An overbuilt self-storage market in Florida, combined with a downturn in the state’s population growth and the two-year recession, could lead to more bank-owned real estate sales.
Marcus & Millichap Real Estate Investment Services recently brokered the sale of a bank-owned facility for a fraction of the facility’s debt. Highlands Storage had an estimated debt of more than $4 million, but sold to a private investor for $1.25 million.Adam Wides, an associate and financial analyst with Marcus & Millichap, said more distressed sales could be on the horizon.
The Florida self-storage market experienced rapid growth in 2003 and 2004, Wides said. But many facilities are now having trouble maintaining occupancy. At the time of the sale, Highlands Storage occupancy was 6 percent.
According to the Self Storage Association, nearly 8,700 self-storage facilities were built nationwide during 2004 and 2005.
Source: The Ledger, Self-Storage Sites Taking Hit