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A pandemic space race: self-storage roars back

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Last fall, Blackstone acquired Simply Self Storage — with eight million square feet of rentable space — for $1.2 billion, on top of the $300 million it had already invested in the industry. And in April, Public Storage completed its $1.8 billion acquisition of ezStorage, adding 48 properties with 4.2 million net rentable square feet.

With both investor interest and consumer demand, Edison Properties, owner of Manhattan Mini Storage, would be exploring the sale of its division, which has 18 locations and 3.1 million square feet, for an estimated $3 billion, or nearly $1,000 per square foot, Bloomberg News reported.

Edison declined to discuss the sale, but the price tag isn’t surprising, Evercore’s Mr. Sakwa said, given the generally high cost of New York real estate.

Most of the growth is in general units, but storage for extras such as recreational vehicles and boats, as well as refrigerated storage, has also increased.

Despite the spike in demand and high purchase prices, “it’s not all rosy under the hood,” said Stephen Clark II of the Clark Investment Group in Wichita, Kansas, which specializes in self-storage among other real estate classes. Rental statistics showing high occupancy rates can be misleading, he said, because they include a number of long-term tenants whose rates follow the market.

And experts aren’t sure how post-pandemic behavior will affect the industry. For example, what happens if storage tenants leave the parental home or don’t have to use their second bedroom as a makeshift office?

But as home prices escalate nationwide, so-called starter homes have become more expensive and some new homeowners are opting for smaller spaces. That, Mr Morales said, could translate into constant demand for storage.

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