Home Star Storage LLC, which operates four self-storage facilities in Florida, is converting a former office and warehouse to self-storage in Mableton, Ga. It’ll be the company’s first location in the state, according to a press release.

The 16-acre property at 381 Veterans Memorial Hwy S.W. will contain 840 climate-controlled storage units. It’s expected to be complete this spring.

“I’m very excited to add another climate-controlled storage facility to our national portfolio, and we are very grateful to have partnered with Scott Meyers, CEO of Self Storage Investing, in this important endeavor,” said CEO Lawrence Murphy.

Home Star operates facilities in Clearwater, Summerfield, Tavares, and Woodlake, Fla.

 

Strategic Storage Trust IV Inc. (SST IV), a public non-traded real estate investment trust (REIT) sponsored by SmartStop Asset Management LLC, has acquired a 2-acre vacant lot in Oshawa, Ontario, Canada, on which it plans to build a self-storage facility. The purchase was made through a joint venture with SmartCentres Real Estate Investment Trust, according to a press release.

Plans for the property at 642 Champlain Ave. include 119,000 gross square feet of storage space in 900 units. The project is expected to break ground before the end of the year.

“This tract of land is ideally located, facing [Ontario] Highway 401, one of the busiest highways in this region of Canada,” said Wayne Johnson, chief investment officer for SST IV. “We are pleased to partner with SmartCentres, one of Canada’s largest REITs, on this acquisition that will further expand Strategic Storage Trust IV’s portfolio in Canada and is expected to generate strong value for investors.”

The joint venture also broke ground this summer on a project in East York, a borough of Toronto, where the partnership is building 100,000 square feet of storage space in 990 units. The facility is expected to open in late 2019.

Based in Maryland, SST IV owns seven self-storage properties comprising about 481,800 net rentable square feet. It intends to invest in a portfolio of self-storage properties in Canada and the United States.

SmartStop is the asset manager for 118 facilities in Canada and the U.S. Its portfolio comprises approximately 8.6 million rentable square feet.

SmartCentres develops urban, mixed-use residential and industrial developments, including the master-planned community SmartCentres Place at the Vaughan Metropolitan Centre in Ontario. It owns and manages 34 million square feet of retail space.

Purchasing a self-storage facility can be more difficult than you’d think in this over-heated market, especially for first-time buyers. There are more investors than ever competing for fewer available properties. As a novice, you enter that competition with several disadvantages. To succeed, you should know what those shortcomings are and how to counteract them. Even under current conditions, opportunities can be found if you know how to identify them and you properly structure your offer.

Search Criteria

The first step in finding the right self-storage facility to purchase is to define your search criteria. Answer the following:

• In what city, state or region will you look?
• What’s your price range? What can you buy for that price in the target market?
• Will you manage the site yourself or hire a management company?
• How often will you visit the facility?

After identifying where the perfect property will be, consider the best offer you’re willing to make, keeping your competition in mind. Be prepared to bid at a fair price. Offer the largest possible earnest-money deposit and the shortest possible due-diligence period. You can only do these things with confidence if you’ve researched and understand your chosen market.

Investment Type

After learning all about your target market, it’s time to consider which kind of investment suits your capabilities. Self-storage buyers usually consider stabilized properties or upside properties.

Prices and capitalization (cap) rates for stabilized properties in any given market should be fairly consistent. This means that when a property is evaluated by several well-informed buyers, its cap rate, sales price and value will fall within a narrow range. This isn’t the case with upside properties, where prices and cap rates vary widely and are much harder to establish. Upside is often subjective based on a buyer’s perceptions, beliefs and assumptions.

Stabilized properties generally offer higher current return with lower risk. They present the opportunity to slowly and modestly increase rents over time. Upside properties usually offer lower current return, sometimes much lower or even negative. However, they provide the chance to significantly increase return by improving the facility. These improvements can be physical, operational or a combination of both.

The following are common indicators of possible upside in a property (bear in mind they aren’t proof positive but a sign that further investigation is warranted):

• Higher vacancy than nearby competitors, especially if rents are equal to or lower than the competition
• Inexplicably high operating expenses
• Room to grow, i.e., excess land or many open parking spaces

Upside properties are in high demand by entrepreneurial buyers, but too often, stabilized properties are mistaken as having upside, causing buyers to substantially overpay. To avoid this mistake, it’s important to know the market, including the number of existing and planned self-storage facilities in the area, the major players, occupancy rates, rents, and expense ratios. You must know specific neighborhoods or sub-markets, their current population and growth projections, and other demographic information and trends.

