Lee & Associates-LA North/Ventura Transacts 47,294-SF Self Storage Facility Sale
Property attracts nine bidders over 30 days and sells for $5.1 million
TEMECULA, CA – June 1, 2015 –A 47,294-square-foot self-storage facility in Southern California’s Riverside County has traded for $5.1 million after brokers fielded nine offers over a 30-day marketing period, said John Battle SIOR, managing director and principal of Lee & Associates-LA North/Ventura, who represented buyer and seller in the transaction with Lee Principal Mike Tingus.
“The self-storage market has been the fastest growing sector of the entire commercial real estate investment market,” said Battle, “and average returns in excess of 16 percent a year over the past 10 years are fueling tremendous demand by investors.”
The property was marketed without an asking price. After all offers were received, the marketing team and seller countered the three best offers, rather than ask for a “best and final” as traditionally occurs when multiple offers are received.
“We wanted the strongest bidders to be aware of and understand our buyer’s expectations,” Battle said. “We negotiated final terms with the buyer with the best response to our counter, and closed the transaction without any re-trading from the buyer.”
The facility, located at 42189 Winchester Road in Temecula, CA, sold to Guardian Storage Centers, LLC, an Irvine, CA operator of 39 storage center locations in California and Arizona. The seller was Scottsdale Commerce LLC, a private investment company.
The recent success of A & E’s Storage Wars television series has increased the visibility of the sector, but real estate investors have long been aware that the self-storage industry offers many advantages. The industry, which generated more than $24 billion in U.S. revenues in 2014, according to industry trade group Self Storage Association, requires a lower occupancy rate than, say, multifamily investments, to break even, appears to be relatively recession proof, and publicly traded storage companies have outperformed all other commercial real estate sectors with an average annual return of 21.4 percent over the past five years and a 16.6 percent return over the past 10 years, according to the National Association of Real Estate Investment Trusts (NAREIT).