CLEAR LAKE, TX-A subsidiary of WedgeReal Estate Holdings has purchased Safe-Keeping Self Storage, a 539-unit self storage facility totaling 50,332 square feet, from Weiss Realty LLC.
Although the purchase price was undisclosed, local experts say similar assets in the Houston metro area would trade for $60 to $100 per square foot. Using those metrics, Safe-Keeping Self Storage sold for $3 million to $5 million.
Situated on a little more than seven acres at 900 West Nasa Pkwy. near Interstate 45, Safe-Keeping Self Storage is located in a former lumber company building that was converted in the late 1990s. At the time of purchased, the property’s occupancy rate was in the low 80% range, according to Aaron Swerdlin, senior managing director with HFF’s Houston office. He and Doug McCarron, managing director of HFF, exclusively represented the seller.
Swerdlin says Safe-Keeping Self Storage appealed to a variety of buyers because it offered a value-added opportunity. “There is the possibility of upside with increased occupancy and rental rates,” he explains, estimating the property’s occupancy lagged the market by 5% to 8%. Additionally, the property has enough land that the new owner could expand or sell off a pad site.
Swerdlin tells GlobeSt. that Safe-Keeping Self Storage received more than 10 offers. Wedge Real Estate was not the highest bidder; however, the company has a strong track record for closing deals and is known to be a strong sponsor, and since there was a loan assumption required as part of the deal, Wedge emerged as the buyer.
“The assumable loan drove the deal,” Swerdlin says. The sub-7%, fixed-rate, life company loan has 17 years left on its term. “A long-term loan has value to a buyer like Wedge because they are long-term holders,” he adds. “There wasn't a lot of risk that Wedge would decide the loan didn't have value.”
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