There’s a lot of information to discover and absorb. It would be best to shortcut the process by working with a local real estate broker who specializes in self-storage. He’ll already have this information and should be willing to share it with you. He’ll know what’s for sale in the market or will be soon.

Remember, you’ll face competition from many other investors seeking properties in the best markets. Show your broker you understand local market values and are prepared to be competitive and act quickly when it comes to making an offer.

Financing

By this time, you should’ve contacted several lenders who understand self-storage and have a desire to loan on this asset class. Understand their loan programs in terms of:

• Minimum and maximum loan amounts
• Required loan-to-value ratios
• Rates and repayment terms
• How much time the lender will need before it can provide you with a “terms sheet” for your deal

Understanding available financing is critically important for a first-time buyer because you’ll likely compete against all-cash buyers whose offers don’t include a finance contingency. From the seller’s perspective, dealing with a financed buyer means additional time for the earnest deposit to become non-refundable. More important, it adds the unnecessary risk that the deal won’t close. If you understand the financing sources and options, you may be comfortable accepting the risk yourself rather than asking the seller to accept it.

Due Diligence

Once you make an offer on a property, you and the seller will agree on a length of time for you to conduct due diligence, which is when you get to the inspect the property and its financials. The onsite inspection may involve soil tests, an environmental study and an engineering report for necessary improvements such as roof, utilities and HVAC equipment. You may also need to review existing site surveys or complete a new one. This can take up to three weeks, so an early start is essential.

Financial and other records to inspect include utility bills, tenant leases and correspondence, profit-and-loss (P&L) statements, bank statements, and cancelled checks. You want to confirm that the rental income shown on the P&Ls was deposited to the bank and there are no unreported expenses. Ask the seller to certify the accuracy and completeness of the material he provides. This is important because your lender will require the same certification from you.

Competition for the best properties among would-be self-storage buyers can be fierce, and first-time investors enter the field with many strikes against them. Follow this advice to mitigate those disadvantages on your path to ownership.

Bill Alter is a self-storage specialist with Rein & Grossoehme Commercial Real Estate in Arizona. He has specialized in storage since 1986, and has been involved in the sale of more than 160 storage facilities totaling more than 9 million square feet and a value of more than $400 million. He can be reached at 602.315.0771; [email protected]; visit www.rcre.com/author/billa. 

Whether you’re thinking about selling your self-storage property, looking to refinance or simply want to be better informed about your market, this report gives you insight to the revenue and operating costs of facilities similar to yours. The Self-Storage Custom Expense Report, prepared on demand by Colliers International Valuation and Advisory Services LLC, provides income and expense comparables based on a specific U.S. address provided by the customer. It offers a comparison against national data as well as metrics from real storage facilities that are as close as possible in proximity and type to your specified property.

Operating expenses are broken into nine categories including advertising, general and administrative, repairs and maintenance, offsite and onsite management, property insurance, real estate taxes, utilities, and reserves. The data includes a breakdown of how these costs are categorized, the impact of facility size and ownership type on operation, and income and expense details from six facilities hand-selected by Colliers to be the most comparable to your subject site.

With this report, owners of all self-storage property types can receive comparable facility data without having to rely on industry averages that are heavily impacted by national operation styles and may not factor in the unique aspects of your location. Visit the ISS Store for full product details.

Police are investigating the death of a woman whose body was found on Saturday inside a unit at Rochester Self Storage in Rochester, N.H. The woman has been identified as Jessica Purslow, 45. Her death has been classified as “suspicious” pending an autopsy that was scheduled for yesterday, according to Geoffrey Ward, assistant attorney general.

Police responded to a call about an open storage unit at 110 S. Main St. around midnight, the source reported. Investigators are trying to determine Purslow’s activities in the days before her death. Anyone with information is asked to call Rochester Police Detective Pat Emerson at 603.330.7128.

