WALNUT CREEK, CA—Marcus & Millichap Real Estate Investment Services Inc. reports self-storage investment activity will increase this year as banks sell off REO properties, drawing regional syndicates from the sidelines to target Class B/C assets throughout the Sun Belt.
California and Florida will register a sizable share of closings as maturing loans and soft operations push properties into foreclosure, especially with banks still hesitant to refinance devalued assets.
Financing for new buyers seeking properties below $5 million and with a stable operating history will emerge in the form of SBA loans, helping to accelerate activity.
At the top of the market, cash-heavy REITs and institutions are moving back into the self-storage arena, leveraging operating efficiencies to add value to recently purchased properties.
Class A assets in primary markets, including those in the Northeast, will garner the most attention. Such properties generally will trade for more than $10 million and at initial yields in the mid-7 percent to low-8 percent range, depending on location and age.
For a complete copy of the company’s report, please contact Stacey Corso, Stacey.corso@marcusmillichap.com
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