For the second time in recent weeks, a New York-based Real Estate Investment Trust has bought a self-storage facility in Osceola County.
The buyer, one of W. P. Carey's managed non-traded REIT affiliates, paid $4.95 million last week for a 7-acre self-storage facility on Hoagland Boulevard just across from Kissimmee Gateway Airport. The property, on two parcels, comprises more than 75,000 square feet of mini warehouse space.
The trust has been active in the metro Orlando market, particularly in Osceola County. In 2014, W.P. Carey paid nearly $12 million for a 15-acre mini-warehouse facility on S. Poinciana Boulevard just west of Pleasant Hill Road. Like other Carey acquisitions, the property is managed by Extra Space Storage.
W.P. Carey is the 10th largest owner of self-storage properties in the U.S. So far this year, the company has invested $161 million in self-storage assets. Liz Raun Schlesinger, head of self-storage investment, said the category has been one of Carey's top performing asset classes over the last decade.
"We have always liked a lot about the asset class," she said. "It's not recession-proof, but its certainly recession-resistant."
She said that if managed correctly, self-storage facilities provide a steady source of revenue, making them a reliable long-term investment. W.P. Carey owned four properties in the Orlando market before October's buying spree.
Schlesinger said the Orlando and Kissimmee properties have performed well, and the REIT is actively shopping for more self-storage sites in the market. "We love the business," she said.
The company buys new assets in high-growth, high income areas. But as the latest investments illustrate, Carey will buy an older property "if we think we can manage it to higher revenue."
The Pleasant Hill facility was built in 2005. The one near the airport was built in the early 1980s.
"We invest across the spectrum and try to price each property we buy based on multiple parameters," she said. "It is real estate, so we look at the visibility, the location, if it's within a retail area within a dense market. We evaluate every property based on whether there's new construction within a 3-5 mile radius. We really like areas that are growing, so if there's new multifamily going up, that's a positive."
Editor's Note: This article was updated on Nov. 1, 2015, to reflect that the properties were purchased by one of W.P. Carey's nontraded, managed REITs.