SROA Capital sold a 15-property self-storage portfolio to Washington Street Investment Partners LLC, operator of the LocalStorage Group brand, for $98 million in late Q1 2026. The portfolio spans seven properties in Kentucky, seven in South Carolina, and one in Florida, totaling approximately 832,000 net rentable square feet and 6,600 units. Occupancy at time of sale was 90% across the portfolio.
JLL Capital Markets represented SROA in the transaction. The JLL team was led by Managing Director Griffin Guthneck and Senior Managing Directors Brian Somoza and Steve Mellon, with Directors Adam Roossien and Matthew Wheeler handling execution. The deal closed as SROA transitions capital out of earlier-vintage fund assets and into its newly closed Fund IX, which raised more than $1.1 billion in total commitments.
At $98 million for 832,000 square feet, the portfolio priced at approximately $118 per rentable square foot and $14,850 per unit. For secondary and tertiary market institutional self-storage, those metrics reflect a clean exit on a well-occupied, institutionally maintained asset base.
Why Is SROA Selling Now?
SROA Capital is not exiting self-storage. It is cycling capital across fund vintages.
In October 2025, SROA closed Fund IX with $865 million in primary commitments and an additional $250 million in co-investment from limited partners, total commitments of $1.1 billion from public pensions, foundations, endowments, and insurers. The $98 million Kentucky-South Carolina-Florida portfolio represents an earlier-fund holding, not a core strategic asset at the firm's current scale.
"This portfolio was part of one of our earlier funds, and we're proud to deliver strong returns to investors who have been with us for more than a decade. It reflects the quality of the assets as well as our disciplined approach to building long-term value."
- Benjamin Macfarland, Founder and CEO, SROA Capital
SROA ended 2025 with more than 720 locations across 32 states and acquired 58 properties during the year alone. For a firm at that scale with $1.1 billion in fresh capital to deploy, a 15-property portfolio in Kentucky and South Carolina is a natural candidate for portfolio optimization rather than a long-term hold.
What Does Washington Street See in Kentucky and South Carolina?
Washington Street Investment Partners operates with a stated focus on secondary and tertiary U.S. markets, the exact geography that large REITs and the biggest private-equity platforms generally avoid. That market positioning is the direct logic behind this acquisition.
Kentucky and South Carolina are not gateway markets. They are not the Sun Belt metros with aggressive construction pipelines that have been suppressing street rates in Phoenix, Austin, and Tampa. They are mid-sized markets where population growth is steady, where institutional operators are present but not dominant, and where supply-to-demand ratios are more favorable than the national headlines suggest.
The LocalStorage Group acquisition immediately establishes Washington Street as a market leader in multiple sub-markets across both states. That scale matters operationally: a dominant-market position allows for more efficient marketing, reduces per-unit management overhead, and gives the operator pricing authority that a one- or two-facility presence in the same market cannot support.
The 90% occupancy across the portfolio is the data point that matters most. Stabilized assets at 90% occupancy in secondary markets, selling at roughly $118 per square foot, are not deeply discounted assets or distressed plays. They are functioning, income-producing portfolios being priced to reflect secondary market cap rates rather than gateway market compression.
How Does This Deal Fit the Broader Q1 2026 Acquisition Pattern?
The SROA-Washington Street transaction is not an isolated data point. Q1 2026 produced several meaningful institutional transactions, each reflecting a distinct capital thesis.
Harrison Street Asset Management and Morningstar Properties acquired a 21-property self-storage portfolio totaling 1.3 million net rentable square feet and more than 10,800 units across Texas, North Carolina, South Carolina, Florida, Georgia, Virginia, and Arkansas. The portfolio was 90% occupied at closing and registered a 21% increase in move-in volume year-over-year. Morningstar is continuing to manage the assets. Harrison Street and Morningstar have operated as a joint venture since 2007, completing 41 self-storage investments across five Sun Belt states, and this transaction represents a continuation of that established platform rather than new market entry.
North Palisade Partners made its first East Coast acquisition in March 2026, purchasing a two-property climate-controlled portfolio in Philadelphia's Northern Liberties neighborhood for $39.3 million. The properties at 40 Spring Garden Street and 510 North Christopher Columbus Boulevard together total 199,288 rentable square feet in 2,298 units. Extra Space Storage continues to manage both facilities under a branding arrangement. North Palisade is targeting $400 million to $500 million in total self-storage asset aggregation over 36 months, focused on undersupplied dense markets including Los Angeles, Washington D.C., and Seattle.
Three deals, three distinct theses: secondary market scale-building, established Sun Belt joint venture expansion, and coastal undersupply arbitrage.
