- Andover Properties and Heitman launched joint ventures covering over 106 storage properties in 16 states, using value-add and core-plus approaches, with plans to expand.
- Both firms say current conditions allow purchases at discounted valuations, and Heitman says the entry point is well below replacement cost.
- Andover expects a rebound in rents and occupancy as new supply declines and demand strengthens, and sees fragmented ownership as room to add value.
Andover Properties and Heitman have formed joint ventures to build a national self-storage portfolio, starting with more than 106 properties in 16 states.
The partnership will use value-add and core-plus approaches, and the firms plan to add to the portfolio in more markets.
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Buying Below Replacement Cost
The firms say the point in the storage cycle favors buyers, since current conditions let them acquire quality assets at discounted valuations.
Heitman’s head of U.S. storage acquisitions, Doug Gurr, said the venture targets markets with solid fundamentals that should gain from demographic demand and limited new supply. He said today’s entry point allows purchases well below replacement cost.
Andover’s View
Andover President and CEO Brian Cohen said storage sits at an inflection point. After a period of post-COVID normalization, he expects rents and occupancy to recover as new supply falls and demand strengthens.
He also sees fragmented ownership as room to create value through Andover’s vertically integrated operating platform.
Who Brings What
Andover CIO Zach Harding called the ventures a milestone for the platform. He said Heitman’s long experience in storage, which dates to 1996, paired with Andover’s knack for finding deals and improving operations at each property should get the most out of the assets.
Why It Matters
Institutional capital keeps moving into storage, as CRE Daily reported when institutional capital targeted the sector as supply shrank. A platform of more than 106 properties gives both firms scale in a fragmented market.
The pitch is also a statement about timing. Buying below replacement cost and waiting for supply to ease is a bet on recovery, not a claim that it has arrived.
What’s Next
Andover and Heitman plan to add properties in more markets. Watch how fast they add properties and whether other institutional managers copy the discounted-entry approach.
