What's Happening?
Intercontinental Real Estate Corporation, in partnership with LaTerra Development, has acquired EZ Access Self Storage in Santa Clarita, California, for $27 million. This acquisition marks Intercontinental's entry into the self-storage sector, highlighting growing institutional interest in this asset class. The facility spans 100,000 square feet and includes nine storage buildings, a management office, and a residential unit. The property has shown long-term stability with an average tenant retention of six years. The joint venture plans to implement strategic improvements, including modernizing the management office and enhancing site security. The facility will be rebranded under the Public Storage name, aiming to improve operational efficiencies.
Why It's Important?
The acquisition reflects the increasing demand for self-storage facilities, driven by demographic trends and urban space constraints. Self-storage has outperformed other real estate asset classes over the past 25 years, offering flexibility during life transitions. With a lower per capita self-storage space in Los Angeles compared to national averages, the market is under-supplied, presenting significant growth opportunities. Intercontinental's move into this sector signals a strategic expansion into alternative real estate markets poised for institutional growth.
What's Next?
The partnership plans to enhance the facility's operational efficiencies and tenant experience through targeted improvements. The rebranding under Public Storage is expected to bring greater management expertise. As the demand for self-storage continues to rise, further investments and expansions in this sector are likely, potentially leading to more acquisitions and development projects.
