Nuveen Real Estate Buys 1.3 MSF Self Storage Portfolio

The company now owns a 90 percent interest in a collection of 21 assets spread across the southern part of the country.

Nuveen Real Estate has acquired a 90 percent interest in a 21-property, high-quality self storage portfolio located in the southern part of the country, from Morningstar Storage, which will retain a 10 percent ownership in the assets.

“These properties provide Nuveen Real Estate immediate scale and exposure to one of the fastest-growing alternatives sectors of real estate in some of the most sought-after submarkets in the U.S.,” William Harrison, Nuveen Real Estate’s managing director of housing, Americas, said in a prepared statement. “Nuveen Real Estate sees the self storage sector as a defensive asset class with relatively low capital requirements, making it a strong complement to our core holdings in the housing, retail, office and industrial sectors.”

The portfolio comprises 11,130 units, with a grand total of approximately 1.3 million square feet of space. Of those, 65 percent are climate controlled. The average age of the units is 11, and the portfolio as a whole was 85 percent occupied at closing.

Storage industry rises in the South

Among the cities where the storage units are situated are Atlanta, Ga; Tallahassee, Fla.; and Charlotte, N.C. All facilities are within cities offering favorable demographic trends and projected population growth.

According to Marcus & Millichap’s most recent national self storage market report, a positive economic momentum has driven an increased need for self storage, while new supply slows rent growth. The report predicts supply will outpace demand in the months ahead, applying upward pressure on vacancy in numerous metros across the country.

Earlier this month, the Mele Group of Marcus & Millichap arranged the sale of Self Storage Center Portfolio, a 177,575-net-rentable-square-foot, three-property collection located in three towns across Rhode Island.

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