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Big Yellow Goes for REIT Status

Article-Big Yellow Goes for REIT Status

Big Yellow Group, one of the largest operators of self-storage in the United Kingdom, has been holding discussions with HM Revenue and Customs (HMRC) to determine whether it can convert to a real estate investment trust (REIT). HMRC, the organization that collects and administers the U.K.'s tax revenue and related benefits, must agree to change tax treatment of Big Yellow's self-storage rental income from Schedule D to Schedule A, a necessary REIT qualification.

While Big Yellow has not yet reached an accord with HMRC, it has made the election for REIT status to preserve the expected benefits from the earliest date. As expected, HMRC objected to the notification, but has agreed to continue negotiations with the company. Big Yellow's board of directors believes the conversion will ultimately be successful.

For more information, visit www.bigyellow.co.uk.

ISS Blog

Green Building

Article-Green Building

I'd like some input from self-storage builders and operators who support and/or use "green" buildingenergy-saving and environmentally friendly building techniques, technology and practices. I'm thinking about this today because while I'm sporting a wool sweater and socks to keep warm in Arizona, my family in New England has been reporting record high temperatures. What the hey? And people still want to pretend there's nothing amiss with our global climate? They're either sadly disullusioned or dreamily high. Wow.


From time to time, you pick up an industry publication and read about cool things storage developers are using to do their share for the planet. Solar systems. Grass "pavers" that clean and help recycle storm water. That sort of thing. But I don't get the sense that this is a pervasive industry practice. I'd like to learn more, so if you know of some environment-friendly building techniques for storage or, better yet, have used some, please post to the blog and share them with me and our readers.


By the way, Michael Roth and Ted Williams of TLW Construction will be presenting a seminar on this topic at the upcoming Inside Self-Storage Expo in Las Vegas. "Green Building and the Bottom Line" will take place on Wednesday, Feb. 21, at 1 p.m. I plan to check that out. If you'd like more info, you can peruse the ISS Expo website at www.insideselfstorage.com/expo.


I once visited a "green" house sponsored by a local energy provider ... It was for an article I was writing for a small trade paper called The Electric Times (my first "real" job). This place was amazingeverything was based on recycled, energy-conscious, energy-saving materials and technologies. The thing I most remember was the carpet was made from recycled plastic soda bottles. I don't know if this structure is still open to the public (I can't even remember it's formal title). But it was extremely impressive.


Anybody by chance know what I'm talking about?

UNITS Mobile Storage Expands Franchise Chain

Article-UNITS Mobile Storage Expands Franchise Chain

John Islands, S.C.-based UNITS Mobile Storage, with an eye toward opening 50 franchise locations by 2011, added four facilities in North Carolina, bringing its current count to seven. The new franchises are in Greensboro, High Point, Raleigh-Durham and Winston-Salem.

States targeted for future expansion include Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia and West Virginia. A potential franchise territory must have a population of at least 400,000.

UNITS franchisees generally invest from $250,000 to $500,000, including a one-time franchise fee that ranges between $40,000 and $60,000. In addition, they should own a storage facility of at least 25,000 square feet with 30-foot-high ceilings, plus a heavy-duty delivery truck and a lift truck capable of lifting a minimum of 15,000 pounds. Finally, they must purchase at least 10 containers before opening their business. It will take approximately 18 months for franchisees to recoup their investment, according to company founder and president Michael McAlhany.

As part of their venture, franchise owners get a week of training at the UNITS headquarters as well as sales, marketing and operational tools to help them develop their territories and manage operations.

UNITS containers are designed to resist water, mold and UV rays and have a lifespan of more than 10 years. The companys most popular unit size, 8-by-16 feet, is large enough to accommodate the goods of an average 1500-square-foot house. The company also sells packing and moving supplies.

The moving and storage industry has seen significant growth over the last two decades and shows no signs of slowing down, McAlhany said. With more than 41 million Americans moving yearly, UNITS is offering a tremendous business opportunity in a widely untapped market with a steadily growing client base for years to come.

