Public Storage, the country’s largest self-storage operator, has closed on the $26 million purchase of a five-facility portfolio in the Charlotte, NC, area.
The acquisition adds about 385,000 square feet to an existing footprint of 29 facilities in the Charlotte area. The seller comprises three entities affiliated with ENSI Development Corp. in Sarasota, FL. The facilities previously operated as Budget Self Storage and briefly were managed by Uncle Bob’s Self Storage.
The investment group operates nine facilities in the Tampa, FL, area and some in Canada as well.
Richard Bennett, a principal of the 20-member ownership group, said Public Storage reached out to the group about buying the properties.
“They are on a big acquisition binge because of cheap money,” Bennett said of Public Storage, one of four publicly held self-storage REITs in the U.S. “We were quite happy to proceed with what we were doing, but they made us an offer we couldn’t refuse.”
Bennett said that he and his son, Jamie, started assembling the portfolio about 15 years ago. The investor group developed two of the Charlotte facilities, and it purchased the three others.
With proceeds from the sale, the investor group will seek acquisition and development opportunities in Florida and North Carolina, according to Richard Bennett.
The North Carolina facilities purchased by Public Storage are:
- 4730 N. Tryon St., Charlotte
- 5641 Sharon Amity Road, Charlotte
- 4025 E. W.T. Harris Blvd., Charlotte
- 7112 Albemarle Road, Charlotte
- 9026 Crump Road, Pineville
Public Storage loses facility to commuter rail expansion
While Public Storage has picked five facilities in the Charlotte area, it recently lost an existing facility to the City of Charlotte. The city condemned a 650-unit Public Storage facility at 5448 N. Tryon St. that was in the path of a planned extension for its commuter rail line.
Initially, Charlotte offered Public Storage $4.1 million for the property. The REIT then hired attorneys Stephanie and George Autry of law firm Cranfill Sumner & Hartzog to negotiate a better deal.
“At issue in the Public Storage case was a disagreement between appraisers as to the capitalization rate for the storage facility,” Stephanie Autry said.
City appraisers had based the value on a 9.5 percent cap rate. Public Storage’s appraiser, Richard Marchitelli of Cushman & Wakefield, valued the property at $6.3 million based on a cap rate of 6.25 percent.
After a period of back-and-forth with the city, Public Storage eventually secured a settlement of $5.75 million — $1.5 million more than the initial offer.
“Our willingness to take this matter to court, combined with the information provided by the appraisers and industry experts we retained for our client, caused the City of Charlotte to increase their offer by more than 40 percent,” Autry said.