Sovran Self Storage Inc., a self-storage real estate investment trust (REIT), has acquired seven facilities totaling more than 575,00 square feet of rental space for a total purchase price of $98.7 million. The properties will be rebranded Uncle Bobs Self Storage and integrated into the companys operating platforms. The range of facility amenities includes climate control, free Wi-Fi, and records and wine storage.

The five separate sales transactions were funded by advances on Sovrans line of credit, proceeds from the sale of several properties, and the companys at-the-market program. Five of the properties were purchased during the fourth quarter of 2013 for a combined purchase price of $44.7 million.

Each property is in a market in which Sovran already has a presence, one each in Connecticut, Southeast Florida and Texas, and two in New Jersey. At the end of the fourth quarter, Sovran purchased two more facilities, also in Southeast Florida, for a combined purchase price of $54 million.

We are pleased to add these modern, top-tier properties to our portfolio, said Sovran CEO David Rogers. They fit well into our strategy of acquiring high-quality assets in core markets, and we look forward to strong growth from each of them.

In addition to the previously announced sale of a self-storage facility in Dayton, Ohio, Sovran sold three other facilities in the fourth quarter of 2013. The storestwo in Tallahassee, Fla., and one in Christiansburg, Va.were sold for $8.9 million. The company recognized a gain of about $2 million in the sales transactions.

Buffalo, N.Y.-based Sovran operates 480 self-storage facilities in 25 states. The company ranked No. 5 on the Inside Self-Storage 2013 Top-Operators List.

A positive contribution to your self-storage operation's bottom line can come from many sources, such as a revenue-management system, additional services and retail products, and collections, to name a few. But beyond these income streams, theres a crucial make-or-break moment when you submit a property financing request, as it will have huge bearing on your net cash flow. When that time comes, among managing daily activity, you must make your financing a top priority.

A complete, accurate, concise and compelling loan-request package can make the difference. Make the lender's decision easy. Make or break? The result is in your hands.

Starting 2014 With New Perspectives

As we kick off the new year, there are three fundamental reasons why now is a great time to consider seeking self-storage financing:

• More lenders have embraced self-storage as a preferred property type.
• Todays interest rates are still near historic lows.
• Most lenders are more eager to originate new business in 2014 than in the past several prior years.

Given the ever-changing financing environment, you may want to expand your horizons beyond your current lenders. Working with a mortgage broker to prepare and market a professionally prepared loan-request package allows you to maximize exposure, obtain competitive quotes and minimize your efforts in finding potential lending sources.

A well-constructed package presents five primary information categories. Let's examine each.

Loan-Request Overview

The overview is the packages foundation and paints a picture for the lender that entices him to read further and, ultimately, provide you with competitive financing. In the overview, youll want to define the desired type of loan and terms that form the basis for what you believe is a reasonable request. Be sure to include:

• Property overview
• Requested loan amount and desired terms
• Overview of ownership/management credentials
• Salient operating results that support the loan request
• Occupancy highlights and trends
• Summary of existing debt and purpose of seeking a new loan

Property Details and Location Attributes

In this section, your goal is to make the lender comfortable about the storage propertys attributes and location. Make the impression that it is competitively located with features that will attract and sustain new and existing customers. Photosespecially those taken on a sunny dayalso speak a thousand words. At a minimum, this section should include:

• Property address
• Gross and net square footage
• Year(s) built and renovated
• Total number of units (traditional, climate-controlled, parking, other)
• Construction attributes (masonry, metal, asphalt vs. concrete driveways, etc.)
• Security attributes (fencing, gate access, cameras, door alarms, etc.)
• Onsite management office and applicable apartment information
• Signage
• Zoning
• Amenities, unique attributes and competitive advantages
• Photos (property layout, office, location, visibility signage, etc.)

Dont be shy about bragging about your facility! If you are the local market leader, let prospective lenders know it. Paint a great picture so they can visualize the asset.

You also want to demonstrate your knowledge of your customer base and the propertys demand drivers. Go beyond providing basic demographic information. With modern self-storage software, you can plot where your customers are actually located. This will help impress lenders that you have a good handle on your business model.

In addition, describe the propertys immediate surrounding area, as well as local and regional characteristics. You may also want to address land use and the ability/probability for new competition to arise in your market. Describe potential barriers of entry for new competition that may result from zoning restrictions or local government processes/ordinances. With construction lending gaining momentum in 2014, this will be of increasing concern to lenders.