UNITS (unique, no hassle, individual, transportable storage) was launched by McAlhany in 2003. For franchise information, call 866.495.2570; visit www.unitsstorage.com.

Boat/RV Storage: Questions Answered at Inside Self-Storage Vegas Expo

Article-Boat/RV Storage: Questions Answered at Inside Self-Storage Vegas Expo

Self-storage professionals interested in learning more about boat and RV storage will get their questions answered at the Inside Self-Storage Las Vegas Expo, Feb. 20-23, 2007, at the Mandalay Bay Resort & Casino. Show participants are invited to attend a special Q&A session on this popular ancillary service on Friday, Feb. 23, 9:45 - 11:15 a.m. The panel of speakers, qualified to answer questions on boat/RV facility operation, development, marketing, construction and legal issues, will include:

  • Terri Heil, business development manager of Lake Havasu RV & Boat Storage
  • Ed Heil, manager of operations and security for Lake Havasu RV & Boat Storage
  • Jeffrey Greenberger, self-storage legal expert and owner of Selfstoragelegal.com
  • Bob Hayworth, owner of Baja Construction Co.

The ISS Vegas Expo is the self-storage industrys largest international conference and tradeshow. It is sponsored by Inside Self-Storage magazine, a monthly publication that has been dedicated to the needs of storage owners, operators, managers, investors, developers and suppliers for more than 16 years. For information and to register for the expo, visit www.insideselfstorage.com/expo.

SIA Fundraiser Nets Thousands for Social Service Support

Article-SIA Fundraiser Nets Thousands for Social Service Support

The Giving Season Initiative, a holiday-season fundraising effort led by Storage Investment Advisors LLP (SIA), a Houston-based investment real estate services firm focused on the self-storage industry, and its Indianapolis-based marketing firm, The Streetview Group, netted thousands of dollars in donations to support social-services agencies in Houston, Indianapolis and Los Angeles. The donations were raised through an appeal program directed to self-storage owners and industry-related service companies. Storage Choice, a Dallas-based facility owner, supported the effort by processing electronic contributions.

The fundraiser recipients were:

  • Child Advocates, a Houston-based agency that guides more than 1,750 abused children each year to safe environments where they can thrive. 
  • The Downtown Women's Center, a Los Angeles group that provides meals, housing, healthcare, educational and other supportive services to help homeless women achieve self-sufficiency.
  • Dayspring Center, an Indianapolis organization that provides emergency shelter, clothing, meals, case-management services and transitional housing support to 150 homeless families annually.

"SIA and Streetview are committed to helping worthy organizations in our hometowns, and we were overwhelmed by the generosity of our friends, colleagues and clients in the self-storage industry who participated in the Giving Season Initiative. One hundred percent of their support was directly applied to providing abused children and homeless families with holiday gifts, food, clothing and basic life necessities, said Aaron Swerdlin, SIAs managing partner.

Founded in 2006, SIA manages self-storage property dispositions, acquisitions and capital market executions/financing on behalf of institutional and private capital clients. Its team members have bought, sold, brokered and financed more than $1 billion worth of self-storage real estate. For more information, visit www.siallp.com.  

ISS Blog

Not With a Whisper ... but a BANG

Article-Not With a Whisper ... but a BANG

We kicked off the 2007 Legal Learning webinar series yesterday. I was foolishly concerned we would loose momentum in attendance because we had skipped an event in December, but this was not the case. On the contraryit was one of our most widely attended webinars to date! Props to our presenter, industry legal expert Jeffrey Greenberger, whose expertise and wit keep bringing participants back for more.


Of course, you all know you can attend these legal webinars for free, right? All you have to do is register via the ISS website. Look at the menu at top of this very web page ... You should see a link for "Industry Events," which includes "Webinars" in its drop-down menu. Once you get to the webinar page, you'll choose the "Upcoming" link at the top to view all our active event offerings. Registration is a snap and costs you nothing.


After you register for your webinar of choice, you'll receive a confirmation e-mail from the Microsoft Meetings system that includes a link, phone number and access code to participate. Then all you have to do is make sure you're in front of you computer at the designated day and time.


