Chicago-based Harrison Street Real Estate Partners has reportedly formed a joint venture with United Stor-All Centers to buy, develop or redevelop $300 million (€230 million) of self-storage properties over the next three years.
The partnership has already made its first purchase: a $90 million, nine-property portfolio with assets in Pennsylvania, New Jersey, New York, Virginia and Florida. The portfolio contains 6,500 units.
The goal is reportedly to make Maryland-based United Stor-All grow its business so it becomes one of the largest self-storage players in the markets in which it operates.
The US storage market had expanded to 2 billion square feet of self-storage space as of the beginning of 2006 – an area three times the size of the island of Manhattan – according to the Virginia-based Self Storage Association, an industry trade group.
The industry doubled in size when measured by square feet between 1998 and 2005. More than a quarter of the space was added between 2001 and 2004.
Some have described the sector as overbuilt as investors have poured in, attracted by its low overhead and high profit margins. Opportunities for consolidation in the industry abound as 32,000 companies own the nation’s more than 45,000 units.
Harrison Street was founded in 2005 by Christopher Merrill, formerly a partner at Heitman, and the Galvin family of Chicago, the founding family of Motorola.