SmartStop Self Storage is in the final stages of purchasing a 32-property portfolio for $145 million — the largest acquisition ever made by the family of non-traded public REITs.

“This acquisition will increase our footprint in new markets such as Colorado, Michigan, Washington and Washington DC, in addition to fueling our ongoing expansion through the United States,” said Michael Schwartz, chairman and CEO of SmartStop.

To date, SmartStop’s affiliated REITs have purchased 27 properties from entities associated with Long Beach, CA-based DSI Properties. Deals for the five other properties are scheduled to close later in the first quarter.

The 32 facilities are located in prime retail locations within growth markets offering excellent demographics.
— Wayne Johnson, chief investment officer at SmartStop Self Storage

Dahn Corp., under the Mini U Storage brand, previously managed the facilities. DSI and Dahn developed most of the facilities in the 1970s and 1980s, while a small portion were acquired by DSI from other operators.

The 32-facility portfolio covers 1.9 million rentable square feet and contains about 18,000 units.

Years in the making

Dean Keller, president of Laguna Beach, CA-based Bancap Self Storage Group, was the sole broker in the SmartStop deal. Keller said he started marketing the portfolio for DSI about two years ago and secured a contract with SmartStop in the summer of 2014.

“A lot of people were interested,” Keller told The SpareFoot Storage Beat. “All the big guys took a look at it, and all the regional guys took a look at it.”

Santa Ana CA storage
SmartStop Self Storage bought this former Mini U Storage facility in Santa Ana, CA.

The deal took several months to close because the facilities were owned by different partnerships involving hundreds of individual investors, according to Keller.

“They owned these properties for a long time, and the investors have done very well. It was time to move on,” he said.

DSI will remain in the self-storage business, according to Keller. The company still owns about a dozen facilities.

Key markets

The newly added SmartStop facilities are in both new and existing markets for the self-storage operator. More than half of the facilities are in California. SmartStop is based in Ladera Ranch, CA.

“The 32 facilities are located in prime retail locations within growth markets offering excellent demographics,” said Wayne Johnson, chief investment officer at SmartStop.

Dean Keller
Dean Keller, president of Bancap Self Storage Group, brokered the SmartStop deal.

The transaction was divided into several pieces, the first of which closed in January. The SpareFoot Storage Beat previously reported on 26 of the facilities being put under contract by Strategic Storage Trust II. Strategic Growth Trust Inc. is acquiring the six other properties.

According to documents filed with the U.S. Securities and Exchange Commission, SmartStop tapped a new $71 million credit facility from KeyBank and Texas Capital Bank to finance the portfolio acquisition.

Here are the 32 facilities.

California

  • 7211 Arlington Ave., Riverside: 610 units, 60,100 square feet.
  • 6667 Van Buren Blvd., Riverside: 570 units, 61,000 square feet.
  • 1111 W. Gladstone St., Azusa: 660 units, 64,400 square feet.
  • 10231 S. Colima Road, Whittier: 510 units, 58,600 square feet.
  • 2234 Arrow Highway, La Verne: 520 units, 49,800 square feet.
  • 7611 Talbert Ave., Huntington Beach: 610 units, 61,000 square feet.
  • 580 East Lambert Road, La Habra: 420 units, 51,400 square feet.
  • 43745 Sierra Highway, Lancaster: 700 units, 64,700 square feet.
  • 517 N. Eighth St., Lompoc: 430 units, 46,500 square feet.
  • 404 Potrero Grande, Monterey Park: 390 units, 31,200 square feet.
  • 4200 Westminster Ave., Santa Ana: 840 units, 84,500 square feet.
  • 1571 W. Foothill Blvd., Upland: 610 units, 56,500 square feet.
  • 1401 Enterprise St., Vallejo: 510 units, 54,400 square feet.
  • 3937 Santa Rosa Ave., Santa Rosa: 1,150 units, 116,400 square feet.
  • 2998 Rockville Road, Fairfield: 440 units, 41,000 square feet.
  • 7760 Lorraine Ave., Stockton: 560 units, 49,100 square feet.
  • 3860 Benatar Way, Chico: 360 units, 38,800 square feet.

Colorado

  • 3850 Airport Road, Colorado Springs: 680 units, 61,800 square feet.
  • 435 Airport Blvd., Aurora: 890 units, 87,400 square feet.
  • 8920 Federal Blvd., Federal Heights: 450 units, 40,600 square feet.
  • 3757 Norwood Drive, Littleton: 400 units, 45,800 square feet.

Illinois

  • 1302 Marquette Drive, Romeoville: 680 units, 66,700 square feet.
  • 1001 Toll Gate Road, Elgin: 410 units, 49,600 square feet.
  • 240 W. Army Trail Road, Bloomingdale: 570 units, 58,200 square feet.
  • 4747 W. Calumet-Sag Road, Crestwood: 460 units, 49,300 square feet.

Maryland

  • 4100 Forestville Road, Forestville, MD: 530 units, 55,200 square feet.

Michigan

  • 42557 Van Dyke Ave., Sterling Heights: 460 units, 57,900 square feet.
  • 262 E. Maple Road, Troy: 730 units, 82,200 square feet.
  • 27203 Groesbeck Highway, Warren: 500 units, 63,100 square feet.
  • 24623 Ryan Road, Warren: 490 units, 52,100 square feet.

New Jersey

  • 4233 Route 130 South, Beverly, NJ: 460 units, 51,000 square feet.

Washington

  • 10919 Evergreen Way, Everett: 490 units, 48,100 square feet.
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Alexander Harris