White Oak Real Estate Capital (“WOREC”), an affiliate of White Oak Global Advisors, and Thorofare Capital announced a $21.5 million two-year, floating rate senior loan for the acquisition and conversion of 78 Walker Street into a Class A, self-storage facility to-be operated by Public Storage. The loan was used to fund the acquisition of the eight-story property in the Tribeca neighborhood of Manhattan and includes future funding towards the construction and lease-up of the facility.
CSP Properties LLC, the new owner of the property, will convert the vacant former office and factory building into a 300-unit climate-controlled facility totaling 30,540 square feet, with a focus on larger units, the supply of which is meaningfully under the high level of demand in this area. Public Storage, the largest public self-storage REIT, will be operating and managing the facility after its completion.
“The project is in a great submarket in Manhattan for storage, and we believe this adaptive reuse will create significant value for all stakeholders,” said Eric Tanjeloff, Managing Principal of WOREC. “We continue to find excellent value-add opportunities for real estate lending in this currently dislocated market and are pleased to further our partnership with Thorofare.”
78 Walker is located in Lower Manhattan, a market with the highest barriers to entry and highest rents, according to reports from both CBRE and REIS, including an undersupplied sub-market by over 530,000 SF within a one-mile radius. The average occupancy rate amongst seven self-storage facilities within a three miles radius is over 93%. Public Storage, the operator, is the largest public self-storage REIT with 3,310 facilities totaling 235.8 million square feet across 2.290 million self-storage units globally.
Felix Gutnikov, Principal and Head of Originations at Thorofare, added, “recognizing that self-storage sales activity has been muted in this continued state of high rates and challenging capital markets, self-storage has demonstrated its resiliency with stable cap rates and strong institutional investor demand in urban locations of primary markets. We’re delighted to continue our storage lending and expand our exposure to the sector”.
This deal marks the second time WOREC and Thorofare have partnered on a self-storage loan, having previously provided a $27.8 million bridge financing to GoodFriend Storage in August of 2023. That loan was used for the lease-up of a newly expanded facility on the North Fork of Long Island.
White Oak Real Estate Capital, LLC (“WOREC”), an affiliate of White Oak Global Advisors, LLC, is a lender to the commercial real estate industry specializing in originating bespoke financing solutions secured by transitional assets. WOREC focuses on financing transactions of $20 to $100 million in size and lends across most major and growth markets across the U.S. The company is headquartered in New York City.