stake in Self Storage Operator
The two companies have been partnering since 2018.
former K-Mart in Allentown, Pa., into a self storage
facility. Image courtesy of Yardi Matrix
The Inland Real Estate Group of Cos. has agreed to purchase a majority interest in Devon Self Storage Holdings, a national self storage operator currently managing 202 properties and approximately 109,000 units nationwide. Since its foundation in 1988, Devon has owned, managed and developed more than 350 self storage facilities in 27 U.S. states and three European countries.
Through this acquisition, Inland will provide more capital and the necessary infrastructure in order to expand Devon’s third-party management and development platform.
Inland entered the self storage sector in 2016; its current portfolio, spanning 30 states, is valued at $1.7 billion. The Oak Brook, Ill.-based company launched its platform through a joint venture with Metro Storage and has since expanded through various strategic partnerships.
Inland and Devon’s 2023 projects
Inland began working with Devon Self Storage in 2018; in 2020, the two companies partnered with the purpose of redeveloping and operating self storage properties in Qualified Opportunity Zones.
Last year, the two firms began the redevelopment of several properties which have been transformed into self storage facilities. The first phase of the project, involving a 91,787-square-foot former K-Mart in Allentown, Pa., came online early 2023. Around that same time, Inland and Devon repurposed a former Sports Authority location into a 64,000-square-foot self storage facility in Hazlet, N.J.
In the fourth quarter of 2023, the partnership completed the conversion of a manufacturing facility located 13 miles from downtown Detroit. Another recent project, which marked the ninth redevelopment delivery, was the transformation of a former newspaper processing facility in Springfield, Mo.
Self storage market not left unscathed
Self storage demand increased during the COVID-19 pandemic and in the following period. The sector has rapidly expanded, although high interest rates and construction costs have presented some challenges of late.
The sector has also been impacted by the slowdown in the housing market which has decreased the self storage’s occupancy rates, bringing them back to pre-pandemic levels as of November, a recent Yardi Matrix report shows. The annual and monthly street rate growth has remained mostly negative across the markets tracked by Yardi Matrix.
