Self-storage finance expert Jim Davies has joined Talonvest Capital Inc. as a principal. He joins the company from his role as managing director at Belgravia Capital, a full service real estate investment banking firm headquartered in Orange County, Calif.

With nearly 30 years of commercial and self-storage lending experience, Davies previously served as senior vice president and shareholder of Buchanan Street Partners, and was a co-founder and principal of Buchanan Storage Capital. In 2009, he launched Davies Ingersoll Capital Partners, now Safe Harbour Equity Inc., with self-storage investment broker Peter Ingersoll.

Davies also serves on the board of directors of the California Self Storage Association.

Based in Costa Mesa, Calif., Talonvest provides third-party capital placement, debt and equity for commercial real estate nationwide. It engages in principal investment activities in the $10 million and under range including making loans, buying notes and buying assets. The company recently launched a non-recourse loan program for self-storage owners. Its other principals are Eric Snyder and Thomas Sherlock.

Police have arrested and preliminarily charged two men in Johnson County, Ind., with breaking into a self-storage facility and stealing property from at least six units.

James B. Sears, 38, and Thomas M. Sears, 35, both of Indianapolis, are being held on an $8,000 bond. The two men face burglary and other charges.

When the owner of Greens Storage arrived at the facility around 5:30 a.m. Thursday he noticed the chain and padlock on the gate were not his, according to police reports. The self-storage owner used bold cutters to enter the facility and spotted a truck with a trailer near a storage unit.

Upon discovery, the burglars fled the scene. The self-storage owner called 911 to report the break-in. The truck was then stopped by a police officer on the highway and the driver was arrested. A second man was later found and arrested. Police discovered property believed to be from the storage units in the trucks trailer.

Oklahoma self-storage property sales lagged in 2009 and 2010 as tight financing thwarted investors and steadily rising occupancy and revenue levels discouraged owners from selling. But better credit forecasts for the next two years could lead to more sales.

Darren Currin, real estate columnist for JournalRecord.com, writes that despite the state's relative resillience against the recession, self-storage sales still dropped off in Oklahoma. In the state's two largest metropolitan areas, Oklahoma City and Tulsa, only four combined sales occurred in 2010 and three in 2009. Rural areas didn't fare much better.

The local trend has countered what some expected at the recession's outset, that consumers would scale back their lives and need inexpensive space to store their belongings, creating industry expansion. Indeed, many Oklahoma owners and operators have reported few vacancies, showing a steady if not increasing consumer demand. But investors struggled to secure financing, even for well-performing properties.

Currin expects more sales this year and next as credit becomes more available and investors are attracted to the stability of self-storage properties.

The city council in Urbandale, Iowa, is just one vote away from changing the citys self-storage fire-sprinkler code.

The Urbandale City Council has approved two of three readings to change the citys fire code to allow self-storage facilities with less than 12,000 square feet of space to be built without fire sprinklers. Twelve thousand square feet is the recommendation of the International Fire Code.

Brad Vander Linden and business partner Eric Vander Linden requested the amendment so they wouldnt be required to install an automatic sprinkler system at the proposed self-storage site.

Despite opposition from the citys fire chief, the council gave the initial approval earlier this month to change the fire code and allow Hickmans Self-Storage to be built without fire sprinklers.

In November, an Urbandale Board of Appeals denied the developers request, recommending the code remain at 6,000 square feet. The city code was changed in 2007, requiring sprinkler systems for self-storage buildings from 6,000 square feet or greater. Any facilities built before 2007 are not required to add a sprinkler system.

The council received a petition earlier this week signed by 61 residents and five businesses near the property against the change. The petition asked Urbandale Mayor Bob Andeweg to veto the councils decision if the third reading is passed at the next council meeting on Feb. 8.

A self-storage manager from California will appear on an upcoming episode of the ABC TV show Wipeout.

Don Kemper, a manager at Storage Solutions in Placentia, Calif., took on the worlds largest extreme obstacle course for a chance at a $50,000 grand prize. In each episode 24 contestants traverse an obstacle course comprised of whacky challenges such as dodging hockey pucks, jumping onto moving platforms and bouncing across giant balls. The winner is named the Wipeout Champion and wins the grand prize.

Kemper beat about 75,000 other applicants to appear on the show, which will air Feb. 24. Following an application process, several interviews and many waivers, Kemper and his step-daughter, Tatiana Kelly, secured their spot to challenge 12 other pairs of contestants in a pairs episode.