Ownership and Management Qualifications

Recovering from the recent credit crisis, lenders today place greater focus and emphasis on sponsorship than ever before. Even if you are seeking a non-recourse loan (which uses only the property as loan collateral), your financial strength will be closely scrutinized. Simply put, you need to prove you are a worthy customer.

You can do this through two primary information presentations: proving your financial wherewithal and creditworthiness, and describing your real estate operating experience and track record. Be sure to include:

• Property ownership structure and its principals. You may want to present an organizational chart if the ownership is complex.
• Financial strength of the managing and majority ownership. Subsequent to the loan-request submission, be prepared to provide financial statements, tax returns and global cash flows, and a schedule of real estate owned.

You will also want to stress your self-storage management success track record and ability to achieve positive operating results. Consider including recent efforts to improve your operation, such as revenue-management techniques, website improvements and operational software upgrades/changes. Demonstrate that you are on top of managing the property and fiscally responsible.

For obvious reasons, failure to disclose any credit issues up front can be cause for lender concern and the deal may not make it to the closing table. However, I have managed many requests in which borrowers disclosed past credit problems and their subsequent resolutions, and these concerns became a non-issue going forward with the loan-request process.

Property Operating Performance

The meat and potatoes of your loan request-package, this section demonstrates that the property has the historic and future operational ability to sustain the requested financing. This section should include:

• Year-end financial results for the prior two years
• Trailing 12 months income and expenses (presented monthly)
• Occupancy statistics for past 36 months
• Pro forma income and expense statements for next 12 months
• Current summary gross potential income report
• Current tax bill

You absolutely must present this information in an organized fashion. Remove non-cash items such as depreciation and either remove or explain non-recurring or non-business related expenses.

Ultimately, each lender will establish a net operating income amount that it will use to establish a loan amount. If you are acquiring a property, the pro forma becomes essential because the expense structure is likely to be modified, and the anticipated income may be different based on the owners proposed business plan.

Competitive Landscape

Your loan request should demonstrate that you are well-positioned among your self-storage peers. The competition in most markets is generally those facilities located within a 3- to 5-mile radius. The lender will want to see what the competition is charging for units sizes similar to those offered at your property. You will need to shop your competition to obtain this information. You may want to describe multi-tiered pricing, as many operators offer various price points for the same size units. Provide the lender with explanatory comments on price/quality variations and competitive locations.

Make or Break!

Having structured hundreds, maybe thousands of self-storage loan requests over more than 20 years, I can confidently proclaim that a well-organized, professionally prepared loan request will result in obtaining more favorable lender responses and, ultimately, more aggressive terms. Make the right impression at this point and the resulting financing can contribute to improved cash flow for years to come.

Neal Gussis is a principal at CCM Commercial Mortgage, a mortgage-banking firm that secures financing for self-storage owners nationwide. The company works with an extensive network of capital providers and has funded more than $1 billion in self-storage transactions. For more information, call 847.922.3750; e-mail [email protected]; visit www.ccmcommercialmortgage.com .

Joint-venture partners Federal Capital Partners (FCP) and Self Storage Zone recently opened Taylor Street Self Storage Zone in Washington, D.C., a 1,034-unit facility converted from the former Capital Area Food Bank. The property at 645 Taylor St. N.E. encompasses 78,600 square feet in three stories. Its in the Brookland submarket of Washington, D.C., one block from Catholic University and six blocks from the Brookland/CUA Metro station.

The climate-controlled units range in size from 5-by-5 to 10-by-30. Other features include interior loading and delivery acceptance during office hours, which are 6 a.m. to 10 p.m. daily. Tenants may also use the company van for free during move-in or can choose to rent a moving truck complete with a driver, a unique option in the Washington market, according to a company press release. 

We are pleased to provide a well-managed, state-of-the-art self-storage facility with a high-level of service and amenities to communities that have previously needed to travel outside the District, said Diane Tipton, Self Storage Zone Principal.

Diane Tipton and the Self Storage Zone team have proven to be excellent local partners, delivering this project on time and under budget into a market with robust demand. said Drew Odabashian, FCPs vice president for commercial acquisitions.

Self Storage Zone is a developer and operator of self-storage facilities in Florida and the Washington, D.C., metropolitan area. Since 1995, The company has developed, constructed, acquired and managed approximately 3.8 million gross square feet of space in 36 projects in Florida, Maryland, New Jersey, New York and Virginia. It is actively seeking new development opportunities in the Washington, D.C., metro region.

