Colorado Real Estate Journal - April 6, 2016
A Thornton self-storage property achieved a sales price of $203 per square foot, a record for a self-storage facility in Colorado. Sovran Self Storage Inc. bought the 521-unit Extra Space Storage facility from TRC Cos. Sovran is a publicly traded real estate investment trust that owns and operates approximately 500 self-storage facilities across the country. “Demand for institutional-quality assets in markets like Denver has reached an unprecedented level,” said Adam Schlosser, vice president of investments in Marcus & Millichap’s Denver office. “It’s difficult to feed the staggering amount of capital trying to enter or expand into self-storage investments, and current pricing is creating opportunities to acquire assets that would otherwise rarely come to market.” Extra Space Storage is located at 9000 Gale Blvd., at the corner of Gale and Huron Street. It was completed in 2011 and includes drive-up and interior-access units; a three-story, split-level climate controlled building; and three single-story buildings. There also is an institutional-quality leasing office, 18 security cameras with multiple display monitors and electronic keypad access for tenants. Approximately 316,268 people live within a 5-mile radius of the property. Charles “Chico” LeClaire, Marcus & M i l l i c h a p senior vice president of investments, said Extra Space Storage is, in his opinion, the finest self-storage facility north of Colfax Avenue. It represents new, state-of-the-art construction with above-market rents, he said. “There’s no other competition like it in that part of town,” LeClaire said. The price wasn’t released but was listed in public records as $9.43 million. LeClaire said during the recession, there were “very, very few” self-storage facilities constructed, and that’s resulted in pentup demand. The cost of financing also has created an appetite to invest in self-storage, he said. “Class A properties are selling for 5 cap rates and below,” he said. “We’re just starting to see some people take some money off the table because things are so good.” Although the $203 price for Extra Space Storage is a record for Colorado, LeClaire said Marcus & Millichap sold a Class A, fully leased property in the Seattle area the same day for nearly $300 per sf. “They’re selling for record prices all over the United States,” he commented. Schlosser and LeClaire represented the seller, a private investment group that owns numerous self-storage facilities along the Front Range. They also procured the buyer.