KKR Enters Self Storage Market With $36M Buy

Motivated by the sector’s resilience and growing demand, the company acquired three facilities located in the South.

Image by Self Storage via Wikimedia Commons

KKR has purchased three self storage facilities in Austin, Texas, and Nashville, Tenn., in two separate transactions totaling $36 million. Built between 2019 and 2020, the assets have a combined unit count of 1,800.

The acquisition marks KKR’s first foray into the self storage market. The company is looking to grow its new portfolio in the following years, motivated by the sector’s resilience and growing demand, Roger Morales, KKR partner & head of Commercial Real Estate Acquisitions in the Americas, said in prepared remarks.

Meanwhile, KKR continues to expand its multifamily footprint. Earlier this month, the company acquired a 332-unit community in Scottsdale, Ariz., bringing its Phoenix-area portfolio to roughly 2,600 units.

Positive growth in Austin, Nashville

According to a recent Yardi Matrix report, the self storage sector in Austin and Nashville experienced no shift in construction and planning activity in June compared to the previous month. Development activity kept at 5.3 percent and 7.6 percent, respectively.

Rent rates increased in both metros year-over-year in June. Street rates in Austin rose 12 percent for 10×10 non-CC units and 18 percent for 10×10 CC units—among the highest in the country, surpassing the national average of 10.6 percent for 10×10 non-CC units and 12.7 percent for CC units of similar size.

Meanwhile, annual street rate performance in Nashville saw moderate growth, with an increase of 8 percent for non-CC units and 7 percent for CC units.

Read the full Yardi Matrix National Self Storage report for the month of July.

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