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Wednesday, Nov 29, 2023

Self-Storage Developers Are Not Slowing Down

Buskett, LaTerra among firms going all in on sector.

The self-storage sector has seen a surge of development recently with companies like Buskett Development Group and LaTerra Development planning facilities for the Valley.

Gregg Buskett, who operates Buskett Development Group, wants to expand a self-storage facility already under construction in Van Nuys.

Construction has been underway on Buskett’s site based on the city’s approval of a 2018 application. He intends to add an additional 80,000 square feet to his current project. In total, Buskett will create a three-story, 220,000-square-feet facility that should be completed in three years.

Buskett filed a planning application in late June to request a zone change and other approvals. For the expansion, the developer must raze 10 residential units. Buskett is also seeking a zone change to reduce parking requirements and a conditional-use permit that would allow the project to go within 500 feet of a residential zone, among other entitlements.

Located in the 6000 block of Woodley Avenue, the project is a couple of blocks east of the Van Nuys Airport. In the application, Buskett said the upgraded self-storage facility would provide a “buffer between the nearby residential zones … and the more intensive industrial and manufacturing uses to the west.”

The Van Nuys site that would host Buskett Development’s expansion consists of multiple parcels. Property records indicate that Buskett acquired two, which total about 0.3 acres, for $3.4 million in January. The homes on those properties were built in the 1950s and modified in the late 1970s.

Buskett’s plans reflect how lucrative the self-storage market has become. Throughout the pandemic, the sector emerged as a bright spot as locked-down residents sought to clear out crowded homes and convert spare rooms or garages into offices or ADUs. In 2021, occupancy rates at self-storage facilities nationally jumped to 95%, according to data from the Self-Storage Almanac, four points higher than the pre-pandemic figure. 

The average monthly cost of a 10-foot by 10-foot unit rose more than 1% in 2021. Share prices for national storage companies soared. Shares in ndustry giant Public Storage, headquartered in Glendale, have gained nearly 48% since the beginning of 2020. 

Even in the face of this year’s troubling economic headwinds, the sector has proved resilient. Earlier this spring, as some companies moved to bring employees back the sector saw another boom, and analysts predict it will remain relatively recession-proof.

Greater L.A. is at the forefront of the surge. According to a RentCafe analysis published last month, which used figures from the commercial real estate data company Yardi Matrix, more than 130 million square feet of new storage space is in the works across the U.S., representing a 9% increase in the country’s inventory. More than 6.3 million square feet of that total is planned for L.A., more than any other metro market except New York.

The development of self-storage complexes has been seen all over the Valley. In December, Redondo Beach-based developer Trojan Storage filed plans to build a complex in Sylmar that would include 27 one- and two-bedroom apartments. Century City-based LaTerra Development recently proposed to build two self-storage facilities totaling 135,065 square feet in Van Nuys and Mar Vista. The Van Nuys facility, to be built at 14876 W. Raymer St., would see the demolition of two structures — spanning 23,120 square feet and 2,396 square feet — to make way for a three-story, 76,885-square-foot self-storage complex. LaTerra will also build a 55,000-square-foot self-storage facility in Mar Vista.

LaTerra also has a 77,000-square-foot self-storage project going up in the North Hollywood/Burbank area. “Self-storage is complementary to our core apartment development business,” Chris Tourtellotte, managing director for LaTerra Development, said in a statement. 

Michael Aushenker
Michael Aushenker
A graduate of Cornell University, Michael covers commercial real estate for the San Fernando Valley Business Journal. Prior to the Business Journal, Michael covered the community and entertainment beats as a staff writer for various newspapers, including the Jewish Journal of Greater Los Angeles, The Palisadian-Post, The Argonaut and Acorn Newspapers. He has also freelanced for the Santa Barbara Independent, VC Reporter, Malibu Times and Los Feliz Ledger.

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