Extra Space Storage acquires $56.2M stake in LIC storage from Life Storage

Extra Space Storage Inc. acquired a $56.2 million stake from Life Storage equating to a 72 percent interest in the storage building (E7) at 29-01 Review Avenue in Long Island City, Queens.
The deal closed on July 20, 2023 and was recorded on November 29, 2023. The property has 143,700 square feet of built space for a total buildable of 143,745 square feet according to a PincusCo analysis of city data.
This is an entity level transaction for 72 percent valued at $56.2 million reflecting the merger of Life Storage into Extra Space Storage, a REIT headquartered in Salt Lake City. Manhattan-based Equator Capital Management originally owned a stake in the property but PincusCo could not determine its current stake, however the property remains on the Equator website. In January 2017, Life Storage acquired from Equator Capital Management a 60 percent stake of the property for $57.8 million. Equator developed the property with Life Storage after buying the site in 2015. Life Storage merged into Extra Space Storage following shareholder approval in July 2023.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Extra Space Storage Inc. purchased two properties in one transaction for a total of $15.3 million and has no record it sold any properties over the past 24 months.
The seller Life Storage purchased four properties in three transactions for a total of $70 million and had not sold any properties over the same time period.

The property

The industrial building in Long Island City has 143,700 square feet of built space for a total buildable of 143,745 square feet according to a PincusCo analysis of city data. The parcel has frontage of 230 feet and is 125 feet deep with a total lot size of 28,749 square feet. The zoning is M1-3 which allows for up to 5 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $18.6 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on December 16, 2016. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Long Island City, The bulk, or 32 percent of the 60.1 million square feet of commercial built space are industrial buildings, with elevator buildings next occupying 31 percent of the space. In sales, Long Island City has the 9th highest sale turnover among other neighborhoods in the city with $1.8 billion in sales volume in the last two years. For development, Long Island City is the 4th most active neighborhood among other neighborhoods. It had 8.6 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of three of the six commercial properties representing 385,100 square feet of the 583,483 square feet. The largest owner is Storage Post, followed by Shlomo Karpen and then Life Storage.
There are no active new building construction projects on this tax block.

All properties are industrial.

The seller

The PincusCo database currently indicates that Life Storage owned at least seven commercial properties in New York City with 549,827 square feet and a city-determined market value of $68.7 million. (Market value is typically about 50% of actual value.) The portfolio has $14.4 million in debt, borrowed from Northwestern Mutual Life Insurance. Within the portfolio, all identified are industrial properties. The bulk, or 63 percent of the built space, is in Queens, with Brooklyn next at 28 percent of the space.

The buyer

The PincusCo database currently indicates that Extra Space Storage Inc. owned at least three commercial properties in New York City with 101,647 square feet and a city-determined market value of $12.8 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are industrial properties. The bulk, or 55 percent of the built space, is in Brooklyn, with Bronx next at 45 percent of the space.

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