A five-facility self-storage portfolio in the New York City, NY, market that just went on the market could fetch at least $200 million.
Competition for the portfolio is expected to be fierce. Mike Mele, vice chairman of Cushman & Wakefield, which has the listing, told the SpareFoot Storage Beat that he anticipates at least eight to 10 bidders will vie for the portfolio. Bids are due in late November.
“There has not been a self-storage portfolio of this quality and scale in New York City on the market in over a decade, presenting an extremely rare opportunity for all qualified investors,” Mele said in a news release.
Although the portfolio doesn’t carry a price tag, Mele believes it could sell for more than $200 million.
“A portfolio like this will not only attract the usual self-storage buyers such as REITs, hedge funds, private equity funds and family offices, but because it is in New York and has good size, we expect to see pension funds, sovereign wealth funds and wealthy private individuals in New York who have been clamoring to get into self-storage for some time,” he told the SpareFoot Storage Beat.
New builds, high valuations
Cushman & Wakefield’s national Self Storage Advisory Group, led by Mele, is marketing the 5,593-unit portfolio on behalf of New Hyde Park, NY-based SNL Development Group LLC. Williamsville, NY-based self-storage REIT LifeStorage manages the facilities, which were completed between 2017 and 2019. The properties — in the Bronx, Brooklyn and Queens — span 297,395 rentable square feet.
“The New York City market is still very undersupplied when it comes to self-storage,” Mele said. “With limited competition, new laws prohibiting self-storage development and continuing demand for self-storage in New York’s outer boroughs, each of these five properties is extremely well-positioned for future success.”
As of September 2019, under-construction or planned self-storage facilities represented 17.7 percent of existing inventory in the New York City market — one of the most elevated construction levels in the country, according to data provider Yardi Matrix. Ground-up development in the metro area is constrained by a lack of available land and by citywide restrictions on new self-storage projects.
The SNL-owned portfolio is “the most exciting deal I have worked on in my 20-plus-year career,” Mele told the SpareFoot Storage Beat. “To have a portfolio of this quality in the boroughs of New York is unheard of.”
Here are the five New York City facilities that are being sold:
- 134-31 Merrick St., Queens. 1,317 units, 74,823 net rentable square feet.
- 4139 Boston Road, the Bronx. 1,323 units, 66,727 net rentable square feet.
- 1200 McDonald Ave., Brooklyn. 1,073 units, 56,109 net rentable square feet.
- 1690 E. New York Ave., Brooklyn. 1,038 units, 53,113 net rentable square feet.
- 1430 Bruckner Blvd., the Bronx. 842 units, 46,623 net rentable square feet.