Based in Chevy Chase, Md., FCP is a privately held real estate investment company that has invested in or financed more than $3 billion in assets since its founding in 1999. The compan is seeking equity, preferred equity and mezzanine-debt investments in commercial and residential real estate throughout the mid-Atlantic region. It owns and manages in excess of $2.3 billion in assets. 

Easystore Self Storage Ltd., a U.K. operator with two locations in Wales, has invested more than £250,000 to expand its facility in Bridgend with exterior units. The project was necessary to keep up with customer demand, company officials said.

We have been absolutely overwhelmed and rather humbled by the reception our new units have received, said Brendan Connies-Laing, company director. Within the first two months, they are 80 percent occupied, and the feedback we have received has been hugely positive. We are already planning to build more.

Connies-Laing worked in the U.S. self-storage market during the 1990s where he learned the importance of access-control systems and providing a meaningful customer experience, the source reported. The drive-up units at Bridgend feature metered power supply, fire-protection systems, individual door alarms, WiFi and 24-hour access.

The ethos of the company is centered around ease of use for the customer, and the whole philosophy has developed from that premise, he said. With the economic recovery well and truly underway, this is a thrilling time to be in the position that we find ourselves. An increasingly buoyant housing market is resulting in an increase in domestic demand for self-storage. At the same time, small business activity is picking up, and it is wonderful to be able to offer genuine solutions to SMEs [small and medium-sized enterprises] that save them time and money.

Easystore was founded in 2002 and opened its first self-storage facility in Cardiff the following year. The Bridgend location opened in 2009.

Bloomington, Ind.-based Storage Express has acquired Community Storage in Indianapolis. This purchase marks the companys sixth Indianapolis-area location and is about five miles from its recently acquired Mann Road property, purchased in November.

The 37,000-square-foot facility on Lynhurst Drive is on the southwest side of the city, along I-70 and near the Indianapolis International Airport. Storage Express will upgrade the property with new security and access-control features, a 24-hour rental center, and other amenities common to the company's portfolio.

Storage Express owns and operates more than 80 self-storage properties across Indiana, Illinois, Kentucky, Tennessee and Ohio. The company has opened several locations over the past year and has plans for new construction in several markets in 2014.

In November, it acquired Store N Lock self-storage in Indianapolis. Earlier in the year, it purchased D-V Storage in Anderson, Ind.; Palm Storage in Richmond, Ind., and a three-property portfolio of properties in Sidney, Ohio, from Lock-It-Up Storage. The company is actively pursuing more acquisition and ground-up development opportunities.

StoreSmart Self-Storage, which operates more than 20 facilities in six states, has appointed Todd Allen as a partner in the company. Allen joined StoreSmart in 2009 as vice president of operations and has been instrumental in the companys growth, officials said in a press release.

We are excited about Todd becoming our partner, said Brad Sherman, managing principal. This is the well-deserved next step in his many years of excellent service to our companies.

StoreSmart recently acquired a facility in Fayetteville, N.C., that is believed to be the first crowdfunded property in the industry. The company worked with Realty Mogul, an online marketplace that allows accredited investors to pool money online and buy shares of pre-vetted investment properties, to raise $1 million.

The company currently operates self-storage facilities in Arkansas, Florida, Georgia, Illinois, North Carolina and South Carolina, and is seeking new investment opportunities throughout the United States. Its locations are managed by its affiliated property-management company, Reliant Real Estate Management LLC.

American Spectrum Realty Inc., which operates self-storage facilities under the 1st American Storage brand, obtained a new, working-capital loan of $6 million. Dunham & Associates Holdings Inc. will fund the loan to American Spectrum Dunham Properties LLC, a wholly owned subsidiary of American Spectrum Realty Inc. The first tranche, in the amount of $3 million, was advanced on Jan. 3. A second $3 million advance will be made within 90 days.

These funds allow us to invest in managing the assets of a recently acquired portfolio of real property, acquire additional properties and portfolios to manage as well as invest in improving properties for investor/partners in our legacy portfolio, said William J. Carden, CEO of American Spectrum.

The five-year, interest-only loan bears simple interest at 8 percent per annum during the first year and 12 percent per annum for the remainder of the term. All accrued interest and unpaid principal outstanding is due in full in five years.

American Spectrum Realty issued Dunham & Associates five-year warrants exercisable for 600,000 shares of its common stock at a price per share of $2 for arranging the loan.

