For an eye-popping $213 per square foot, CubeSmart has purchased a self-storage facility in Boston, MA. That per-square-foot amount is well beyond the $75 national average calculated by Marcus & Millichap for facility purchases over the past year.
CubeSmart, one of the country’s four publicly traded self-storage REITs, bought the 108,400-square-foot facility for $23.1 million. That’s about $22 million above what the previous owner paid for it 11 years ago.
The three-story facility, at 150 William F. McClellan Highway in east Boston, was converted from an industrial building by Quincy, MA-based The Grossman Companies in 2004. Until recently, Extra Space Storage had managed the facility for the owner.
We had a tremendous amount of interest in this property.
— Steve Mellon, managing director at JLL
David Grossman, head of acquisitions at Grossman, confirmed the sale to The SpareFoot Storage Beat. Grossman said the facility was the family-owned company’s only storage facility, but it was looking to buy another one. Grossman specializes in commercial real estate investment, management and brokerage.
Local property records show Grossman bought the industrial building in 2003 for $975,000. In converting it to a self-storage facility, Grossman added two stories to the building, which dates back to 1960.
The 1,097-unit facility sits on a little over 3 acres. Its physical occupancy is 91.6 percent and its economic occupancy is nearly 80.1 percent. Over the past 12 months, storage revenue at the facility has risen from $120,509 to $131,449 a month, an increase of 9 percent.
Grossman tapped JLL, formerly known as Jones Lang LaSalle, to market the property. Steve Mellon, managing director of JLL, brokered the deal.
“We had a tremendous amount of interest in this property,” Mellon said.
Bidders ranged from the four public REITs to local investors, he said. Mellon said the facility features modern amenities and strong demographics, and is in an area of residential growth. Within a three-mile radius of the facility, 2,623 apartment units are under construction and another 7,080 units are on the drawing board, according to JLL.
“Boston is just a thriving market,” Mellon said.
The deal brings the number of CubeSmart facilities in the Boston metro area to five.
According to recent research from Marcus & Millichap, Boston offers just 4 square feet of self-storage per person, well below the national average of 7.4 square feet per person.