By Jack Stubbs
As the Puget Sound region continues to grow, local and out-of-state firms continue to seek investment opportunities further afield to expand their portfolios.
On October 15th, Meritt Hill Capital, a Brooklyn, NY-based real estate investment firm that acquires, develops and manages self-storage facilities across the U.S., recently added an eight-building self-storage facility in North Bend—a city roughly ten miles east of Issaquah—for $12.7 million, King County records show. The seller of the property was Eastside Self Storage LLC, an entity that shares the same address as Gig Harbor-based Bowlds Construction LLC.
The Eastside Self Storage property, located at 1410 Boalch Ave. NW, is comprised of eight mini warehouse buildings that total approximately 48,000 square feet, according to public documents. Built in 2005, the buildings sit on roughly six acres. The self-storage facility is close to access to State route 202 and I-90, which connects North Bend with Issaquah and Renton to the west.
Founded in 2016, Merit Hill Capital has offices in Brooklyn, New York and Dallas, Texas, and works with third-party property managers like CubeSmart and Extra Space Storage to operate its properties, according to the company’s web site. Merit Hill Capital focuses on value-add and expansion-potential opportunities, from single facilities from $2 million to large portfolio offerings.
In mid-September 2019, New York-based Life Storage Inc., a REIT that acquires and manages self-storage facilities nationwide, purchased three storage/warehouse properties in Seattle and Auburn for a combined $40.3 million from Lake Stevens, WA-based Stor-More Self Storage.
Earlier this year, Marcus & Millichap announced the $10.25 million sale (representing about $123 per rentable square foot) sale of I-5 Mini Storage, an 83,315-square foot self-storage facility in Everett.
In October 2017, the firm announced the sale of Market Street Self Storage & Retail in Seattle’s Ballard neighborhood, a 579-unit self-storage property adjacent to Ballard Locks for $24.9 million, or about $282 per square foot—at the time, the sale was the largest self-storage property transaction by price ever to take place in the state of Washington.
Self-storage properties represent an appealing investment opportunity, especially in up-and-coming cities like Seattle and the fast-growing neighborhood that comprise the Emerald City. “The offering was a rare chance to acquire an urban Seattle self-storage asset in a fast-growing, upscale neighborhood,” said Christopher Secreto, first vice president investments in Marcus & Millichap’s Seattle office, at the time of the sale. “The desirable street-front retail tenants drive traffic to the highly visible location, which contributed to the asset’s investment value and helped make the sale a record-breaker.”