Buchanan Street Partners recently broke ground on a 99,500-square-foot storage property in Santa Cruz County, advancing its strategy to build a self-storage portfolio exceeding $1 billion.
Buchanan, which has $1.6 billion in assets under management, is redeveloping a 2.6-acre site at 10 Victor Square in Scotts Valley into a three-story, 760-unit self-storage facility.
Officials said it is scheduled for completion in April 2027. Demolition began in January.
Buchanan has partnered with DAI General Contracting as the general contractor and Valli Architecture as the project architect. East West Bank is providing construction financing.
Self-Storage Investments
Buchanan Street Partners acquired the property for $5.25 million from a private investor after roughly 14 months of entitlement work, according to CoStar.
The Scotts Valley project is the company’s eighth self-storage investment in California over the past five years and is part of an initiative that began in 2021 to acquire and develop self-storage assets in specific Western markets.
Buchanan officials say they have invested about $325 million in self-storage to date, with a primary focus acquiring assets in markets including San Francisco, Los Angeles, San Diego, Orange County and the Inland Empire.
The company has also invested in other markets such as Denver, Las Vegas, Phoenix, Portland, Seattle, Dallas and Austin.
“Self-storage has consistently proven to be one of the most resilient asset classes within commercial real estate,” Feerooz Yacoobi, senior vice president of Buchanan, told the Business Journal.
“Demand is driven by life events such as moving, downsizing, business formation, and family transitions, which occur regardless of broader economic conditions. Over the past decade, demographic tailwinds including population growth, housing affordability challenges, and smaller living spaces have supported long-term demand and increased consumer adoption.”
The investment comes as the self-storage business is hitting a bit of a plateau as 2026 begins, with the rent hikes of previous years finally cooling off, according to the Self-Storage Market Outlook report from Yardi Matrix.
According to the report, the average monthly rent for a unit hovered around $16.32 per square foot in December, a 0.3% year-over-year increase. The winter season is usually the slowest for demand due to a decline in moving activity.
Meanwhile, the report states that people are still paying slightly more for premium, climate-controlled spaces—similar to the ones that Buchanan likes to build.
Despite flattening prices, developers haven’t stopped building. There are more than 54 million square feet of new storage space under construction nationwide, with a massive concentration in Florida and the Southwest, the report states.
“We believe current pressure on rental rates is closely tied to the stalled housing market, which has limited household mobility,” Yacoobi said. “As residential transaction activity normalizes and people begin moving again, we expect storage demand to reaccelerate.”
Modern Facility
In Scotts Valley, Buchanan officials are betting on limited competition and an aging supply of storage facilities.
The newest comparable self-storage product in the area is nearly 25 years old, Jon Suddarth, vice president of Buchanan Street Partners, said in a news release.
The company is betting that a new modern facility could attract nearby residential and commercial users.
“We see strong and growing demand for Class A facilities that deliver a superior customer experience and operate more efficiently,” said Yacoobi. “Modern properties consistently achieve higher rents, stronger occupancy, and better long-term competitiveness, particularly in affluent, high-density markets where new supply is constrained.”
The project sits just off Highway 17 near a grocery-anchored retail center, Buchanan officials said.
Beyond Scotts Valley, Buchanan is developing additional self-storage facilities in Upland and the Bay Area.
Last fall, the company began construction on a new 1,025-unit, three-story, 66,250-square-foot Class A self-storage facility at 1341 San Mateo Ave. in South San Francisco.
Officials said they are banking on capitalizing on one of the most densely populated and supply-constrained markets in the Bay Area, where new development is scarce and rents fetch a premium.
In December, Buchanan also spent $21 million on a newly constructed, 103,000-square-foot Class A self-storage facility with 1,130 units at 9560 West Flamingo Road in Summerlin, a master-planned community in the Las Vegas area suburbs.
The climate-controlled property was 90% occupied. More than 162,000 residents live within a three-mile radius of the facility, and the area will soon be home to the $1.8 billion Summerlin Studios, Buchanan officials said.
Long Term Growth
Yacoobi said that for Buchanan Street Partners, self-storage is more than just a property type—it’s a long-term bet on how people live.
The Newport Beach investment firm launched its self-storage platform in 2021 with backing from high-net-worth and family-office investors, aiming to raise assets under management to a few hundred million.
Yacoobi says self-storage’s appeal lies in its stability, as it performs well in both strong and weak economies. For the latter, this was true during the Great Recession, when storage outperformed many other commercial property types.
“It’s a recession-resistant asset class,” he said. “If you think about it, self-storage does well in times of economic expansions, where you have growing consumer spending, people buying new homes, businesses growing, and a lot of economic activity and mobility. And then on the flip side, which is a sad part of our business, but we also serve a need and do well in terms of economic contraction.”
Since then, Buchanan has expanded its strategy. They now buy stabilized properties and develop ground-up projects from scratch in high-demand markets, in addition to purchasing newly built facilities.
Yacoobi said self-storage often acts like an extra room for consumers.
With housing costs high, especially in coastal California, many renters and homeowners use storage instead of extra closets, garages or spare bedrooms.
Yacoobi said about 1 in 10 or 11 Americans use self-storage, and many are women who prefer to store their items in newer, climate-controlled facilities.
The typical unit is about 10 by 10 feet, or roughly 100 square feet—enough space for a one-bedroom apartment’s contents. These units usually rent for $2 to $4 per square foot, which means many cost between $200 and $400 per month.
“We’re not trying to be the largest player in the sector, but we’re focused on institutional quality,” said Yacoobi. “With (our) West Coast assets, our goal is to build a high-quality portfolio that will appreciate over time and grow revenues. With the West Coast markets we focus on, we want to be attractive to any institutional investor looking to enter this space.”