Kempers biggest challenge was getting hesitant Storage Solutions management to agree. We definitely wanted Don to do the show. We knew he would be great at it because hes

smart and athletic, said Jae Ho, operations manager. But our concern was he would get hurt, and he is such a great asset to lose for any amount of time.

After taping the episode in November, Kemper did return to work with his arm in a sling. While hes unable to divulge how he did on the show, he said, The overall experience of getting to run the obstacle course, including jumping over the infamous big balls and other unreal, unbelievable and grueling challenges, was exhausting and withering.

Storage Solutions operates 21 convenient self-storage facilities in Southern California. The company is the self-storage division of Union Development Co., a real estate developer with more than 1.7 million square feet of property in its portfolio, including retail, industrial, self-storage, and R.V. and boat storage.

What product in the self-storage industry impacts more people than tenant insurance? It touches the lives of tenants, facility owners and managers, bankers, insurance agents, and investors/partners.

When a customer purchases tenant-insurance coverage, hes protecting his property and obtaining peace of mind, often during stressful circumstances. Owner/operators can benefit in a variety of ways: They can increase their revenue stream, improve their capitalization (cap) rate, retain and recruit better managers, and have fewer liability issues to worry about. It certainly helps to mitigate bad press during the incident of a loss when you can say coverage is offered and available to all tenants.

Bankers are going to be happier with improved cap rates, reduced liability and better bottom-line performance of the properties on which they hold mortgages. Property and casualty (P&C) insurance providers will look favorably on a strong tenant-insurance program because it helps to manage risk at a self-storage facility. It may even lower an owners P&C rates at renewal.

For an investor/partner in a medium or large group, the administrative fees generated from a tenant-insurance program could garner enough revenue to buyor be used as leverage to buyadditional properties. There may also be tax advantages, depending on the type of program selected.

Finally, the person most affected by a tenant-insurance program is the self-storage manager. As the face of the facility on the front line, the manager is involved from the beginning of the sale through the lifetime of the rental. He has an opportunity to help customers by offering tenant insurance during the rental process. When coverage is purchased and the customer walks away with peace of mind, its a win-win situation.

Should a claim need to be filed, the manager can feel good knowing he helped to protect his customer. The tenant is happy with the manager for educating him, helping him to choose a coverage option, and ultimately getting him paid for his loss. Conversely, if there is no tenant-insurance program available or the manager fails to offer or educate on insurance, this same scenario could become very ugly, with no winners and plenty of headaches for everyone. Simply put, a tenant-insurance program is a valuable enhancement to your customer-service package.

In addition, when the manager is incented by receiving all or part of the administrative fee, participation in the program skyrockets! The standard admin fees for most current programs could be a nice supplement to the managers compensation package, and it gives him the power to improve his compensation on a monthly and yearly basis. Incenting managers also works well for the owner/operators, especially the absentee owner, because his manager is vested and involved in the program with every lease. The owner now has a rigid barrier to competition and a viable edge for attracting and retaining the best staff.

A Creative Approach

Tenant-insurance programs have other uses as well. Jim Chiswell, president of Chiswell & Associates LLC, suggests, Instead of all these crazy promotions such a $1 move in or free month of rent with a long-term lease, you could include the tenant-insurance coverage for free for the length of the rental. Compared to mandatory programs where you have to buy it or use a hard-sell approach, you can provide peace of mind for your tenants for their personal possessions and remove any doubt about whether or not they are covered. It then becomes tangible later and really promotes goodwill between your facility and your customer.

Chiswell says that if an owner required all customers to take tenant insurance or included it in the monthly rent instead of giving away the store with discounts, he may be able to get a reduced insurance premium from his commercial insurance carrier because it is being protected from small tenant claims by the tenant-insurance policy. If the owner adjusted rents to include the net premium amount, it could provide a competitive advantage as well. Instead of the long, mostly negative dialogue with new customers about their lack of coverage and the fact that they are not insured by the facility, they owner could simply say that when you store with the facility, you automatically have $2,500 or $5,000 worth of coverage.

Self-storage operators are faced with numerous choices in todays tenant-insurance marketplace, ranging from simple countertop brochures to warranty plans to exotic off-shore captives. Despite all the options, however, more than 50 percent of facilities still use the original brochure approach, created 35 years ago by self-storage pioneer T.L. Brundage and his insurance agent. Though it seems like an easy and reliable tenant-insurance offering, its time-consuming for the tenant (fill it out, mail it in, wait for the insurance), and it only has 1.8 percent participation.