Apparently, this last bit is more difficult than it sounds ... After yesterday's session, I was contacted by at least 20 people who said they'd missed the webinar due to confusion about the time. Some has mis-penciled it on their calendars, but most were unclear about how to translate Eastern Time to their own zone. (We always post webinar times in ET for the sake of consistency, since we live in Arizona, the only state that DOESN'T use Daylight Savings Time).


So here's a quick summary: All ISS Legal Learning Webinars take place on the second Tuesday of the month at 11:30 a.m. ET and last one hour. If you live in the Pacific time zone, that's 8:30 a.m. for you. It's 9:30 a.m. Mountain time and 10:30 a.m. for Central. If you're not a U.S. resident, then I suppose you'll need to go online and look up a handy-dandy world time-zone map that shows the difference in hours to your particular location.


Legal Learning is catching on, and for good reason: For one hour out of your month, you get a bunch of highly valuable, free information on a legal topic of extreme relevance to your business. You simply cannot lose on that deal. So consider joining us for next month's session, "Limitation on Value Clauses for the Self-Storage Lease," on Feb. 13th.


Oh, did I mention we reserve at least 10 minutes at the end of each webinar for Q&A with Jeff, and everyone who attends can request a copy of his super-special handout? (For the record, no, we do NOT distribute copies of the actual presentation, so please make sure you're there to see it live if the topic interests you!)

Beacon Closes More Than $20M in 4Q 2006 Loan Transactions

Article-Beacon Closes More Than $20M in 4Q 2006 Loan Transactions

Beacon Realty Capital, a Chicago-based commercial real estate financial services firm with a specialized self-storage lending group, closed $20.3 million in self-storage loans in the quarter ending Dec. 31, 2006. The company completed these transactions with five different lenders for properties in Alabama, Delaware, Florida, Illinois, New York, Texas and Wisconsin.

The 4Q transactions used a variety of lending techniques. In one, Beacon arranged for an earn-out where the borrower was able to pay off his existing property debt and access a portion of his initial investment at the funding of the new loan. In nine months, the borrower will be able to increase his leverage based on the facility's fully stabilized value. In another transaction, Beacon's team was able to achieve an 85 percent leverage level for a $7.5 million facility acquisition. The company also secured fixed-rate debt with interest-only terms for three to five years on several of the periods transactions.

Established in 1985, Beacon arranges debt and equity financing for new and existing projects, advises on the acquisition and disposition of real estate assets, and provides commercial loan servicing for correspondents. In 2006, the firm closed loans totaling more than $683 million. For more information, visit www.beaconrealtycapital.com.

Inside Self-Storage Expands With Industry Crossword Fun

Article-Inside Self-Storage Expands With Industry Crossword Fun

A fun new feature will appear in future issues of Inside Self-Storage magazine: a crossword puzzle tailored to the industry. The brainteaser includes storage-specific terms and company names that complement the publications monthly theme. It will be printed on the last editorial page of each installment and available for download on the first of each month at www.insideselfstorage.com.

Readers can enjoy the game starting with the ISS February edition, the official show issue of the Inside Self-Storage Las Vegas Expo, the industrys largest conference and tradeshow. Those who successfully complete the puzzle may enter a drawing to win a deluxe I love the ISS Vegas Expo poker set. For details, see page 168 of ISS February, or access the online version. (Once at the ISS website, click on the link for ISS Magazine and look for ISS Puzzler in the online table of contents.)

The puzzle is created by Myles Mellor, an internationally published crossword writer who specializes in themed puzzles for magazines and newspapers. His creations reach more than a million readers monthly.

Universal Insurance Adds Self-Storage Pollution Coverage

Article-Universal Insurance Adds Self-Storage Pollution Coverage

Universal Insurance Facilities Ltd. now offers pollution legal liability insurance for the self-storage industry. The new coverage provides for on-site cleanup as well as legal expense and defense in situations involving pollution conditions. Underwritten by a company rated A+15 by A.M. Best, the product is available to all eligible storage facilities nationwide.
 
