Shanahan Enterprises Sells South Elgin Self-Storage Property

Shanahan Enterprises is cashing in a long-term self-storage play in South Elgin.

Nearly 30 years after it built a 73,000-square-foot storage facility in the west Chicago suburb, the firm has sold the asset for $11.7 million as the Chicago area’s self-storage boom sweeps into the suburbs.

Shanahan sold the property at 300 Sundown Road in South Elgin, which it constructed in 1995, to Trojan Storage. The transaction also included 2.4 acres of vacant land where the buyer plans to develop a new three-story, climate-controlled building.

Marcus & Millichap represented Shanahan Enterprises in the deal. It allows the seller to pursue other interests outside of Illinois and gives the new owner the opportunity to “expand the asset and create additional value through institutional-level property management,” Sean Delaney, of the brokerage’s Oak Brook office, said.

The property garnered multiple offers, demonstrating the strength of both the self-storage market as a whole within the Chicago metro area in particular.

It totals 7.13 acres and includes 388 units across eight buildings, 96 percent of which were leased at the time of the sale, as well as 13,000 square feet of industrial or flex space.

Once considered a niche investment, self-storage has become a pandemic mainstay for real estate investors, thriving as people work from home, transition back to offices or find a medium between the two. Occupancy rates at self-storage facilities across the country approached 95 percent last year, from 91 percent in pre-pandemic 2019.

Buyers also tend to be attracted to self-storage properties as potential future redevelopment candidates. They generally sit on large parcels of land and the storage business allows property to carry its costs such as taxes for an owner patient enough to hold on until surrounding development creates an opportunity to turn to another use such as housing.

Alex and Nik Turik’s HAN Capital has been one of the top players in the Chicago-area self storage arena, cashing in on a Northwest Indiana facility for about $17 million last month. The firm also recently pulled in $32 million for properties in Chicago’s Old Town and suburban Wilmette.