More funds are investing in this space.
Self-storage owner and manager Storage Post is receiving $500 million in capital from a fund sponsored by Almanac Realty Investors, a business unit of Neuberger Berman.
The company will use the funds to accelerate its acquisition of self-storage assets in the most attractive markets in the US.
Storage Post’s vertically integrated investment strategy involves acquisitions, repositioning, and development.
Redimere Advisors LLC was exclusive advisor to Storage Post. Ankh Real Estate Inc. acted as a subadvisor to Redimere.
‘Horsepower and Momentum’ Driving Interest
Dana Summers, Senior Director at Stan Johnson Company, tells GlobeSt.com that this capital infusion “further exemplifies the horsepower and momentum we’re seeing in the self-storage space. It’s just another example of institutional capital making a big bet on the self-storage sector and putting $500 million behind a proven industry-leading storage owner in an effort to grow their portfolio and solidify their position in the industry.
“Furthermore, this shows how the storage industry has become much more mainstream and much more sophisticated with institutional players and capital. There is large income potential in the industry with very low overhead, and this has caused the largest of institutional investors to look at this space if they aren’t already in it.”
Smaller investors are interested in the space as well, says Steven Weinstock, national director with Marcus & Millichap’s Self-Storage Division. “We continue to work with an influx of private clients looking to expand their footprint in the self-storage space as they grow from small to high-net-worth organizations through the acquisition and management of these institutional-quality assets,” he tells GlobeSt.com.
An ‘Extremely Resilient’ Asset Class
Cory Sylvester, Principal at DXD Capital, tells GlobeSt.com that institutional capital is looking for an opportunity in self-storage “as it has shown to be an extremely recession resilient asset class, along with seeing unprecedented growth since the onset of the pandemic.”
Because the equity checks on a deal-by-deal basis tend to be much smaller than traditional real estate asset classes, these institutional players are looking for partners who can execute at scale, Sylvester said.
“We are seeing that trend in our business, and it has become evident with the recent string of announcements that institutional capital is aggressively seeking a partner in the space.”