- Hines purchased a 260.3 KSF self-storage facility in Cerritos for $91M, setting a new record for a single-property self-storage transaction.
- The facility, managed by Extra Space Storage, was 88% occupied at the time of sale, reflecting strong demand for self-storage assets.
- Investment in the self-storage sector surged during the pandemic, but the market stabilized this year.
According to The Real Deal, Houston-based real estate giant Hines has made a notable move into the self-storage sector by buying a 2,460-unit facility in Cerritos for $91M.
Deal Details
The property, a 260.3 KSF Extra Space Storage (EXR) facility located at 17900 Crusader Avenue near the 605 Freeway, was sold by Manhattan Beach-based Capital 360 and North Carolina-based Barings.
The Orange County Business Journal reported that the deal represents the largest single-property self-storage sale ever recorded.
A Premium Price
Hines paid $350 PSF for the facility, significantly above the U.S. market average of $139 PSF for self-storage properties in Q2, according to data from Cushman & Wakefield. Brokers Nick Walker and Trevor Roberts of CBRE’s Self Storage Advisory Group, who represented the sellers, noted that the transaction attracted multiple competitive offers.
“This is the largest single-property self-storage sale in history, and our team fielded many competitive offers throughout the marketing process,” Walker said in a statement.
Development and Occupancy
The Cerritos property was originally purchased by Capital 360 and Barings in 2018, who then developed the three-story, 5-acre facility, which opened two years later.
Managed by Extra Space Storage, a Salt Lake City-based company, the facility was 88% occupied at the time of the sale, highlighting the ongoing demand for self-storage units.
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A Resilient Investment
The self-storage sector saw a boom during the pandemic, with $50B in transactions from 2020 to 2022, as per Cushman & Wakefield. Although the market has stabilized this year, deal volume reached $3.36B in 1H24, slightly above last year’s levels.
The brokerage firm described the current market as a “return to normal,” emphasizing that self-storage remains attractive to investors as a stable asset class, especially during downturns.
Growing Portfolio
The acquisition of Cerritos aligns with Hines’ broader strategy of expanding its self-storage portfolio. Earlier this year, the company, along with Trez Capital, secured a $108M loan for a 13-property self-storage portfolio across Dallas-Fort Worth. Hines is also developing two additional self-storage facilities in the area.
Founded in 1957, Hines manages $93B in real estate assets across 31 countries, showcasing its diversification into sectors beyond traditional commercial and residential properties.
