CubeSmart, the real estate trust and storage company, is buying up properties for a rash of new self-storage facilities in the Capital Region, as the industry continues to expand in the area.
Mark Hebert, of Kurz & Hebert Commercial Real Estate, says the company’s play in Louisiana represents millions of dollars worth of new multi-story, climate-controlled facilities. CubeSmart, a publicly-traded company, is among the largest self-storage companies in the U.S.
As the retail industry in the U.S.—and in Baton Rouge—faces existential challenges, self storage is in somewhat of a renaissance period. The industry set records for construction spending earlier this year, according to Bloomberg, in part because the facilities are relatively cheap to build and require few workers to staff. Another reason: After the financial crisis, investors turned to self-storage investments to hedge against future economic downturns.
CubeSmart has already begun work or closed on four new locations throughout Baton Rouge and one in Prairieville. Plans for at least five more are in the works but haven’t closed yet. Those include one in Gonzales that calls for a Racetrac as part of the development, and Hebert says the former Lone Star Steakhouse on O’Neal Lane is under contract for another. There are plans for a location on Highland Road near Ruffino’s Restaurant, as well as possible locations in Zachary and Denham Springs.
Multiple operators are behind the rash of new CubeSmarts, which are generally four-story buildings that cost $5 million to $6 million each to build.
Hebert says the flooding of many older self-storage units in 2016 could be driving some of the market growth. He also has represented deals for several CubeSmarts in New Orleans and Lafayette.
“Also this type of commercial investment will likely be less of a risk factor for a commercial loan,” he says.
StorageMax also recently entered the Baton Rouge market with plans for a 600-unit facility on Burbank Drive. The company, which has 21 locations in the south, cited a period of growth nationally that could explain the explosion in the Baton Rouge market.
Self storage is an almost uniquely American enterprise, according to the Self Storage Association: Of the roughly 60,000 self-storage facilities open in 2015, nearly 50,000 were in the U.S. Most of those were in suburban areas.
—Sam Karlin
