A 23-year-old self-storage facility outside Pittsburgh recently was scooped up by one of the world’s largest oil companies.
Royal Dutch Shell bought Cubbyhole Self Storage in Beaver County, PA, for $1.87 million. Cubbyhole, which sits on nearly 5½ acres, features 50,000 square feet in more than 380 units.
Shell did not snap up the facility to break into the self-storage industry; the property sits next to the proposed site of a $5 billion ethane cracker plant. As explained by “The Allegheny Front” radio program, an ethane cracker takes ethane, a component of natural gas, and processes, or “cracks,” it into ethylene. Ethylene is a common petrochemical.
The state has offered $1 billion in tax breaks to Shell to build the factory, which could generate up to 10,000 construction jobs. Construction of the plant isn’t a done deal, but the purchase of Cubbyhole signals that Shell is a step closer.
Self-storage retirement plan
Cubbyhole owner Gay Shinaberry, 81, said the deal with Shell offered a good opportunity to retire. Shinaberry owned a hardware store when he decided to build the facility more than two decades ago.
“I had no pension plan,” he said. “This is my pension plan.”
It turned out to be a good investment. Shinaberry said Shell approached him with an offer he couldn’t turn down. He said he wasn’t actively seeking to sell his facility, which was nearly full.
Before 2008, Shinaberry said, the facility was completely full. During the recession, he said, people started to vacate some of the 5×10 units, but larger units still were in high demand.
“The big ones always had a waiting list,” Shinaberry said.
All but two tenants have vacated Cubbyhole Self Storage, and the exodus has the phones ringing off the hook at nearby mom-and-pop facilities.
“We’ve been flooded with calls during the last three months,” Center 4 Storage owner Glen Brobeck said.
Center 4 operates 200 units spread across three facilities in the area and no more room for Cubbyhole tenants — or anyone else. “We stay pretty full all the time,” Brobeck said.
Despite the strong demand, Brobeck isn’t looking at developing more space.
“The way I am, I build on the lots I have and there is not much room for expansion. Everyone thinks it’s easy to go out and build, but it isn’t,” Brobeck said.