In the past several months, U-Haul has racked up $60 million in self-storage real estate deals in mostly secondary markets — largely avoiding the top markets normally targeted by the public self-storage REITs.
A review of the recent acquisitions by The SpareFoot Storage Beat found that they are a mix of existing self-storage facilities and other types of buildings that are slated for conversion.
Eyeing U.S. and Canada
Carlos Vizcarra, president of Amerco’s real estate division, oversees acquisitions for U-Haul. Vizcarra told The SpareFoot Storage Beat that U-Haul is seeking new moving and storage locations in all U.S. and Canadian markets, not just the top-tier markets coveted by its competitors. Amerco, based in Reno, NV, is the parent company of Phoenix-based U-Haul.
Vizcarra said this strategy “enables us to enter markets that other large storage operators would not find economically viable.”
U-Haul has stores in all 50 states and 10 Canadian provinces aimed at do-it-yourself moving and storage customers.
In its latest real estate deal, U-Haul bought a vacant retail property near Dayton, OH, for $2.3 million. It will convert part of the property into a self-storage facility. The 94,433-square-foot building, at 6550-6660 Brandt Pike in Huber Heights, OH, was a Big Lots store.
U-Haul has begun offering truck, trailer and U-Box rentals at the Huber Heights site, with self-storage coming later.
Vizcarra said conversion is U-Haul’s preferred method of development for two reasons.
“First, it allows us to start serving customers in a fraction of the time it would take to complete a ground-up project,” he said.
Secondly, conversion projects support U-Haul’s sustainability initiative.
“Many of these buildings would otherwise be demolished to make way for new development, a major contributor to industrial and carbon waste,” Vizcarra said.
Elsewhere in the Midwest, U-Haul recently bought three storage facilities in Iowa. They were bank-owned properties sold as part of a defaulted CMBS loan.
The company paid $1.17 million each for the facilities at 6110 University Ave. in Cedar Falls and 1550 16th Ave. SW in Cedar Rapids, according to local property records. U-Haul paid $530,000 for the third facility, at 1923 E. Mitchell Ave. in Waterloo.
U-Haul plans to renovate the facilities, which feature traditional drive-up units.
The Cedar Rapids facility “will receive many renovations to bring it up to U-Haul company standards,” said Randy Dickson, marketing president for U-Haul’s Iowa region.
Formerly University Self Storage, the Cedar Rapids facility offers 41,308 square feet of storage in 11 single-story buildings. The facility also features an office and an apartment.
The Waterloo facility, which had been managed by Extra Space Storage, offers 40,142 square feet in three storage buildings.
“We are glad to be able to reuse these existing facilities, renovate them and offer a superior product to our customers,” Dickson said.
Retail rehab in Illinois
Continuing its efforts to repurpose vacant properties, U-Haul recently bought a 122,300-square-foot retail center in West Dundee, IL.
“The building was abandoned and in much need of repair,” said Jeffery Jones, general manager of the new U-Haul store at the former Spring Hill Fashion Corner shopping center.
U-Haul bought the bank-owned retail property in May for $3.65 million.
Below is a list of other real estate deals wrapped up by U-Haul over the past several months. While self-storage revenue represents a small portion of Amerco’s revenue, it is a growing business segment. In its most recent quarter, Amerco’s U-Haul unit added 13 storage facilities totaling close to 480,000 square feet.
According to Inside Self Storage, U-Haul is the third largest storage operator in the U.S., with nearly 1,600 facilities exceeding 42.7 million square feet.
City: Red Bluff, CA
Address: 2960 Main St.
Purchase price: $1.58 million
Purchase date: June 6, 2014
Details: The former Ford dealership (pictured in top photo) covers 32,000 square feet. At this time, storage isn’t available.
City: Woburn, MA
Address: 31 Olympia Ave.
Purchase price: $11.35 million
Purchase date: July 11, 2014
Details: The former headquarters of architectural supply company Charrette Co. encompasses 140,000 square feet. At this time, storage isn’t available.
City: San Juan Capistrano, CA
Address: 33033 Camino Capistrano
Purchase price: $5.6 million
Purchase date: May 21, 2014
Details: The former auto showroom covers 39,250 square feet. At this time, storage isn’t available.
City: Santa Clara, CA
Address: 2121 Laurelwood Road
Purchase price: $16.5 million
Purchase date: May 2014
Details: The former furniture warehouse and showroom comprises 193,536 square feet. At this time, storage isn’t available.
City: Johnson City, TN
Address: 2805 N. Roan St.
Purchase price: $2.2 million
Purchase date: June 2014
Details: The former gaming center covers 90,900 square feet. At this time, storage isn’t available.
City: Hickory, NC
Address: 331 U.S. Highway 70 SW
Purchase price: $3.86 million
Purchase date: June 17, 2014
Details: The 329,000-square-foot building was a furniture warehouse. At this time, storage isn’t available.
City: Tempe, AZ
Address: 1905 E. Apache Blvd.
Purchase price: $1.5 million
Purchase date: June 2014
Details: The 40,412-square-foot facility previously operated as Apache Self Storage.
City: Phoenix, AZ
Address: 9404 N. 19th Ave.
Purchase price: $3.35 million
Purchase date: June 2014
Details: The 78,000-square-foot facility previously operated as American Mini Storage.
City: Los Angeles, CA
Address: 5051 Rodeo Road
Purchase price: $5.46 million
Purchase date: June 23, 2014
Details: The former office building covers 72,800 square feet. At this time, storage isn’t available.
City: Williston, ND
Address: 5125 W. Frontage Road
Purchase price: Unavailable
Purchase date: August 2014
Details: The property features a 5,000-square-foot building and 3 acres of land. At this time, storage isn’t available.