The largest property sale in the Bronx since the collapse of Lehman Brothers Holding Company has closed, according to records filed with the city last week. The property, a storage facility at 1880 Bartow Avenue in the Baychester section of the Bronx, sold for $59.27 million, the records show.
The 147,520-square foot building, at Ely Avenue, is part of the asset class that constitutes the best investment in real estate right now, as Bloomberg News reported last week.
Storage facilities produced the best risk-adjusted return among 10 U.S. real estate investment trust indexes in the past decade, according to the Riskless Return Ranking, a survey from Bloomberg News. Storage units had the highest total return and the third-lowest volatility of all real estate asset classes, for a risk-adjusted gain of 10.6 percent, Bloomberg said.
CubeSmart, a Wayne. Pa.-based real estate investment trust in the process of expanding its New York City presence bought the property, which opened only last September, from Storage Deluxe, a New York City-based self-storage company.
The $59 million purchase is part of a larger deal to acquire 22 self-storage facilities from Storage Deluxe for a total of $560 million, including the assumption of $88 million in debt. CubeSmart entered into a contract to buy the massive portfolio last October, according to a statement from the REIT at the time. When all of the transactions in the 1.6 million-square-foot portfolio close, CubeSmart will be the largest owner, by number of assets, of self-storage facilities in New York City, with a total of 21 facilities, the statement said.
“Going forward, more than 60 percent of our portfolio net operating income will be derived from our core markets, a 43 percent improvement from January 2008,” Christopher Marr, CIO of Cube Smart, said in the statement. “The New York, Miami, Washington, D.C., Chicago and Dallas metro areas will be our top five markets upon completion of the acquisition [of the portfolio].”
Calls to the buyer and the seller were not returned.
— Additional reporting by Adam Pincus