According to Universal, pollution conditions is currently defined as: the discharge, dispersal, release or escape of any solid, liquid, gaseous or thermal irritant or contaminant, including but not limited to smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, medical waste and waste materials into or upon land, or any structure on land, the atmosphere or any watercourse or body of water, including groundwater, provided such conditions are not naturally present in the environment in the amounts or concentrations discovered.
 
The discovery of meth labs at self-storage facilities is a bona fide concern, said Randy Tipton, president of Universal. Most insurance policies have specific pollution exclusions. Pollution legal liability insurance will provide protection not readily available to the self-storage industry. This will give facility owners an insurance solution to a real hazard that is currently uninsured.
 
For more information, call 800.844.2101; e-mail [email protected]; visit www.universalinsuranceltd.com.

REAL ESTATE

Article-REAL ESTATE

If you have a sales, grand opening, groundbreaking or other transaction you would like listed here, e-mail detailed information and a high-resolution digital photo, if available, to [email protected].

Barker Pacific Group, in a venture through its affiliate Union Development Co., recently acquired an eight-property portfolio and retained Buchanan Storage Capitalfor $19 million in financing. The properties are located throughout California and include more than 500,000 in net rentable square feet and 4,000 units. The portfolio was sold by Empire Companies for just over $30 million and will operate under the Storage Solutions brand.

Buchanan structured an aggressive fixed-rate loan that funded below breakeven debt coverage and a letter of credit to secure full proceeds. Additionally, the financing featured five years of interest only, followed by a 30-year amortization schedule.

With the acquisition of Empire Self Storage, Los Angeles based Union Development Co. now owns a total of 18 self-storage properties, adding to its existing 1.8 million-square-foot commercial real estate portfolio. Info: 800.675.1902, www.buchananstoragecapital.com

Michael A. Mele and Kevin R. Gordon of The Mele Storage Group announced the sale of Murphys Mini Storage. The 14,136-rentable-square-foot facility in Winter Haven, Fla., was sold to a local business owner entering the self-storage industry. The Mele Storage Group of Marcus & Millichap, Tampa,represented the seller.

Farmington Hills, Mich.-based Pogoda Management Co. was awarded contracts to open and manage a new 350-unit self-storage property in Clarkston, Mich., and to re-brand and manage an existing 505-unit property in Warren, Mich. The 28,175-square-foot first phase of Maxx Self-Storage in Clarkston features heated and cooled storage spaces; a covered loading area; drive-up storage spaces; RV and boat storage along with a dump station, security cameras and video taping; and a computer-controlled access system.

Pogoda also assumed management of the 82,500-square-foot former Safety Mini Storage and renamed it National Storage Center of Warren. Re-branding included new managers, a logo, marketing program, website and operational resources. Info: 616.538.9900, www.pogodaco.com

Grubb & Ellis|BRE Commercial facilitated the sale of Corona Self Storage, a 62,339-square-foot facility in Riverside, Calif. The sale was valued at more than $6 million. The seller was Corona Self Storage. The buyer was Santa Monica-based The William Warren Group Inc.,which will operate the facility under its trade name, StorQuest Self Storage.

The William Warren Group currently owns and operates 35 facilities throughout the West and Hawaii. Corona Self Storage has 497 units and 102 RV, boat and vehicle storage spaces. Built in 1984, the project is 90 percent occupied.

Greg Wells and Joe Saltzman of Grubb & Ellis|BRE Commercial handled negotiations on behalf of both the buyer and seller. Grubb & Ellis|BRE Commercial is a San Diego-based commercial real estate brokerage firm. Info: www.brecommercial.com 

Carefree Center a 65,000-accommodate small-provides onsite storage from high-is the developed locations and Hudson, Argus Self Storage Sales Network broker affiliate W. Frost Weaver, of Weaver Realty Group Inc., represented the seller of D&D Storagein Kissimmee, Fla. The 45,950-square-foot property, which includes expansion land, sold for $3.2 million at a 7.9 percent cap rate. Info: 800.55.STORE, www.selfstorage.com

Nick Malagisi, senior advisor and national director of self-storage for Sperry Van Ness in Williamsville, N.Y., and associate broker, Thomas Ruthven, completed two transactions totaling $3.8 million for two facilities. The company represented the buyer, a New York-based private investor and the seller, Personal Storage Systems, in the sale of a $1.3 million property in Batavia, N.Y. The facility closed at $38 per square foot net rentable. The site, built in 1985, has seven buildings and a managers office. The property can be expanded by three buildings for a combined 16,860 square feet.

