Morgan Stanley Refinances SoCal Self-Storage Portfolio

A California self-storage company has secured refinancing for five properties at an inflection point for the niche real estate sector.

Morgan Stanley provided $64 million for the portfolio owned by operator SoCal Self Storage, property records show. Talonvest Capital arranged and announced the fixed, 10-year, interest-only, nonrecourse permanent financing, but did not disclose the name of the lender.

The portfolio includes 3,643 storage units totaling 344,616 net rentable square feet. Four properties are in the Southern California markets of Hollywood and Northridge in Los Angeles, as well as Pasadena and Rancho Santa Margarita. A fifth location is in Sacramento.

Talonvest’s Eric Snyder, Kim Bishop, Mason Brusseau and Lauren Maehler facilitated the financing and said the self-storage properties demonstrate strong fundamentals, including consistent occupancy and durable cash flow.

However, the nationwide self-storage boom is running into speed bumps as oversupply, slower migration and local pushback reshape the sector. Despite record usage and ongoing development, U.S. self-storage occupancy has softened and municipalities are restricting new facilities, making existing developments more valuable.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.