Carlyle Refinances Self-Storage Portfolio for $100 Million

Self-storage isn’t worth what it once was. It’s a lot more valuable now.

The Carlyle Group and Sabharwal Properties scored a $100 million loan to refinance a four-property portfolio in New York City, the Commercial Observer reported. The loan retires $75.8 million in construction debt originated by Bank OZK and Santander.

PGIM Real Estate provided the debt on the four buildings, which were all completed in 2020 or 2021 and span 443,000 square feet across nearly 5,200 storage units.

They include a CubeSmart Self Storage at 92 Caton Place in Brooklyn, two StorQuest Self Storage facilities in the same borough and another CubeSmart on Staten Island.

A Walker & Dunlop team including Keith Kurland and Aaron Appel arranged the transaction. None of the parties involved responded immediately to the Observer’s requests for comment.

The major self-storage deal was Carlyle’s second such transaction in recent months.

In April, the private equity giant bought the Life Storage building at 87-16 121st Street in Queens from a joint venture of SNL Holdings and Equity Resource Investments for $50.3 million. That was more than four times the $11 million the sellers paid for the Richmond Hill property six years earlier.

The April sale was part of a larger four-building, $110 million deal that included three facilities in Brooklyn.

Self-storage in New York City’s outer boroughs has been a hot commodity since before the pandemic and gained even more value as Covid led people to move in a hurry. Many did not want to part with their things and stuck them into storage units instead.

The sector is cooling down across the country, though. National self-storage street rates declined 3.6 percent year-over-year in April, according to a recent report from RentCafe. The national average for renting a unit is down to $135 as a frozen housing market limits the need for personal storage space and inventory levels for units remain high after a pandemic-aided construction surge.

— Holden Walter-Warner