Second half of the year featured strong performance in the sector, which stalled along with the economy at large during Q2 2020
SANTA BARBARA, Calif., Jan. 21, 2021 – The self storage industry demonstrated its resilient nature, especially during economic downturns, gaining the attention of major investors as transaction volume rebounded in the late 2020. That’s according to the latest transaction bulletin on the sector from Yardi® Matrix.
Self storage fundamentals remain healthy to start 2021, as street rates continue to rebound, and development remains steady nationwide. The number of sales nationwide decreased in the first three quarters of 2020 compared to 2019. The second quarter saw the largest drop in national sales activity year-over-year, falling 70.8% year-over-year from 267 transactions in 2Q19 to 78 in 2Q20. The velocity of self storage investment activity nationwide picked up again in July (38 sales), continued to accelerate in August (62 sales) and remained strong in September (56 sales). While the total sales dollar volume year-over-year decreased 37.7% in the third quarter, the number of sales nationwide saw only a 14.3% decline compared to the third quarter of 2019.
Additionally, the national average price per square foot for storage acquisitions also made a major rebound by summer. In August, price per sf was up 33.4% year-over-year. It dipped in September, but only by a minor 5.2% year- over-year as the third quarter came to an end. And it again recovered in the first two months of the fourth quarter—up 2.4% year-over-year in October and 5.5% year-over-year in November.
Investors such as the Blackstone Group started to take notice of and show greater interest in the industry, the bulletin notes. Specifically, Blackstone Group’s Blackstone Real Estate Income Trust entered into an agreement to acquire Simply Storage Management LLC, d/b/a Simply Self Storage, from Brookfield Asset Management Inc. for roughly $1.2 billion in the final quarter of 2020. Simply Self Storage is a private owner and operator with an 8 million-square-foot a portfolio across the United States.
“The expanding pool of investors interested in buying self storage assets helped bolster prices in the beginning of 2020—year-over- year, average sale prices per square foot nationwide in 2020 were 58.1% higher in January, 23.0% in February, 19.0% in March and 56.0% in April,” Matrix analysts report.
Dive deeper into self storage data in the Yardi Matrix Self Storage Bulletin for January.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, student housing, industrial, office and self storage property types. Email [email protected], call (480) 663-1149 or visit yardimatrix.com to learn more.
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