What took so long? This week, private equity giant KKR announced that it has bought three self-storage facilities located in Austin, Texas and Nashville, Tennessee. The properties, which were built between 2019 and 2020 and include 1,800 storage units, were acquired through separate transactions with two different sellers for a total price of around $36 million.
The acquisitions represent KKR’s first-ever foray in the self-storage sector–i.e., a key half of the “beds and sheds” investment thesis that has been a mainstay of institutional investment in real estate, and a property sector that has fared relatively well, even in a fragmented market landscape still dominated by independent owner-operators, and despite the variable impacts of covid-19 on commercial real estate sectors.
“We are excited to anchor our self-storage portfolio with these high quality assets in Austin and Nashville,” said KKR’s Roger Morales, a Partner and Head of the firm’s Commercial Real Estate Acquisitions in the Americas. “We believe that the self-storage sector exhibits strong supply-demand fundamentals and has appealing long-term dynamics, including resiliency through economic cycles. We expect to continue to grow our self-storage footprint through 2021 and into 2022.”
A fund just for self-storage
In other self-storage news, Denver-based opportunistic commercial real estate investor VanWest Partners announced last week that it has bought two self-storage facilities in North Carolina, part of its dedicated self-storage fund, VanWest Self Storage Fund II.
The two facilities span 219,000 net rental square feet and 1,570 units, located in the towns of Shelby and Hickory, NC. VanWest says it will rebrand the properties under its ClearHome Self Storage platform.
With the acquisition of the two properties, VanWest now owns and operates self-storage facilities in 8 states and 12 metropolitan areas nationwide. Since the inception of its second fund in January 2021, VanWest has deployed nearly $50,000,000 in gross capitalization in markets including Florida, Michigan, Ohio and North Carolina. The firm expects to close the Fund by the end of 2021, with acquisitions scheduled to close in Illinois and Florida in the third quarter. By year end, the fund will have deployed $30,000,000 in equity and around $100,000,000 in gross capitalization.