A Pandemic Space Race: Self-Storage Roars Back


Last fall, Blackstone acquired Simply Self Storage — with eight million square feet of rentable space — for $1.2 billion, adding to the $300 million it had already invested in the sector. And in April, Public Storage closed its $1.8 billion acquisition of ezStorage, adding 48 properties with 4.2 million of net rentable square feet.

With both investor interest and consumer demand high, Edison Properties, which owns Manhattan Mini Storage, was said to be exploring the sale of its division, which has 18 locations and 3.1 million square feet, for an estimated $3 billion, or nearly $1,000 per square foot, Bloomberg News reported.

Edison declined to discuss the sale, but the price tag is unsurprising, Mr. Sakwa of Evercore said, given the generally high cost of New York real estate.

Growth is largely in general units, but storage for extras like recreational vehicles and boats, as well as cold storage, has increased as well.

Despite the peak demand and frothy acquisition prices, “it’s not all rosy under the hood,” said Stephen Clark II of the Clark Investment Group in Wichita, Kan., which specializes in self-storage among other real estate classes. Rental statistics that show high occupancy can be misleading, he said, because they include a number of long-term renters whose rates trail the market.

And experts are unsure how postpandemic behavior will affect the industry. For instance, what happens when storage renters leave their parents’ homes or don’t need to use their second bedroom as a makeshift office?

But with home prices escalating nationwide, so-called starter homes have become more expensive and some new homeowners are opting for smaller spaces. That, Mr. Morales said, could translate into a steady demand for storage.

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