After a stretch of overbuilding the past decade, metro Denver had too many self-storage units which triggered pricing wars and falling rents. But as with so many things, the pandemic has reworked the equation.
The outbreak created a surge in remote workers who needed to free up more space for home offices. It also disrupted supply chains, causing small businesses to build up inventories and hunt for space. Construction became more costly and difficult, reducing the number of new units hitting the market.
A separate survey from brokerage CBRE found that rents are rising closer to 8% to 10% for stabilized developments or those that aren’t in the lease-up stage in metro Denver, said Walter Brauer, a first vice president with CBRE who specializes in self-storage investment sales. Occupancy rates at those established locations are running above 90%.
“We received offers for both of these properties on a weekly basis,” said Richard Sapkin, managing principal of Edgemark Development, in a release. “KKR made us an offer that was compelling in every way: timing, price and the quality of their brand. These properties were not on the market for sale, but KKR recognized the outstanding nature of these locations.”
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