News and Press at The William Warren Group

News & Press

We’re whole-heartedly committed to giving back to the communities we serve in meaningful ways. We invite you to learn more about the growth and expansion of our organization through our recent press releases and community events below.

Return To Blog

Equity Enters StorQuest Self Storage as Rents, Occupancy Skyrockets


Equity Enters Self Storage as Rents, Occupancy Skyrockets 

Robert Carr 

June 19, 2013 

Self-storage properties are seeing record-high occupancies and rents, in a commercial submarket that seemed to pass through the recession stronger than ever. 

There are about 50,000 self-storage facilities in the United States, according to Self Storage Association. Most of these are owned by small firms. REITs own some large portfolios, but control only about 10 percent of the total supply. Chicago-based MJ Partners Real Estate Services tracks self stoarge REITs, and says the trusts are running at about 90 percent occupied. 

“In an industry that sees about 7 percent turnover every year, it used to be 85 percent was considered fully occupied,” says Marc Boorstein, a principal at MJ Partners. “The length of stay keeps getting longer, and thus the industry has been able to boost rents by up to 8 percent. If someone’s paying $150 a month, they’ll do $160 a month, add that over tens of thousands of units and you’ve got a material impact on revenue.” 

Glendale, Calif.-based Public Storage, the largest self storage REIT with more than 2,000 properties, saw occupancy rise to 92.4 percent in the first quarter, according to Boorstein’s first quarter report. Salt Lake City, Utah-based Extra Space and Buffalo, N.Y.-based Sovran both saw same-store NOI hit at more than 10 percent in the first quarter, with Public Storage recording NOI at 9.5 percent. 

The success of the sector allows the REITs to spend less on advertising and more on acquisitions and development, he says. The trusts have competition, however, as investors want to jump into the industry. 

“Private equity wants into self storage, they’ve outbid the public companies on a number of portfolio deals in the past year,” Boorstein says. “Last year, the public companies spent $1.5 billion on acquisitions, and this year will be much less because of the competition.” 

He says he just marketed a portfolio of 15 properties, with about 6,800 units in Colorado, Texas, Arizona and the 698-unit Evergreen Claremont property in Claremont, Calif. None of the bidders were from the usual top 10 industry firms, Boorstein says. “We had bids from all over the country, with cap rates very similar to trophy commercial real estate properties.” 

StorQuest Self Storage, the storage portfolio of the Santa Monica, Calif.-based William Warren Group, recently purchased 23 facilities in Florida and South Carolina as a launch pad for national expansion. The company already owns properties throughout California, Arizona, Colorado and Hawaii. 

Bill Hobin, president and CEO of William Warren, has also opened an office in the Southeast to focus on the growth opportunities, hiring self-storage industry veterans Brenda Scarborough and Travis Lawhorne. “There is increasing demand from institutional investment firms to deploy capital into the storage sector,” Hobin said in a statement about the purchase. 

Boorstein says financing has also picked up greatly for the industry, though there’s still just a small pot available for new construction. The trusts are focusing energy on the well-populated areas, following the urbanization trend, he says. “We used to operate by household income, but it’s all about density and population now,” he says. 


Explore Categories