What Does the Pricing Say About Secondary Market Valuations?
The $98 million price and implied metrics tell a coherent story about where secondary market self-storage is trading in early 2026.
At $14,850 per unit, the portfolio priced well below the per-unit values typical for gateway market assets. Class A facilities in coastal cities can trade at $30,000 to $40,000 per unit and above. Secondary market pricing at $14,000 to $18,000 per unit with 90% occupancy and institutional-quality maintenance reflects a cap rate environment that still offers real spread over the low-5% range seen in primary metros.
That spread is why secondary market acquisition activity has been consistent even as overall transaction volume remains below 2021-2022 peak levels. The capital markets math favors secondary and tertiary markets for buyers who can operate at scale and accept the management complexity of geographically distributed smaller portfolios.
SROA's $1.1 billion Fund IX will likely deploy into a mix of acquisitions and development. Having demonstrated returns on a 10-year-plus hold across the Kentucky and South Carolina markets, it is not unreasonable to expect SROA to reenter similar secondary markets with Fund IX capital as values in primary metros remain compressed.
What Does This Mean for Independent Operators in These Markets?
The direct implication for independent self-storage operators in Kentucky and South Carolina is straightforward: Washington Street is now a significantly larger competitive presence in multiple sub-markets, and they are operating with the cost structure and marketing reach of a vertically integrated institutional platform.
For a 1-3 property independent operator competing in those submarkets, the relevant question is not whether Washington Street's arrival changes the market today. It is whether the operator wants to be competing against 832,000 square feet of institutionally operated storage in three to five years when Washington Street has had time to rebrand, upgrade operations, and fully deploy its revenue management systems.
The $98 million portfolio sale also signals to other independent owners in these markets that institutional buyers are active and that the current pricing environment supports a clean exit at reasonable multiples. Secondary market cap rates in the 6.5% to 7.5% range for occupied, institutionally maintained assets translate to real valuations for operators who have held quality facilities for a decade or more.
Owners in Kentucky and South Carolina who have been watching transaction activity and wondering whether 2026 is the right time to sell now have a direct comp to benchmark against.
The Numbers Worth Writing Down
- $98 million total purchase price for 15 properties (7 Kentucky, 7 South Carolina, 1 Florida)
- 832,000 net rentable square feet; 6,600 units; 90% occupied at close
- Implied pricing: approximately $118/sq ft and $14,850/unit
- SROA Fund IX: $1.1 billion total commitments ($865M primary + $250M co-investment), closed October 2025
- SROA national footprint: 720+ locations across 32 states as of year-end 2025; 58 acquisitions in 2025 alone
- Harrison Street/Morningstar: 21 properties, 1.3M sq ft, 10,800+ units, 90% occupied, 21% move-in growth YoY
- North Palisade Philadelphia: $39.3M, 199,288 sq ft, 2,298 units; targeting $400-500M total platform
- North Palisade target markets: LA, D.C., Seattle (undersupplied dense urban)
The Return Is the Signal
The SROA/Washington Street transaction is a fund lifecycle story as much as an acquisition story. SROA built a 15-property portfolio in secondary markets, held it for more than a decade, achieved 90% occupancy, and returned strong performance to investors. That outcome is the underlying signal: secondary market self-storage, properly underwritten and operated, continues to deliver institutional-quality returns even in a national market characterized by rate compression.
Washington Street is making the same bet that SROA made a decade ago, in the same geographic band, with the same operating model. The difference is scale: at 832,000 square feet acquired in a single transaction, Washington Street is entering these markets as a dominant operator from day one rather than building position over years. Whether that scale advantage translates into accelerated NOI growth will depend on execution, but the foundational thesis, secondary market self-storage in growing Southeastern sub-markets, is unchanged.
Sources
- Washington Street Buys Self-Storage Portfolio From SROA, Inside Self-Storage
- SROA Capital Sells 15-Property Self Storage Portfolio for $98M, Multi-Housing News
- 15-Property Self-Storage Portfolio Sells for $98 Million, JLL Capital Markets
- SROA Capital Closes Self-Storage Fund With $1.1B Raised, Inside Self-Storage
- Harrison Street Acquires 21 Self-Storage Properties, Inside Self-Storage
- North Palisade Partners Acquires Philadelphia Self-Storage Portfolio, Connect CRE
- 2 Self-Storage Properties in Philadelphia Fetch $39.3M, CRE News
- North Palisade Partners Expands Self-Storage Platform, Adds Senior Executive to Lead $400M of Capital Deployment, Inside Self-Storage