KAPOLEI, Hawaii — A brand new self-storage facility development is coming to Oahu.

DXD Capital, a New Mexico-based private equity fund, has acquired 2.34-acres of land in Kapolei and plans to develop a three-story 104,000 square foot, 853-unit self-storage facility on Kalaeloa Boulevard. 

What You Need To Know

  • A joint venture of DXD and Insite Property plans to develop a three-story 104,000 square foot, 853-unit self-storage facility in Kapolei

  • DXD Capital declined to disclose the price of their Kapolei development, but it's part of the private equity firm's latest $50 million investment in brand-new self-storage developments across the U.S. 

  • The coronavirus pandemic has fueled the growth and demand for self-storage

  • Construction is scheduled to start in August with the development expected to be completed by next September 2023

A DXD official did not disclose the price of the land acquisition nor the cost of development. DXD has partnered with Torrance-based Insite Property Group, which will develop and operate the asset under Insite's SecureSpace brand.

DXD and Insite's joint venture development comes as demand for self-storage, a niche industry in the commercial real estate sector, continues to grow and is further fueled by trends created by the coronavirus pandemic. 

The self-storage industry thrives in change, and the pandemic's impact on work and mobility has certainly fueled the industry's growth these past few years. With many people working remotely from home, and in some cases, moving to a different part of the country, there was a need for more space - and storage. 

"Many people are buying or renting smaller homes now, and people have a lot of stuff," said Drew Dolan, a fund manager at DXD Capital, to Spectrum News. "It has to go somewhere. There's not a lot of storage in apartments or some smaller homes. Self-storage is a very easy accessible way to store their stuff."

According to the Wall Street Journal, self-storage real estate investment trusts have outperformed other REITs except for mall and shopping center owners this past year. 

Last year, self-storage facilities nationwide had an average 92% occupancy rate, an industry official said citing the 2021 Self Storage Almanac.

There are more than 85 self-storage facilities in Hawaii, representing about four million square feet of storage space. Though the islands have seen a population decline due to the high cost of living, Dolan is banking on those that have remained and people moving in to fill their stuff in his company's new self-storage facility in the years to come.

Dolan said Kapolei is one of Oahu's fastest-growing areas with a resident population that expects to quadruple by 2035.

"Hawaii is an attractive market, especially with this work-from-home revolution," said Dolan. 

DXD purchased the property after raising $50 million in DXD Self Storage Fund in November, specifically to invest in the ground-up development of Class A self-storage facilities across the U.S. Along with the Hawaii project, DXD Capital has begun developing two other self-storage facilities, one in Las Vegas, Nevada, and another in Litchfield Park, Arizona. 

This year, the private equity firm is constructing 3,299 self-storage units.

Construction on the new Kapolei facility begins in August, with an opening scheduled for September 2023.