This article originally appeared in The Real Deal is a registered Trademark of Korangy Publishing Inc.
November 19, 2024
OC firm buys Upland site for redevelopment with eye on cost efficiency, inflation hedge One OC developer has decided to deal with current economics by focusing on one asset class: self-storage.
Buchanan Street Partners has bought a medical office building in the Inland Empire with plans to replace it with a 123,000-square-foot self-storage building.
The Newport Beach-based developer paid $6.25 million for the 6,200-square-foot Inland Medical Plaza at 1382 East Foothill Boulevard, in Upland, the Orange County Business Journal reported.
Plans call for bulldozing the 36-year-old medical offices on 2 acres and replacing them with a four-story, 1,180-unit self-storage facility.
The development deal marks Buchanan Street’s fifth investment in the self-storage sector, with purchases in Santa Clarita, Auburn, Chino Hills and Mesa, Arizona totaling 6,800 units.
Robert Brunswick, co-founder and chairman of Buchanan Street, told the Business Journal that self-storage facilities are more cost efficient than multifamily or industrial rents on a per square foot basis.
“Investors in general view self-storage much like multifamily as it provides for spread of risk with its diversified tenant base and a great hedge against inflation with the nature of its short-term leases,” Brunswick told the newspaper.
The company plans to build a $500-million-plus portfolio of “institutional quality self-storage assets throughout the Western U.S.” To date, it has invested $225 million, executives say.
The firm aims to invest in self-storage facilities valued at $10 million to $50 million.
“The Upland transaction follows our thematic approach to investing in well located self-storage properties in highly sought after Western U.S. markets with favorable supply and demand metrics,” Buchanan Street Partners Vice President Ferooz Yacoobi said in a statement.
He said a premium self-storage facility would fill a void in the marketplace in Upland. Pending approvals, construction could be completed by 2026. The cost of the project was not disclosed.
— Dana Bartholomew