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Articles from 2006 In November

Extra Space and Zippi Networks Test Consignment Kiosks

Article-Extra Space and Zippi Networks Test Consignment Kiosks

Extra Space Storage Inc., one of the country's largest self-storage operators, and Zippi Networks Inc., an eBay service provider, are launching a test program to deploy self-service consignment kiosks in 10 of the storage company's California locations. The kiosks will allow Zippi to set up "drop off stations" where consumers can bring merchandise for preparation and sale on eBay. Following a successful pilot period, the companies will decide how to expand the program nationwide.

"This program will enable our self-storage facilities to gain exposure to a new audience of potential customers," said Karl Haas, Extra Space vice president and COO.

Zippi's strategy for encouraging eBay sellerswho are currently outnumbered by buyers 10 to 1includes several branch locations, an affiliate sales network, product drop-off stations and a franchise opportunity. According to Zippi CEO Robert Rositano Jr., the company's goal is a resurgence of the eBay seller community.

Zippi is headquartered in Silicon Valley, Calif. For more information, call 408.884.5717; visit www.zippi.com.

Headquartered in Salt Lake City, Extra Space is a fully integrated, self-administered and self-managed real estate investment trust that owns or operates 636 self-storage properties in 32 states including Washington, D.C. The company's properties comprise more than 425,000 units and 47 million square feet. For more information, visit www.extraspace.com.

ISS Blog

Crystal ball for construction professionals?

Article-Crystal ball for construction professionals?

I think most business professionals, particularly investors, would love to have a crystal ball in which to catch glimpses of their financial future. Self-storage developers take their chances with location, competition, zoning boards and the like. Of course, they hope to remove as much uncertainty as possible by conducting feasibility studies and due diligence before building or buying. But there are always seeds of doubt.


Not long ago, this business took a hit in the form of a steel crisis. The cost of materials went through the roof (no pun intended), and builders were forced to makes choices about whether to pass these increases on to customers. [To learn more about the driving forces behind the shortage, read THIS LETTER, published in the March 2004 issue of Inside Self-Storage magazine.] Concerns seem to have stabilized, but there are no guarantees the scenario won't repeat in some form.


Divination tools aside, you do have other methods for anticipating coming trends. For example, next Wednesday, you can particpate in a conference call addressing 2007 forecasts for construction segments and materials. Presenters will include Ken Simonson, chief economist for the Associated General Contractors of America; Jim Haughey, chief economist of Reed Construction Data; and Jack Basso, chief operating officer of the American Association of State Highway and Transportation Officials.


These guys will be addressing the issues of price and supply for specific market segments. They'll talk about things like:

  • Whether the housing meltdown will continue and if/how it could affect the nonresidential construction market.
  • Which construction segments are most likely to stay "hot."
  • If highway construction is like to continue expanding.
  • The prospects for public and private funding with the new Congress.
  • The outlook for materials costs, including which items are likely to be in short supply.
  • Whether labor and subcontractor shortages are likely to continue.


The call will take place on Wednesday, Dec. 6, 2-3:30 p.m. ET. To register , contact Dasha Brock at 703.837.5408 or [email protected].

Sovran Self Storage Prices Stock Offering

Article-Sovran Self Storage Prices Stock Offering

Sovran Self Storage Inc., a real estate investment trust that operates the Uncle Bob's chain of storage facilities, announced a price of $56.25 per share for its current stock offering. The Buffalo, N.Y.-based company will offer 2 million shares, with a closing date of Dec. 4. Underwriters have a 30-day option to buy up to an additional 300,000 shares. Sovran said the sale proceeds will be used for property acquisitions, general business purposes and to repay debt. For more information, visit www.sovranss.com.

Big Yellow's Profits Surge

Article-Big Yellow's Profits Surge

Big Yellow Group PLC, the largest publicly traded self-storage operator in the United Kingdom, said its profit for the first half of the fiscal year increased 35 percent, as the company opened sites and the value of existing ones climbed. Net income in the six months ended on Sept. 30 rose to £41.1 million pounds from £30.4 million pounds a year earlier, according to Bloomberg News.