Headquartered in Houston, American Spectrum Realty  is a real estate investment, management and leasing company that owns self-storage, office, retail and multi-family interests across the United States through an operating partnership. The company has been publicly traded since 2001.

Safeguard Self Storage purchased a plot of land in the West Rogers Park neighborhood of Chicago last month and is expected to close on another city parcel later this month as part of a targeted expansion effort. New facilities will be constructed at both sites and are scheduled to open in 2015. Safeguard currently operates 10 locations in the Chicago area.

Once open, the West Rogers Park facility at 6014 California St. will mark the companys 67th location nationwide and be comprised of 51,775 square feet in 717 storage units. Amenities will include heated and air-conditioned spaces, a drive-up loading area, computerized access and video cameras. The second property is on North Sheridan Road and is expected to house a larger facility, company officials said in a press release. Both properties are near downtown.

"The West Rogers Park store, like all of our Chicago facilities, will be designed to provide an exceptional customer experience, said Jim Goonan, senior vice president of development. This new facility will complement our product offering in Illinois and demonstrates our commitment to, and confidence in, this burgeoning market. The design of the façade of this store has been modified and upgraded to fit in with the neighborhood the company is joining.

Headquartered in Atlanta, Safeguard Self Storage was founded in 1989 and currently operates 63 facilities in Florida, Illinois, Louisiana, New Jersey, New York and Pennsylvania. The company is owned and operated by Morgan Stanleys Prime Property Fund.

SpareFoot, an online marketplace for the self-storage industry, is holding a job fair on Jan. 14 to hire 31 employees who will support the expansion of its call center. The invitation-only open house  is from 5 to 7 p.m. at SpareFoots headquarters, 720 Brazos St., in Austin, Texas.

Call-center representatives, dubbed Amazing Customer Experience (ACE) Members, are the companys first point of contact, according to the SpareFoot website. They assist self-storage customers with all needs including determining what size storage space they need, booking and managing storage reservations, and assisting with truck rentals. ACE Members also handle Web chat and e-mail inquiries.

SpareFoot employees are offered paid insurance, free daily lunches prepared by a chef, stock options, snacks and beverages, a casual work environment, and vacation time. Qualified applicants should have the following:

• Verbal and written communications skills
• Internet skills including the ability to navigate multiple tabs and sites
• The ability to type at least 25 words per minute
• Self-motivation
• Schedule flexibility

To be invited to the open house, potential candidates must send a cover letter and resume by Jan. 11 to Rachel Morse at [email protected]. The subject line should read: ACE Team Open House.

Founded in 2008, SpareFoot.com helps consumers find and reserve self-storage units, with comparison shopping tools that show real-time availability and exclusive deals. With a network of more than 6,500 storage facilities ranging from mom-and-pop operations to real estate investment trusts, the company reaches prospective storage renters though partnerships with brands including SelfStorage.com, Apartments.com and Penske Truck Rental.

Virtus Real Estate Capital, a real estate private equity firm, has acquired the 97,800-square-foot Outback Storage facility in Horn Lake, Miss. The transaction is the company's ninth self-storage acquisition in the greater Memphis area.

Built in 2005, Outback Storage contains 636 units. The site is just west of the heavily traveled intersection of Highway 51 and Goodman Road, according to a press release. Horn Lake is situated in one of the fastest growing areas in the mid-south region, which includes Arkansas, Mississippi and Tennessee.

"Outback Storage is a welcome addition to our portfolio of eight other Memphis area self-storage properties. With local population growth expected to average two to three percent for the next five years and significant retail and residential development along the Goodman Road corridor, this site was a prime target for Virtus to add to our existing portfolio of Memphis stores," said Scott Humphreys, acquisitions manager.

Extra Space Management, the facility-management arm of Extra Space Storage Inc., has been hired to run the onsite operation. Outback Storage is the company's 26th management contract in the Memphis area.

Since its inception in 2003, Virtus has acquired more than $2 billion in commercial real estate assets, including more than $100 million in self-storage. The companys strategy is to acquire commercial niche properties that serve the high-growth segments of the U.S. population, including medical offices, self-storage, senior living and student housing. Virtus is actively seeking opportunities to acquire self-storage properties in its target markets.

Headquartered in Salt Lake City, Extra Space is a fully integrated, self-administered and self-managed real estate investment trust. The company owns or operates 1,007 self-storage properties in 35 states; Washington, D.C.; and Puerto Rico. The companys properties comprise approximately 667,000 units and 74 million square feet of rentable space.