The second sale, a $2.5 million facility in Wheatfield, N.Y., closed at a price of $55 per square foot net rentable, sold by a private investor to American Mini Storage. The 365-unit site consists of five self-storage buildings, a free-standing retail managers office, a two-family home and a two-story remodeled barn. It opened in 2004 and achieved 90 percent occupancy in its first year of business. Info: 716.633.9601, www.svn.com

Simply Self Storage purchased a self-storage portfolio consisting of 48 properties in six states from EZ Storage.The facilities total 3.7 million rentable square feet and 30,800 units in Massachusetts, Michigan, Minnesota, Ohio, Rhode Island and Texas.

Simply also bought a new site incorporating 316 units in 26,000 rentable square feet in St. Clair Shores, Mich. The company has offices and self-storage projects totaling more than 10 million square feet and nearly 150 operating facilities in 16 states and Puerto Rico. Info: 407.248.7878, [email protected]

Carefree Self-Storage & Business Center opened in Rogers, Minn., offering a 65,000-square-foot first phase to accommodate a variety of storage and small-business requirements. The facility provides office suites and temperature-controlled storage, with drive-thru service, onsite managers and oversized RV storage and power doors. Office suites, from 325 to 1,700 square feet, incorporate high-speed Internet and all utilities. This is the fourth Carefree Self-Storage facility developed by owner Al Schrader. Other locations are in Blaine and Fridley, Minn. and Hudson, Wis.

Marc Boorstein, principal with MJ Partners Real Estate Services announces the sale of the LifeStorage Chicago portfolio of six newly opened self-storage facilities and Sauk Trail Self Storage for a total of $52.5 million to Simply Self Storage. LifeStorage portfolio comprises six facilities totaling 3,854 storage units offering 441,221 rentable square feet. The properties are in Algonquin, Carpentersville, Chicago, Elgin, Markham and Matteson, Ill.

The newly built Sauk Trail Storage in South Chicago Heights consists of 61,800 square feet with 319 units and features complete drive-thru access. All sites will be re-branded Simply Self Storage. Info: 312.726.5800, [email protected]

Equibase Capital Group, a private-equity, real estate investment firm based in Chicago, acquired six Class A self-storage properties recently constructed in Florida, Illinois, Massachusetts, New York and Rhode Island. The properties were acquired through a joint venture with Extra Space Storage Inc.

The portfolio aggregates more than 5,000 units and 550,000 square feet of space, and continues the relationship between Equibase and Extra Space Storage that started in 1990. Terms of the transaction were not disclosed.

Extra Space Storage, headquartered in Salt Lake City, is a real estate investment trust that owns or operates 640 self-storage properties in 32 states. Equibase specializes in providing equity and subordinated debt capital to real estate operators and developers. Info: www.equibasecapital.com

Smartbox, a Va.-based portable self-storage company, is bringing its storage solutions to Baltimore, continuing an expansion in recent months that has included new franchises in Atlanta, New Orleans, Raleigh, N.C., and Jacksonville, Fla. Smartbox enables users to pack and load belongings at their convenience in containers that are 8 feet long, 7 feet tall and 5 feet wide. Info: www.smartboxusa.com

Florida-based Sentry Self Storage,

providers of management services to independent owners and investors, has been awarded management contracts for a four-property portfolio. The Champion Self Storage portfolio consists of two properties in Palm Coast, Palatka and Jacksonville, Fla., comprising 350,160 square feet in 2,608 units. Info: 214.446.6688, www.sentry-selfstorage.com

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