In a July share sale, Big Yellow raised £36.4 million to fund expansion and pay for its conversion to a real estate investment trust. Britain is introducing REITs starting Jan. 1, exempting property companies that distribute at least 90 percent of taxable profit as dividends to pay little or no corporate taxes.

Big Yellow raised its first-half dividend 75 percent to 3.5 pence per share. The company confirmed that from next year, it plans to pay higher dividends than required under REIT rules.

Last month, the company agreed to franchise a network of stores in the United Arab Emirates. It will open its first store in the region in Dubai in the first half of 2008. The company may also start franchises in other countries. For information, visit www.bigyellow.co.uk.

ISS Blog

Self-Storage: The 'Classified Ad' of the Real Estate World

Article-Self-Storage: The 'Classified Ad' of the Real Estate World

Wondering what the heck I mean by THAT? Then you'll want to read today's blog post by Robert X. Cringely. He's drawn an interesting comparison between self-storage and the the classified ad section of your daily newspaperboth are "modest but lucrative" and generally underestimated in terms of financial impact because they aren't "sexy." He also believes self-storage to be a phenomenal investment. Check it out.


By the way, I'd never heard of Cringely before today, so for those who'd like to know, he's a tech guru. Not only is he the host and writer of the PBS mini-series "Electric Money," he's the author of Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can't Get a Date. His work has appeared in publications such as The New York Times, Newsweek, Forbes, Upside, Success, Worth, and others.


I don't know whether Craigslist is responsible for the death of newspaper, but Bob is certainly correct about self-storage as a good place to put your mula.


Hope you all had a safe and happy day of gluttony. Now brace yourselves (and your wallets) for the big doozey coming up!

Buchanan Partners With RBC Capital Markets

Article-Buchanan Partners With RBC Capital Markets

Buchanan Storage Capital joined forces with the Real Estate Mortgage Capital Division of RBC Capital Markets to provide commercial mortgage-backed securities (CMBS) for the self-storage industry. RBC will finance storage properties through Buchanan and, in exchange, it will get first right of refusal on all of Buchanan's CMBS storage loans.

During the first 60 days of operation, the partnership has quoted and secured more than $50 million in self-storage financing, and recently closed its first two loans, totaling $13 million.
 
The new venture, called Buchanan Fixed Rate Direct, was developed with the aim of providing self-storage owners with high-quality customer service, direct access to decision-makers and faster closings. Though the venture is new, both companies are well-versed in CMBS financing, and BSC will continue to provide its range of lending options.
 
While the program is an important keystone for Buchanan, the company still plans to continue working with other banks and financial institutions for self-storage properties in need of balance sheet or lending other than CMBS, said BSC Principals Jim Davies and Eric Snyder.
 
The RBC mortgage-capital division sources and securitizes commercial real estate loans on a variety of income-producing properties. Formed in 2006, the business is expected to close more than $1.5 billion of CMBS loans in its first year.
 
BSC provides capital to self-storage owners nationwide. Its parent company, Buchanan Street Partners, is a national real estate investment bank that provides capital and advisory services for owners and developers, and investment management for institutional and high-net-worth investors. For more info, call 800.675.1902; visit www.buchananstoragecapital.com.

Simply Self Storage Jumps to Top of Private Owners List

Article-Simply Self Storage Jumps to Top of Private Owners List

Last week, Orlando, Fla.-based Simply Self Storage acquired a 48-property portfolio from EZ Storage, making it one of the largest privately owned self-storage companies in the United States. The acquisition comprises 3.7 million rentable square feet in Massachusetts, Michigan, Minnesota, Ohio, Texas and Rhode Island.

The company has been steadily acquiring properties throughout 2006. In August, it bought a 29-property portfolio consisting of 1.6 million square feet from All Seasons Storage Trust and a four-property, $64 million portfolio in Puerto Rico. Just this month, it purchased a 26,000-square-foot storage facility in St. Clair Shores, Mich. According to the company website, it has more facilities under contract that should close by the end of the year.

