(To read more on the industrial market, click here.)
BUFFALO-Sovran Self Storage Inc. has acquired a 20-property self-storage portfolio from Dallas-based Cornerstone Development Corp. for $90 million, or about $69.23 per sf. The buy adds 1.3 million sf to the locally based specialty REIT's portfolio and also marks its entry into the St. Louis market.
Seven of the properties are in St. Louis. Of the remainder, six are in Dallas, three in San Antonio, three in Tampa and one in Southeastern Louisiana. They are all markets in which Sovran already has a presence. "The properties were built between 1994 and 2000," David Rogers, CFO, tells GlobeSt.com, and adds the portfolio is 82% occupied.
The acquisition included the assumption of $32 million in mortgage debt. Additional funding consisted of a $40-million draw on Sovran's line of credit and $18 million in cash, which remains from the company's recent issuance of 10-year term notes.
Sovran now owns and/or operates 316 properties under the Uncle Bob's Self Storage brand. They encompass more than 19 million sf in 22 states. "The Dallas, San Antonio and Tampa stores will fit in very well with the stores we already operate in those cities," Rogers says.
According to a 2006 self-storage research report from Marcus & Millichap, returns generated by self-storage REITs throughout the first three quarters of 2005, "significantly outpaced other property sector returns," with an average return of 24.3%. The highest median prices for self-storage assets were in the Northwest, according to the report, where the median was $82.73 per sf. The median in the South Central region, according to the report, was $45.58 per sf at the end of 2005.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
