Hines Pays $91M for SoCal Self-Storage, the Most Ever for One Property
The sellers and their brokers say the sale is the largest of a single asset in the sector
By Nick Trombola October 2, 2024 7:46 pm
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A self-storage facility in southwest Los Angeles County has traded hands in what brokers at CBRE (CBRE) say is the largest single-asset self-storage sale in history.
A joint venture between L.A.-based self-storage developer Capital 360 and Charlotte, N.C.-based investment firm Barings sold the three-story, 260,273-square-foot Extra Space Storage to Hines for $91 million. CBRE’s Nick Walker and Trevor Roberts represented the sellers.
Built in 2020, the facility is at 17900 Crusader Avenue in Cerritos, Calif., with nearly 2,500 storage units. It was 88 percent occupied at the time of the sale.
A representative for Hines did not immediately respond to a request for comment.
Despite the record sale, growth in the self-storage market slowed down in the first half of this year due to declining rent prices and occupancy drops, according to an August report from Yardi Matrix. Average national asking rents decreased to $16.40 per-square-foot per year in July, a drop of 4.1 percent year-over-year, though that percentage decline is marginally better than the 4.9 percent year-over-year drop seen in June and the 4.5 percent drops seen between March and May, per the report.
Still, Brian Shniderson, CEO of Capital 360, said that the slowdown was “micro-market specific,” pointing to cities such as Denver and Phoenix that have seen declines in demand stemming from supply surplus. Yet demand for self storage in dense urban areas where zoning for such facilities is difficult to obtain, such as Central Los Angeles, is a different story, Shniderson said.
“It’s really hard to source the right property here … Southern California is just a tough place to develop in general,” Shniderson told Commercial Observer, indicating that that’s why the right facility in the right place is so competitively priced.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
