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NY-based self-storage operator spends $9M for two Orlando-area properties

Secure Holdings Investments LLC sold two Orange County self-storage properties on Wednesday to Sovran Acquisition LP, of Buffalo, N.Y., which does business as Uncle Bob's Self Storage, a manager of self-storage properties in the U.S.

A four-acre self-storage property at 2650 N. Powers Dr. in Orlando was purchased for $4.1 million by Sovran, roughly $27.47 a square foot. The property's last sale was for $4.85 million in 2008. The total warehouse space is 149,429 square feet, according to Orange County Property Appraiser records.

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A dated image of the self-storage property on University Boulevard that was acquired this week by a Buffalo, NY-based company that operates Uncle Bob's Self Storage properties.
A dated image of the self-storage property on University Boulevard that was acquired this week by a Buffalo, NY-based company that operates Uncle Bob's Self Storage properties. (Orange County Property Appraiser)

Sovran also bought a 3.08-acre self-storage property at 11595 University Blvd., named University Store All, for $5.043 million for 121,532 square feet, roughly $41.49 a square foot.

Secure Holdings previously bought the University property for $6.5 million in April of 2007.

Diane Piegza, vice president of investor relations at Uncle Bob's Self Storage, told GrowthSpotter on Thursday the two Orlando purchases are part of a "four-pack" of recent Florida purchases. The company bought two other self-storage businesses in Port St. Lucie and North Port.

"We took over management of them late last year with the anticipation of buying them," said Piegza.

Uncle Bob's operates 215 self-storage businesses in 25 states. Texas and Florida are two of the largest markets for the company.

"I think now we have eight properties right now in Orlando," Piegza said.  And there might be room for more.

"We look to grow in markets where we already have a presence," said Piegza. "We like to increase market share and brand awareness," she said. That creates economies of scale for the company.

The company, which started in 1985, has been in the Orlando area since 1991 when it moved into its location on S. Orange Blossom Trail. That store was No. 37 for the company.

Uncle Bob's does not tend to develop and build its self-storage facilities, though they might partner with a developer who builds it and then sells it to Uncle Bob's.

While Uncle Bob's has been in business a long time, the sector has recently become a bit of a darling among various real estate investment trusts (REITs) which are creating separate departments for the investments.

Self-storage companies, which rent units to small businesses and consumers, produced the best risk-adjusted return among 10 U.S. real estate investment trust indexes in the past decade, according to Bloomberg's riskless return ranking. "They had the highest total return and the third-lowest volatility, for a risk-adjusted gain of 10.6 percent," Bloomberg reported.

Marcus & Millichap released a report late last year on the sector with the headline, "Few Headwinds in Sight to Impede (Self-Storage) Upswing."

There were 10 sales of self-storage properties in Orange County in the past year, averaging $80.60 a square foot, according to Orange County Property Appraiser sale metrics. However, the price per square foot varied dramatically, from a low of $54 a square foot at a 1001 Lee Road storage center, to a high of $125 for one at 10053 Lake Underhill Road.

Teresa Burney can be reached at 352-455-1955 or at teresaburney4@gmail.comFollow GrowthSpotter on Facebook, Twitter and LinkedIn.

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