While those countertop brochures sit and gather dust, the other 50 percent of self-storage facilities nationwide are enjoying benefits from their tenant-insurance programs: increased revenue, improved cap rates, lower P&C rates, fewer liability issues, happier/better managers, and enhanced customer serviceall valuable byproducts of tenant-insurance coverage.

Harry Sleighel is the chairman of Storage Property Protection Inc., which provides a tenant-property-protection program for the self-storage industry, and co-founder of Michaels Wilder, an agency that provides human resources solutions and marketing services. For more information about SPP, call 877.575.7774 or visit www.storagepropertyprotection.com .

Hannay Investment Properties recently took over the operation of three self-storage properties in Arizona, one as the court-appointed receiver and two for a lender.

In December, Maricopa County Superior Court appointed Hannay Investment Properties as the Receiver for Arizona Self Storage in Glendale. The lender, CW Capital Asset Management, requested the court appoint Hannay as the receiver for the property, which secured a loan for $3.5 million.

At the lenders request, Hannay also took over the management and operation of two self storage facilities, one in Laveen and one in Casa Grande, on behalf of Wells Fargo Bank in January. Hannays self-storage operations are headed up by Reid Bracken, who has extensive experience in the operation of self-storage properties throughout the southwestern United States.

Phoenix-based Hannay Investment Properties is a 50-year-old privately-owned commercial real estate services and investment firm. The company currently has receivership and property management operations in Arizona, California and Nevada. 

Police were called to Devon Self Storage at 18830 Woodfield Rd. in Gaithersburg, Md., on Monday evening because of several suspicious-looking men spotted by a person driving by. The men were reportedly wearing protective clothing and moving unmarked barrels from a box truck into a unit.

Police visited the scene and called the fire department. It was discovered that the men in question are subcontractors for a government contractor, which manufactures a product with two by-products: an oil and sodium hydroxide, better known as caustic soda or lye, which is sometimes used by hotels and restaurants for cleaning purposes. The storage unit contained more than two dozen barrels of these substances.

Authorities said the substances are not a hazard as currently stored, but the Maryland Department of the Environment is investigating the lack of proper labels and placards on the barrels and the truck used to transport them.

One of the keys to success for any charitable organization is finding a niche to fillthen the financing to make a difference. Once such charity has reached out to the self-storage industry to help wounded active-duty warriors in transition.

Wounded Warrior Outdoors Inc. (WWO), a non-profit organization that provides therapeutic outdoor excursions to wounded U.S. and Canadian soldiers, will host a special one-hour event at the Inside Self-Storage World Expo in Las Vegas on March 14 at 2 p.m. WWO founder Ron Raboud will talk about WWOs mission and how operators can support the organization. Hell also share stories of how WWO has positively impacted the lives of wounded vets in transition. Raboud is the CEO of The Rabco Corp., which provides pre-engineered metal buildings for the self-storage industry.

WWO recently launched a fundraising campaign, One for the Troops, which encourages self-storage operators nationwide to donate the rental proceeds from just one of their units to WWO. Operators can commit to a single month or make it an ongoing donation and can choose any size uniteven their smallest donation is a big help.

This ISS Expo special event is included with the standard Education Package, which also includes access to four comprehensive education tracks, two days in the exhibit hall and other networking events.

Attendees can also take advantage of discount room rates through Feb. 15 by calling 1.800.HARRAHS and mentioning the expo.

Details about the industrys largest conference and tradeshow can be found at www.insideselfstorageworldexpo.com. Registration can be completed online or by calling 800.230.2311.

 

Broker affiliates of the Argus Self Storage Sales Network recently brokered the sale of self-storage facilities in Colorado, Kansas and Missouri.

Joan Lucas of Joan Lucas Real Estate Services and Argus President Ben Vestal represented the seller in the sale of Budget Store & Lock in Commerce City, Colo. The 61,200-square-foot property sold on Dec. 6 for $1.9 million. Lucas and Vestal also sold Downtown Denver Storage in Denver on Dec. 15 to a local investor.

Larry Goldman of RE/MAX Best Associates represented the seller of Cedar Notch Storage in Branson West, Mo.  The 29,840-square-foot facility was bank owned at the time of the sale. Goldman also represented the seller of Flex Storage Systems in Topeka, Kan., a 56,157-square-foot facility boasting a unique, modern design. The facility was featured in the May 2005 issue of Inside Self-Storage magazine, in an article titled Storage as Art. The new owners, based in Wichita Falls, Texas, plan to reposition the asset.

Based in Denver, Argus has 36 broker affiliates and covers nearly 40 self-storage markets. The company was formed in 1994.