Top 5 Self Storage Markets for Transaction Activity
- Mar 01, 2021
Last year saw substantial activity from self storage investors across the country, with more than $3.6 billion in deals closed, according to Yardi Matrix. Although the overall investment volume slightly slid from the nearly $4 billion recorded in 2019, some markets that experienced pent-up demand due to the COVID-19 crisis saw an uptick in buyer interest.
The table below highlights the top five self storage markets with the highest overall transaction volume in 2020, based on Yardi Matrix data. The metros on the list account for more than a quarter of total investment activity.
|Rank||Market||Total Square Feet Sold||Avg. Price Per Square Foot||Transaction Volume (MM)|
Source: Yardi Matrix
Self storage transaction volume in Phoenix totaled more than $126 million in 2020. Although investors remained active during the lockdown period, the pandemic slowed down overall sales activity in the metro, with investment sales dropping 18.4 percent compared to 2019, when 22 facilities traded for almost $155 million. In 2020, a total of 14 facilities changed hands, encompassing more than 1.7 million square feet of storage space.
Blackstone expanded its Phoenix footprint with the acquisition of a two-property portfolio encompassing 118,840 square feet. Wentworth Property Co. sold the facilities for nearly $13 million. Overall, Public Storage closed the largest deal in the metro—the REIT purchased a two-property portfolio for a combined $30.5 million from NorthPoint Development in December 2020.
4. San Diego
San Diego saw nearly $129 million in closed self storage deals in 2020, more than double the $53 million recorded in 2019. Investors traded eight facilities totaling 689,508 square feet of storage space. The average per-square-foot price, however, slid from $242.6 in 2019 to $186.8 in 2020.
The most notable deal was completed by Public Storage—the company paid nearly $55 million to Wentworth Property Co. for two properties comprising more than 260,000 square feet. In another major transaction, Invesco spent $34 million on a single property encompassing some 119,000 square feet of storage space.
READ ALSO: Self Storage and the COVID-19 Factor
Transaction volume in Tampa amounted to roughly $138 million, down 13.1 percent compared to 2019, when 23 facilities changed hands for nearly $159 million. While the total number of square feet sold slipped from around 1.5 million to approximately 1.3 million, the average per-square-foot price slightly increased from $106.9 in 2019 to $107.5 in 2020.
Buyers remained cautious at the onset of the health crisis, however, with investment activity picking up pace in July and accelerating until the end of the year. Seven of the 16 sales recorded in 2020 closed in December—one of the more notable deals was the The William Warren Group’s $12 million acquisition of an 88,000-square-foot facility.
More than 1.6 million square feet of storage space traded in Atlanta for nearly $148 million in 2020. Investment last year was substantially higher than in 2019 when some 933,000 square feet changed hands for nearly $95 million. In 2020, a total of 19 facilities sold for an average of $91 per square foot.
The largest influx of capital was recorded in suburban Atlanta, with nearly $100 million in self storage assets changing hands. Overall, the biggest investor in Atlanta was CubeSmart—the firm acquired four properties encompassing 379,662 square feet.
1. New York
New York tops our list with more than $615 million in self storage deals closed in 2020. This represents a 34 percent uptick from the $460 million traded in 2019. A total of 23 properties sold in 2020, comprising nearly 1.8 million square feet. The average per-square-foot price jumped from $247.7 in 2019 to $328.9 in 2020.
The heightened investment activity in the metro comes as no surprise, as pandemic-driven relocations have boosted demand for storage space. The most notable deal in the metro was completed by CubeSmart—the company purchased an eight-property portfolio totaling 780,425 rentable square feet across Queens, Brooklyn and the Bronx. Storage Deluxe sold the portfolio for $540 million.