Purslow leaves behind two daughters and a son, according to Safford West II, who was once engaged to and shares a 6-year-old son with one of Purslow’s daughters. West told authorities he hasn’t seen the victim much in the past year, but believed she was homeless and may have used the storage unit for shelter. “I think she parked there from time to time so that way she had a safe spot if she did have to sleep in her car,” said West, who lived with the daughter until a year ago.

Police visited West’s home early Sunday looking for the daughter, but didn’t say why. “The cops wouldn’t tell us what it was about, and about 20 minutes later I got a phone call from Jessica’s mother,” West said. “She was freaking out, crying. She told me that Jessica is dead.”

West said Purslow was really nice. “She was quirky, and she had her moments, just like anybody would,” he said. “She loved her kids. She always tried to get everyone together.”

Source:
Union Leader, Woman's Body Found in Rochester Storage Unit

Prime Development Group LLC (PDG) has installed solar panels at College Point Storage, a self-storage facility it owns in Lacey, Wash. The 120-kilowatt system comprises a series of 360-watt, 72-cell photovoltaic panels, which is expected to offset the property’s energy use by 81 percent. The 334 panels were installed on the facility’s main building, which comprises 90,000 square feet, according to a blog post by West Coast Self-Storage Group (WCSSG), which manages the property.

“Whenever we can, we try to be as sustainable and environmentally conscious as we can with our projects,” said Jeff Powell, managing member of College Point. “With College Point, we had a large building with ample roof space, which made it very conducive to installing solar panels.”

The installation will also create a thermal break, protecting the underlying roof and extending its life, company officials said. The solar panels were made by Itek Energy in Bellingham, Wash., and installed by Seattle-based A&R Solar.

Based in Tumwater, Wash., PDG specializes in development airplane hangars, apartments and self-storage.

WCSSG is an acquisition, development and property-management company headquartered in Everett, Wash. Its portfolio of managed and owned properties includes 39 sites in Washington, nine in Oregon and seven in California.

Source:
West Coast Self-Storage, Is Solar Energy Good for Business? College Point Storage Says Yes

Entrepreneurs Steve Bartone and Jarrod Dixon are developing a 100-unit self-storage facility on 2.5 acres in Ashtabula, Ohio. The Storage Doctors at 3203 Fargo Extension will consist of three structures comprising 9,400 square feet. About 30 units are ready to rent, according to the source.

The facility features beige buildings with lime-green metal doors as well as screen doors. Once complete, it’ll include perimeter fencing and security cameras.

The site, which once housed a truck-bed restoration business, is at the northernmost point of town. It’s near Route 11 and a Lowe’s home-improvement store.

Bartone and Dixon both own local businesses and see the self-storage venture as a way to continue to invest in the community. Bartone owns a Car Nation car dealership. He chooses to invest in Ashtabula because he loves it there, he told the source. Dixon owns Copyworld, a local printing business, and is a realtor at Harbor Realty.

“I’ve been a lot of places, and it’s just as beautiful [here], especially in the summer,” Barton told the source. “I wish more people would take pride in the area and move back home.”

Source:
Star Beacon, Entrepreneurs Building a Self-Storage Facility

Update 10/8/18 – BlackMountain and New Rochelle Birch Development have been granted an estimated $2.5 million in tax relief for the self-storage project slated for 2 Birch St. The developer intends to demolish the former Rotanelli plant and replace it with a five-story structure. The $25 million project will comprise 152,000 square feet in 1,182 units. Construction is expected to begin this year and take about 14 months to complete, according to the source.

In addition to revitalizing the Rotanelli property, BlackMountain is expected to donate a large vacant lot near the site, which the city intends to convert into parking for a proposed maintenance facility.

The New Rochelle Industrial Development Agency (IDA) authorized a $703,500 sales-tax exemption, a $175,000 mortgage-tax exemption, and 10-year payment in lieu of taxes (PILOT) agreement. “Without the use of such benefits, the development would likely not proceed,” consultant Kevin F. Gremse of the National Development Council told the IDA in a memorandum.

The property is currently taxed at $114,434 annually, but the full tax rate as a developed site over 10 years would be more than $3.5 million. Under the 10-year PILOT agreement, BlackMountain will pay nearly $1.9 million and receive a tax abatement of more than $1.6 million, the source reported.

