Home Finance Public Storage Buys Federal Way Asset for $23.35MM

Public Storage Buys Federal Way Asset for $23.35MM

By Meghan Hall

Self-storage assets have become increasingly popular during the pandemic. In a stroke of irony, while many populations are sheltering in place, they are also moving to different locations due to the nature of remote work. This has been a boon for self-storage operators and investors, as the popularity of the asset class has grown amidst demand. In a recent deal, Public Storage, a REIT, acquired Federal Way’s CubeSmart Self Storage in Federal Way, Wash., for $23.35 million. The deal closed on December 16th, according to public records, and the seller was an entity affiliated with Dave Kessler of Latitude Development, LLC.

The property is located at 2010 SW 356th Street. King County Assessor’s records show that the self-storage facility was constructed in 2019 and totals 26,224 square feet. It sits on about 2.12 acres of land. The facility is not far from downtown Tacoma and the Port of Tacoma, as well as downtown Federal Way.

According to a third quarter report released by JLL, self storage REITs across the country continue to perform well. Between the third quarter of 2020 and the third quarter of 2021, revenues for national self-storage REITs increased 15.8 percent, while expenses decreased 2.3 percent. JLL also reported that for REITs, revenues increased 22.9 percent year-over-year. 

The increase in revenues has been in part driven by record high occupancy levels, which are up 240 basis points from 2020. Across the United States, occupancy sits at 96.2 percent, as well. 

As a result, JLL noted that the REITS remain “highly acquisitive” and focused on strategic transactions. Large portfolio deals continue to shape the industry, and transaction volume will likely hit $18 billion by the end of 2021–a record for the industry. 

For Public Storage, the organization has grown over the course of the last several decades. Originally founded in 1970, the REIT now has “thousands” of locations across the United States and Europe, according to its website. Currently, Public Storage has 170 million net rentable square feet as part of its portfolio and is one of the largest public storage landlords, as well as a member of the S&P 600 and FT Global 500.

At the beginning of December, Public Storage announced its acquisition of All Storage for $1.5 billion. The buy-out included a portfolio of 56 self-storage properties totaling 7.5 million square feet. Since the beginning of 2019 alone, the company has expanded its net rentable square footage by 22 percent, or about 36 million square feet, and is expected to close more than $5 billion in acquisitions by the end of 2021.