By Jon Peterson
Buffalo, N.Y.-based Life Storage is expanding its presence in the greater Seattle market with two recent transactions where it acquired self-storage properties in Covington and Covington for $39.3 million, according to sources that are familiar with the sale of the properties. The already owns four other self-storage assets in the greater Puget Sound market, and this expansion shows the company’s continued interest in the sector.
The buyer was represented by Foundation Group Real Estate of Seattle. A person who worked on the sale was Isaac Chamberlin, a partner with the firm. The seller of the properties was a private individual and a local development firm, and the assets were sold in an off-market transaction.
Both of the properties have been developed over the past three years. The asset in Covington goes by the name of Raceway Heated Storage Covington. It is located at 26901 185th Avenue Southeast. The asset was sold for $19.3 million, according to industry sources. This property totals around 100,000 square feet, and it has a way to go before it reaches stabilization from an occupancy perspective.
The property in Auburn is located at 30402 132nd Avenue Southeast. It goes by the name of Raceway Heated Storage Auburn. The 80,000 square foot property was acquired for $20 million, as stated by sources that are familiar with the property. At the time of the sale, the occupancy in the property had reached the stabilization level.
Life Storage is a nationally publicly-traded investment firm focused on buying and managing self-storage assets. The company has properties that are located in 30 states and more than 900 locations. Its occupancy on the portfolio is at 92.9 percent.
The self-storage had performed relatively well since the global pandemic started in early 2020. Its rise has been bolstered not just by the widespread adoption of work-from-home policies, but also the rise of e-commerce, two market factors that are here to stay, according to a recent report by STORAGECafe, which tracks the metrics and fundamentals behind the industry.
“Self-storage provides a service that responds to people’s needs, and its resilience is a direct outcome of that fact,” said Mierela Mohan, of STORAGECafe. “Whether people moved, downsized or took on home improvement projects in 2020, self-storage was there to assist in a time of unprecedented life changes.”
Nationwide, many of the top ten markets for the self-storage industry are increasingly dense metropolitan areas, the Puget Sound region. The Seattle-Tacoma-Bellevue market was also highlighted as one of the busiest for self-storage. Since 2017, deliveries in the region have doubled year-over-year. In 2019, the market saw 1.36 million square feet of self-storage space constructed. The market is also one of the most expensive in the country, with a street rate of $153 per square foot. Portland was also ranked highly, with 1.2 million square feet of inventory added in 2020. Last year, the average storage unit rented for $139 per month in 2020.
