With the popularity of self-storage on the rise, W.P. Carey has made a hearty investment in the industry on behalf of its managed, non-traded REIT CPA®:18 – Global.
According to Liz Raun Schlesinger, Managing Director of W. P. Carey, “The self-storage industry has shown resilience in both good and bad economic times, with the sector’s five-year compound annual total return in excess of 29 percent, according to NAREIT. Higher post-recession housing costs, both for rental and for-sale housing, has led more people to live in smaller spaces, creating greater need for storage units. We believe the growing U.S. population, with its propensity to acquire personal possessions and reluctance to part with them, will continue to fuel demand.”
In five separate transactions with an aggregate cost of $32 million, CPA®:18 – Global acquired five self-storage facilities across the nation. The facilities are located in Palm Desert, California, Miami, Florida, Corpus Christi, Texas, Kailua-Kona, Hawaii, and Columbia, South Carolina.
Together the facilities total over 350,000 thousand rentable square feet, broken down as follows:
- Palm Desert Facility – 93,098 net rentable square feet/798 units
- Miami Facility – 57,240 net rentable square feet/598 units
- Corpus Christi Facility – 100,100 net rentable square feet/641 units
- Kailua-Kona Facility – 39,500 net rentable square feet/366 units
- Columbia Facility – 63,121 net rentable square feet/442 units and 48 leasable RV/parking spaces
The five properties are located in strong markets and will all be managed by Extra Space Storage.
Liz Raun Schlesinger added, “All five acquisitions represent attractive investment opportunities for CPA®:18 – Global’s portfolio and show opportunities for growth, revenue enhancement and bottom-line improvement. We believe that our existing management structure in these areas will enable us to achieve operational synergies that will accrue to the benefit of our investors over time. We are already working with Extra Space Storage in these markets and believe that their ability to manage these assets will, in conjunction with our own storage expertise, enhance their long-term value.”
W.P. Carey has a history of investing in the self-storage industry, as Anne Coolidge Taylor, Managing Director of W. P. Carey, explains, “W. P. Carey first entered the self-storage space in 2004 because the sector demonstrated the same solid long-term income and cash-flow generating characteristics as the long-term net-leased assets in which we had invested for decades. While in the current low interest rate environment, competition for the attractive risk-adjusted returns provided by self-storage assets remains intense. The combination of our access to capital, depth of capabilities and ability to react to and quickly execute opportunities of all sizes allows us to continue to source and secure long-term investment opportunities in the sector.”
CPA®:18 – Global is a $1.4 billion offering that seeks to acquire properties through long-term net leased asset acquisitions and lease the properties back to the tenant companies primarily on a long-term, triple-net basis.
Through the end of June 2014, the REIT had raised total proceeds of $1.03 billion according to MTS Research Advisors. Currently, only C shares are available for new investment.