July 17, 2018 – Levin Johnston of Marcus and Millichap, one of the top multifamily brokerage teams in the U.S. specializing in wealth management through commercial real estate investments, has successfully directed the sale of two institutional quality self-storage facilities in the highly desirable Los Gatos submarket of Silicon Valley, California.
Adam Levin, Senior Managing Director of Levin Johnston and Jacob Becher, Vice President of Investments and Associate Member of National Self Storage Group at Marcus & Millichap, represented the buyer, a private high net worth family seeking to expand its portfolio, as well as the seller, a private high net worth individual, in the transaction.
“This transaction is a strong example of value creation through diversification in the commercial real estate industry,” says Levin. “We brought in a buyer that historically invested only in multifamily properties and was accustomed to very tight cap rates. By bringing these two entities together, we were able to help the buyer diversify the family’s portfolio while also helping the seller to achieve a premium price that was attractive to both parties.”
Levin notes that the buyer understood the value in the strategy and recognized that the higher sale price was the key to securing the property while remaining well within its acquisition criteria.
“These are trophy assets in a high-end, core market where the residual land value will sustain and likely appreciate,” says Levin. “By approaching the transaction with a wealth management mindset, we were able to compete with national interest among self-storage buyers and ultimately direct a transaction that was a win for both the seller and the buyer.”
The two facilities, 688 University Avenue and 17443 Farley Road West, are located less than half a mile apart and within two miles of two primary Bay Area thoroughfares: SR-17 and SR-85.
“These two properties are located within a metropolitan area that has a population of two million, ranking as one of the largest in California,” says Levin. “The city of Los Gatos is one of the wealthiest places in the nation, ensuring long-term demand and value for the buyer.”
The Stor’ It Los Gatos facilities were constructed in 1999 and 2005 and include a mixture of climate-controlled and standard units ranging from 25 square feet to 300 square feet across 45,287 net rentable square feet. With a total of 785 self-storage units, the current square-foot occupancy is at 84 percent.
The facilities are in close proximity to major economic drivers including the Netflix Headquarters, the city’s largest employer. Los Gatos prides itself on maintaining a high quality of life for its residents in a business-friendly environment with a variety of shopping, dining and entertainment options.