Buchanan Street Partners is doubling down on self-storage in coastal California with a nearly 100,000-square-foot facility north of Santa Cruz.
The Newport Beach-based firm has broken ground on a 99,500-square-foot facility in Scotts Valley, redeveloping a 2.6-acre site at 10 Victor Square into a three-story, 760-unit self-storage facility, the Orange County Business Journal reported.
Buchanan Street acquired the property from a private investor earlier this year for nearly $5.3 million after about 14 months of entitlement work. Demolition at the site began last month. The project is slated for completion in April 2027.
The Scotts Valley endeavor is Buchanan Street’s eighth self-storage investment in California over the past five years. In 2021, the company kicked off an initiative to acquire and develop self-storage assets in specific Western markets. The company has invested roughly $325 million in self-storage to date, with much of those efforts concentrated in major markets like Los Angeles, Orange County, the Inland Empire, San Diego and San Francisco, according to the Business Journal. The company’s other investments in the West are in markets like Denver, Las Vegas, Phoenix, Portland and Seattle.
Buchanan Street has been focused on self-storage as it has “consistently proven to be one of the most resilient asset classes within commercial real estate,” Feerooz Yacoobi, senior vice president at Buchanan, told the Business Journal, calling it a “recession-resistant asset class.” “Demand is driven by life events such as moving, downsizing, business formation, and family transitions, which occur regardless of broader economic conditions.” Yacoobi credited the perfect storm of population growth, housing affordability challenges and smaller living spaces in supporting “long-term demand and increased consumer adoption.”
Buchanan’s Scotts Valley play in particular will likely benefit from limited competition and aging storage facilities in the area. The newest comparable facility in the small city is nearly 25 years old, according to the Business Journal.
To the north in the Bay Area, last fall, Buchanan began construction on a new 1,025-unit self-storage facility in South San Francisco. The three-story, 66,250-square-foot property at 1341 San Mateo Avenue is expected to get a boost from the dense population and lack of supply in the region when it opens.
Buchanan Street Partners is working toward building a self-storage portfolio exceeding $1 billion, according to the Business Journal. Buchanan currently has $1.6 billion in various types of assets under management. — Chris Malone Méndez
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