Simply Self Storage is owned by OB Companies. It operates more than 10 million square feet of storage space and has offices or projects in 17 states. For more information, call 407.248.7878; e-mail [email protected]; visit www.obcompanies.com.

North Pocono Storage Facilities Suffer Extreme Vandalism

Article-North Pocono Storage Facilities Suffer Extreme Vandalism

Vandals set fire to one North Pocono, Pa., self-storage facility early this week and severely damaged another. The first was left in ruins and the other will require thousands of dollars in repairs, reported The Times-Tribune.

On Sunday morning, ruffians set storage units and two vehicles ablaze at an Allstore facility. Thirty of the 34 units were destroyed, and the remaining four suffered smoke damage, said facility owner Lawrence Hartpence. He claimed he will have to rebuild the buildings from the ground up.

On Monday morning, David Durkovic, owner of Mt. Cobb Self Storage, found twelve of his 110 units trashed. The doors had been ripped off by a forklift. In addition, the shop door had been broken, and oil, empty gas cans and gas caps were scattered about the property. The owner's daughter, Amy Wallace, said she thought the vandals were attempting to set fire to the site.

Less then two weeks ago, 28 unit locks were found broken at the Cobb facility. Nothing was stolen during either incident, though damage for both occurences is estimated at $25,000. The owner is offering a reward to anyone who provides information leading to an arrest.

SIA and Streetview Group Launch Holiday Fundraiser

Article-SIA and Streetview Group Launch Holiday Fundraiser

Storage Investment Advisors LLP (SIA) and its marketing partners at The Streetview Group launched a Giving Season Initiative to help communities in need. The companies are reaching out to self-storage friends, colleagues and clients for financial support. All donations will be used to provide food, clothing, holiday gifts and other necessities to abused children and homeless families in Houston, Indianapolis and Los Angeles. Contributors can designate their funds to one or all of the following organizations:

  • Child Advocates, a Houston-based agency that guides more than 1,750 abused children each year to safe environments where they can thrive. Contributions will help fulfill kids holiday wish lists. (www.childadvocates.org)
  • The Downtown Women's Center, a Los Angeles group that provides meals, housing, healthcare, education and other support services to help homeless women become self-sufficient. Donations will help fulfill the womens holiday wish lists. (www.dwcweb.org)
  • Dayspring Center, an Indianapolis organization that provides emergency shelter, clothing, meals, case-management services and transitional housing support to 150 homeless families each year. Contributions will help SIA adopt families for the holidays and provide assistance throughout the year. (www.dayspringindy.org) 

The company hopes to collect all donations by Dec. 4th, which will allow time to fulfill recipients wish lists. A secure credit-card donation can be made at www.siallp.com/charity_form.htm. Accounts will be debited by Storage Choice, an SIA client that has donated its credit-card processing system.
 
Donations can also be mailed to 3440 Oakdale, Houston, TX  77004. Checks should be made payable to SIA - Giving Season Alliance.

ISS Blog

Heck, no, we won't go!

Article-Heck, no, we won't go!

Just a quick update on the Pasadena conflict between Southern California Edison and Persson's Nursery: On Friday, I mentioned there was a demonstration scheduled for the following morning. This did occur. Approximately 60 resident members of the Pasadena Open Space Preservation protested outside the farmers market.


The group has managed to gather 4,000 signatures from community members who want to see the green space provided by the nursery salvaged. The land owner (Edison) wants to lease it out to another tenant: RHC Communities, which will build a self-storage facility on the plot. Edison has offered the family-owned business a new location across the street, but the Persson's say the move would be too costly. At this time, the nursery is scheduled to close when its lease expires on Dec. 31.


The most recent article published in the Pasadena Star-News indicates the public may be successful in dissuading Edison from its decisionor at least in persuading the city council to vote against the project.


Personally, I'm rooting for Persson's. I'm a big advocate of family-owned business. Before you call me a traitor, keep in mind how many small storage facilities are out there and how the self-storage community reacts when one of our own gets ousted thanks to eminent domain or some other political struggle. What goes around really does come around. And anyway, plants are friends too.

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