Once the abatement concludes, the property-tax rate is expected to increase by more than three times, according to Gremse’s analysis. By the 15th year, BlackMountain projects cash flow of $546,759 on estimated revenue of more than $3,2 million, according to the source.

The development will create 185 construction jobs, followed by two full-time and two part-time positions once the self-storage facility opens.

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5/29/18 – BlackMountain Partners LLC, a self-storage development and investment firm specializing in conversions, received site-plan approval last month to convert an existing building to self-storage in New Rochelle, N.Y. The company intends to transform a former frozen-food manufacturing plant into a five-story facility comprising 1,182 units. The property at 2 Birch St. will include one level underground, according to the source.

The project will also include the planting of pear trees along Birch Street for beautification. Soft lighting will be used to lessen the impact on nearby houses. New Rochelle will receive a portion of the parcel to use as a parking lot for a proposed maintenance facility on Nardozzi Place. Extra Space Storage Inc., a self-storage real estate investment trust and third-party management firm, will manage the facility.

BlackMountain affiliate New Rochelle Birch Development LLC acquired the former Rotanelli Foods and Specialty Brands facility last fall for $3.35 million. The seller, Parsonage House LLC, has sued BlackMountain for “goods and merchandise” valued at $750,000. The summons didn’t include details for why the suit was filed, the source reported.

Kanika Dewan, a manager with Parsonage, is negotiating with BlackMountain on removing “several tons” of architectural tiles and other material, she told the source.

BlackMountain doesn’t expect the lawsuit to delay the project, said Avi Schwartz, the company’s director of acquisitions.

Based in Albany, N.Y, BlackMountain specializes in adaptive re-use and historic preservation. It’s self-storage conversion projects are designed to preserve the character of original buildings and the aesthetics of the neighborhoods in which they’re located. The firm partners with national self-storage management companies to oversee operation of its properties upon Certificate of Occupancy, according to the company website.

Source:
Westfair Online, New Rochelle IDA Grants $2.5M Tax Benefits to Self-Storage Firm
Westfair Online, Lawsuit Not Expected to Slow Down New Rochelle Self-Storage Project
BlackMountain Partners: Website

Shurgard Self Storage Europe SARL, the European affiliate of U.S.-based real estate investment trust (REIT) Public Storage Inc., has opened a new facility in Berlin, its third in the German capital. The 1,200-unit property is off Gradestrasse in the Neukölln borough. It offers space from 1 to 27 square meters, according to a press release.

“Berlin has become a magnet for families, students as well as businesses, but working or living in this densely populated city means space can be hard to come by,” company officials said.

Shurgard is actively expanding its presence in Berlin as well as London and Paris. The company has launched a private placement of shares on Euronext Brussels that is expected to raise up to €575 million to help fuel acquisitions and development. It’s also considering a placement in Luxembourg.

Shurgard opened its first German self-storage property in 2003 and currently operates 17 locations nationwide.

Based in Glendale, Calif., Public Storage has interests in 2,615 self-storage facilities in 39 states, with approximately 171 million net rentable square feet. Operating under the Shurgard brand name, the company also has 229 facilities in seven European countries, with approximately 12 million net rentable square feet.

Valley Storage Co., which operates 28 self-storage facilities in six eastern states, has purchased the five-property L&H/AAAA portfolio in West Virginia. The acquisition adds 269,000 square feet of rental space to the company’s portfolio, according to a press release.

The purchase includes three sites in Martinsburg, at 2054 Williamsport Pike and 78 Delia Way as well as an annex property at 2848 Winchester Ave. It also includes 6610 Winchester Ave. in Inwood and 1744 Shepherd Grade Road in Shepherdstown. The new Williamsport location will be operated from Valley’s existing facility at 2006 Williamsport Pike. All will be rebranded as Valley Storage and managed by Storage Asset Management Inc., a York, Pa., property-management and consulting company.

“We are looking forward to increasing our presence in the Martinsburg market, and to continue bringing our high standard of customer service to residents in West Virginia,” said Todd Snook, who owns Valley with his wife, Tina.

Based in Hagerstown, Md., Valley opened its first self-storage location in Williamsport, Md., in 1986. It currently owns more than 1.5 million square feet of storage space in Maryland, Ohio, North Carolina, Pennsylvania, Virginia and West Virginia.