New York City’s largest self-storage provider has lined up more than $2B in CMBS financing, doubling down on its local presence despite increased scrutiny of the industry.
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Manhattan Mini Storage is planning to refinance a 16-property portfolio with debt provided by Citi Real Estate Funding and Morgan Stanley Mortgage Capital Holdings, according to a KBRA presale report.
The collateral totals approximately 54,000 units across 2.2M SF in Manhattan. The portfolio, which includes 293K SF of commercial and other miscellaneous space, is nearly 87% occupied, based on a June rent roll.
The assets backing the loan are only a slice of Manhattan Mini Storage’s overall holdings. Since closing on a 15-property acquisition in January, the company has grown to 51 locations in the New York metropolitan area. It operates more than 4M SF of space in total.
The $2.1B floating-rate loan — being used to pay off a 2022 mortgage for the same amount — is expected to have a two-year initial term with three 12-month extension options. The transaction will close around Oct. 8, according to KBRA.
The properties are located across 10 neighborhoods, with the largest concentrations in Chelsea, SoHo and Harlem. Between 2022 and 2025, Manhattan Mini Storage invested $42M to upgrade the properties, including $16.2M to expand and modernize 420 E. 62nd St., the largest property offered as part of the collateral.
Manhattan Mini Storage dominates the Manhattan market with 58% of the existing storage space — twice as much as its nearest competitor — according to Crain’s New York Business. The publication first reported the transaction.
Billionaire businessman Stan Kroenke’s StorageMart purchased Manhattan Mini Storage in 2021. At the time, the Manhattan-based company had just 18 locations.
Kroenke is the largest private landowner in the U.S. and owns the NFL's Los Angeles Rams, the NBA's Denver Nuggets, the NHL's Colorado Avalanche, and Arsenal of the English Premier League. This month, he struck a deal to buy the MLB's Los Angeles Angels.
StorageMart holds $10B in assets under management, with 30M SF of storage space worldwide. In the second quarter, the privately held company announced net operating income growth of 5%, driven by rising rental rates.
The self-storage market is particularly strong in New York City, where two-thirds of the population are renters and 39% of housing units are studios or one-bedrooms. In July, the average rate for storage space was $35.16 per SF, more than double the average national rate, according to Yardi Matrix.
New York City is also one of just four metro areas where advertised rates have increased year-over-year for both nonclimate-controlled and climate-controlled units, Yardi’s report noted.
The lucrative nature of self-storage — and its necessity for customers in space-starved Manhattan — has caught the attention of Mayor Zohran Mamdani’s Department of Consumer and Worker Protection. The agency has sought to curb junk fees and other predatory practices across the board, cracking down on delivery driver apps, hotels and medical providers, among others.
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In a February lawsuit against Extra Space Storage, the city alleged that the company routinely spiked prices without notice and failed to maintain the units. Prosecutors said the company was “not unique in using these deceptive tactics” but that it had more verifiable consumer complaints than the other companies probed by investigators.
A DCWP press release claimed that bait-and-switch tactics are “endemic” in the self-storage industry.
“What we see is companies taking advantage of the fact that they can literally hold people’s stuff hostage,” DCWP Commissioner Sam Levine told Curbed in February.
Extra Space Storage settled for $1.7M in July. In a statement to Crain’s, the company maintained its innocence but said, “We chose to settle this matter to best serve the interests of our customers, team members, and stakeholders.”
The increase in enforcement follows regulation passed last year requiring self-storage facilities to obtain licenses from DCWP.
As part of the requirement, which took effect in August, businesses must submit a sample of contracts used and a rate schedule. Any rates not included in the application may not be charged at a future date unless the company first notifies DCWP in writing.
New York City regulators have also increased regulation of the greater industrial market. Other legislation has targeted third-party logistics companies and last-mile delivery facilities.
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