CrowdStreet: 10 Gordon Drive Self-Storage

The real estate investment platform CrowdStreet launched an offering for a ground-up development of a self-storage facility in Long Island, New York.

In times of adverse market conditions and economic uncertainty, a historically resilient and inflation-hedging investment avenue is self-storage facilities. The 10 Gordon Drive Self Storage project is in a market that’s seeing high demand for such facilities, which have seen a 94% occupancy rate and 10% rent growth over the last 12 months according to management company Extra Space Storage, which will provide the facility with its proprietary pricing models, electronic building and gate access and a suite of online tools for customers to the deal. 

The Long Island market is in the midst of a severe supply and demand imbalance as storage space within the metropolitan statistical area (MSA) equates to 3.5 square feet per capita while the national average is 7.5 square feet per capita.

National Storage Association’s 2021 report highlighted the overall resilience in the self-storage industry even during times of economic downturn. The industry maintains high occupancy rates and stable cash flows generated from monthly lease payments. 

A report from market intelligence firm Yardi Matrix found that despite the economic downturn generated during the COVID era, occupancy rates remained over 92% during the 2020 fiscal year. According to research firm IBISWorld, self-storage facilities in the U.S. have maintained an occupancy rate of over 90% since 2005. Consumer demand for storage units is driven by the aging baby boomer and Generation X demographic looking to downsize, migrating and emigrating populations moving to and from city centers, a rise in e-commerce and increases in consumer possessions. 

The 133,698-square-foot Class A storage facility will have 1,111 climate-controlled units. The is 15 minutes from Queens in the densely populated area of Nassau County, where the average household income is $179,001.

For this self-storage portfolio, Barone Management entered into a joint-venture partnership with Tuck-It-Away Associates to develop the facility. Barone Management has extensive experience in the development and construction of real estate assets in the highly competitive New York City metro market. Over the course of its 20+ year history, the firm has built a portfolio of New York City assets across the hospitality, multifamily, office, and industrial sectors. Since its inception, the group has completed or is in the process of developing over 2.5 million square feet valued in excess of $800M.

Tuck-It-Away Associates brings strong self-storage expertise with previously completing 15 self-storage projects in New York City metro and Miami. The group has completed over 700,000 square feet of self-storage space valued at over $200M. 

View details on CrowdStreet’s offerings

Photo courtesy of CrowdStreet