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February 23, 2019
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Self-Storage Facility Becomes the Latest Gelt-y Pleasure for L.A. Real Estate Firm

1/24/19

Gelt Inc has acquired Southmark Storage, a 665-unit, self-storage facility in South Pasadena, for $16.5 mil. Built in 1986 and situated on a 1.81-acre site at 919 Mission St, the six-building property includes 623 indoor storage units and 42 outdoor rental units, a site office and a two-bedroom manager’s apartment.

The property was 99% occupied at the close of escrow. Immediately upon closing, Gelt hired Extra Space Storage, one of the nation’s top self-storage property management companies, to streamline operations. Gelt will conduct property improvements including installing new roofs, asphalt, and paint, among other property maintenance. It will also improve signage, property access systems and add a web payment platform for its customers.

Southmark Storage is located in a residential neighborhood adjacent to the South Pasadena Metro Station, with high median home prices and household incomes. The property is within a 16-minute drive to Downtown Los Angeles.

“This is Gelt’s first self-storage facility acquisition,” said Keith Wasserman, a partner with LA-based Gelt. “We have and continue to be in the multifamily space, however, we are also an opportunistic and entrepreneurial company and identified the intrinsic value in acquiring this particular property and expanding into another stable asset class. Just as we have been successful at adding value to large-scale apartment assets through improving operations, management, making capital improvements and bringing rents to market, we plan on a similar strategy to maximize returns for our investors with this property.”

Wasserman noted that Gelt is targeting the acquisition of up to 1 msf of self-storage facilities over the next two years in primary and secondary markets with high barriers to entry, where Gelt has an existing footprint.

Greg Nassir and Edward Matevosian of CBRE represented the seller, Southmark Storage LLC, a California-based private investor. Gelt was self-represented.

With over 50,000 self-storage facilities across the country, this property type has evolved from an interim property use to a core asset in the commercial real estate industry. Additionally, a surprising 9.4% of American households rent a self-storage space and statistics show that there is seven square feet of self-storage space rented per capita in the U.S. Equity and debt capital invested in this asset class has increased substantially and self-storage has continued to outperform other real estate asset classes during and after the recession. Self-storage returns consistently lead the market and yet have amongst the lowest default rate of all real estate asset classes.






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