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Self-Storage Facility in Chula Vista Gets New Owner

Buyer Remains Active This Year in Storage, Senior Housing Sectors
March 12, 2018
Ladera Ranch, Calif.-based Strategic Storage Growth Trust Inc. and its parent firm are having a busy 2018 when it comes to property investments. The REIT’s latest acquisition is a 900-unit self-storage facility at 2380 Fenton St., in the Eastlake neighborhood of Chula Vista, CA.

The property was purchased for an undisclosed price from an undisclosed seller. A statement from the public, non-traded REIT said the three-story, climate-controlled building was acquired from its developers following the issuance of a certificate of occupancy.

Spanning approximately 86,000 square feet on 1.5 acres, the newly-constructed facility is bisected by a covered loading area and has drive-up units lining its exterior.

“The Eastlake location is in a high growth, high income area of Chula Vista, in close proximity to major retailers and residential developments,” said Wayne Johnson, chief investment officer at Strategic Storage Growth Trust.

Headquartered in southern Orange County, the REIT’s portfolio consists of 24 operating self-storage facilities totaling approximately 16,000 storage units and 1.8 million net rentable square feet in 10 states. It also owns two development properties in the Greater Toronto area, set to become facilities totaling 1,700 self storage units; and a development property in Asheville, N.C., slated for 650 units.

The REIT is an affiliate of SmartStop Asset Management LLC, which has another fund that in late February acquired three senior housing communities in the Salt Lake City market totaling 294 units, for an undisclosed price. SmartStop announced in January that it was launching the non-traded REIT focused on student and senior housing, as it branches beyond its initial concentration on self-storage properties.

Also during February, Strategic Storage Growth announced that it had acquired two Florida self-storage properties, also for undisclosed prices - an 870-unit facility in the Miami suburb of Pembroke Pines, and a 695-unit property in the Tampa suburb of Riverview.

According to brokers in the San Diego market, investment trends in the self-storage market remain generally favorable, though deals in the specialty sector tend to be infrequent compared with other categories.

A second-half 2017 report by Marcus & Millichap said the San Diego metro vacancy rate for storage units was expected to rise 60 basis points by year’s end, to 8.6 percent. San Diego remains the nation’s sixth tightest market for vacancy, well below the U.S. rate of 11 percent at the end of 2017.

Rents for climate-controlled units in San Diego were expected to rise 4.3 percent from the prior year, reaching $1.88 per square foot at year’s end. Non-climate-controlled units were on pace for a 4 percent rise in rent, to $1.64 per square foot.

Marcus & Millichap said the Western U.S. overall remains tighter for storage space availability than the nation as a whole, with the trend fueled by strong population growth and healthy job markets. Big deals of the past year included a Phoenix facility that sold for $14.5 million ($208 per square foot) and a Las Vegas property that sold for approximately $13.3 million ($123 per square foot). The Western states of Washington and Colorado were also active for big trades during 2017.

For more information on the Chula Vista sale, please see CoStar COMPS #4168489.

Lou Hirsh, San Diego Market Reporter  CoStar Group   
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