Colorado Real Estate Journal - April 20, 2016
Not everyone would invest $11.3 million in a vacant property, but that’s what happened in the sale of a self-storage facility in Aurora. Extra Space Aurora LLC, an affiliate of real estate investment trust Extra Space Storage Inc., bought a brand-new, Class A property at 2240 S. Xapary Way just after the certificate of occupancy was issued. “There are over 1,000 units in the property – 1,000 vacant units,” said Marcus & Millichap’s Charles “Chico” LeClaire. Although the first sale of its kind in Denver, “The sale represents a trend in the industry where developers decide to sell the property upon completion instead of taking on the lease-up risk. This strategy works best with Class A assets in excellent locations,” he said. “There are a lot of developers out there that would like to sell at the certificate of occupancy stage, but the buyer pool is very small and the deals can be difficult to do.” Located near the corner of East Iliff Avenue and Interstate 225, the 86,175-square-foot facility features mostly climate-controlled units. The seller was I-225 & Xapary Way Self Storage LLC, and the property was its first self-storage development, said LeClaire. The four-story facility features an institutional-quality leasing office, advanced security systems, 24-hour video surveillance, large freight elevators and a loading zone for customer use. It is visible to more than 150,000 cars per day and also has visibility from a future light-rail line. More than 187,000 people live within a 3-mile radius. “The visibility from 225 is exceptional. That was one of the reasons Extra Space was so excited about getting it,” said LeClaire, noting that type of visibility draws a lot of renters. Extra Space owns a dozen self-storage properties in the Denver area. “Not many people are willing to buy a big facility that doesn’t have any tenants,” LeClaire said. “They have to be very, very strong financially and have confidence in their ability to fill it up.” LeClaire and Adam Schlosser of Marcus & Millichap’s Denver office handled the sale.