AAAA Self Storage Management Group (The Nicholson Cos.), which provides facility-management services to the self-storage industry, raised $5,348 in donations across all its locations in October for the National Breast Cancer Foundation. The company encouraged customers to round up their monthly rent payments to whole amounts, giving the overage to the charity. For new customers, the company provided a 50 percent discount off the first two months rent in exchange for a $10 donation.

AAAA has supported the foundation during Breast Cancer Awareness Month (October) since 2011. In three years, the company has collectively raised $19,223.86. 

AAAA was founded in 1972 in Norfolk, Va., and currently owns or manages 47 self-storage facilities in the Southeast. It ranks No. 33 on the 2013 Inside Self-Storage Top-Operator List. The company offers services including staff training and evaluation, facility audits, consulting, facility startups, due-diligence inspections and valuations, brokerage, marketing and more.

AAAA also operates a Self Storage Affiliate Group that provides participating facility operators with bulk buying power and discounts on products and services such as credit card processing, office supplies, employee benefits, Web services and more. The affiliate group also offers a Customer Goods Protection Program and a Business Advantage Plan.

The economic recovery is in full swing, and the gradual unwinding of quantitative easing is inevitable. What does this mean for self-storage investors? The time to seek money is now.

In an ironic twist of fate, on the heels of arguably the greatest real estate recession since the Great Depression, the last 18 months of recovery have presented real estate investors with an unparalleled period of liquidity and low-cost borrowing. During this global financial crisis, the Federal Reserve took unprecedented actions, implementing monetary policies that restrained the federal funds rate to near zero, while simultaneously infusing massive volumes of capital into the market.

These actions kept mortgage-borrowing rates at artificially low levels, effectively bolstering the mortgage market. The removal of near-term interest rate risk aided in the refinance and restructuring of maturing and problem loans for borrowers and lenders, thereby enabling capitalization (cap) rates and real estate values to sustain a much-needed and expeditious recovery.

Today the economic recovery appears to be in full swing, and this strengthening of the economy has tremendous implications for upward pres­sure on interest rates. Last summer, Federal Reserve Chairman Ben Bernanke hinted that the Federal Reserve would soon begin the process of unwinding the quantitative easing by gradually decreasing bond purchases and letting securities mature. These insightful comments rightfully raised caution among the investment community, sparking an immediate spike in Treasury rates.

Specifically, within a short 60-day period last summer, the 10-Year Treasury increased more than 100 basis points, or more than 1 percent. As a result, the borrowing rates on 10-year mortgages went from the low 4 percent to the low 5 percent range in the blink of an eye.

The Fed has since softened its stance on easing, and Treasury rates have responded by settling a bit, currently hovering around 2.65 percent, which is well below its long-term average and not too far off from historical lows. Nonetheless, this gradual unwinding is inevitable, and theres widespread speculation that it could begin within the year.

What Happens Next?

Indicative of a stronger economy, the withdrawal of Fed monetary support will likely exert tremendous upward pressure on interest rates. In fact, the biggest looming unknown appears to be not if but when this upward rate movement will begin in earnest. To some, the upward movement witnessed this summer was the beginning of the end of the unprecedented low interest-rate borrowing window. Regardless, the tapering of the Feds quantitative easing is expected and should mark a return to a more normal credit environment, which is far less reliant on artificial policy intervention.

Though it will raise some headwinds for investors in the near term, positive economic trends should ultimately help boost commercial real estate performance. Conventional wisdom would dictate that a rise in interest rates would instigate an increase in cap rates, which ultimately undermines property values and weakens commercial real estate returns. Theres little doubt that rising interest rates inevitably exert upward pressure on cap rates.

Nonetheless, during inflationary periods, property owners benefit from an ability to push rents, resulting in increased property values through an increasing net operating income (NOI). After all, its the very hybrid nature of commercial real estate that makes it such a com­pelling investment option, with its steady and bond-like cash flow compo­nent, even during economic downturns, as well as an appre­ciation component that often acts as an inflationary hedge.

The inherent nature of self-storage and its short-term leasing only provides a further competitive advantage in this regard, by effectively affording in­vestors in this asset class the flexibility to quickly and frequently adjust market rates through prudent revenue-management practice, complemented by proven recession-resistant demand characteristics for the product.

Although the debt and equity markets are once again on solid footing, the credit environment is not without risk, and volatility should always be expected. There are still many factors looming today, far beyond the laymans control, which bring a level of uncertainty that muddies the water. This includes looming debt-ceiling discussions, geopolitical tensions in the Middle East, the effects of government sequestration, and declines in federal spendingall of which could hamper economic growth and disrupt the financial markets.

Regardless, the current demand for all com­mercial real estate, including self-storage, is being supported by the strengthening economy. Occu­pancy and rent growth gains remain strong, and supply risks, while increasing, remain minimal. Mortgage investors continue to have sharp demand for commercial-mortgage bonds, and credit spreads have remained stable while the Treasury market rallies, keeping borrowing rates near historical lows at present.

For the time being the historic window of low interest-rate borrowing remains very much open. If you havent done so already, perhaps its time to listen to the sweet sound of opportunity knocking and take advantage of this chance to refinance your assets into a long-term debt product that will ultimately help insulate you from any negative effects of a rising interest-rate environment!

Based in Chicago, Shawn Hill is a principal at The BSC Group, where he advises clients on debt and equity financing and loan-workout services for all commercial property types nationwide, with an emphasis on the self-storage asset class.  He can be reached at 312.207.8237; e-mail [email protected]; visit www.thebscgroup.com .

Storrage Inc., an app-based startup business specializing in valet self-storage services, recently launched in Seattle. The business model is designed to make the process of obtaining self-storage easy for consumers by allowing them to use the app on Apple and Android devices to schedule next-day pickup or delivery of their belongings.

Our research has shown that most urban homeowners and apartment dwellers would love the ability to find a place to store occasionally used items, but the current model of driving to a storage locker, or filling a pallet of stuff, simply isnt a convenient, workable solution for about 90 percent of the market, said Terry Drayton, CEO, who founded the company with other former executives of HomeGrocer.com, a grocery-shopping website built on the Amazon.com platform.

All aspects of the Storrage service are managed through the mobile app. When the company receives a storage request, it delivers 17-gallon, commercial-grade containers customers use to store their items. There is a weight limit of 35 pounds per bin. Customers also have the option of taking photos with their smartphone, so they can remember exactly what they stored and request delivery of only the items they need. All customer data is stored in the cloud, and the bins are stored in a secure, climate-controlled warehouse.

Our mobile app provides a vastly superior customer experience compared to traditional storage options, Drayton said. For example, instead of having to drive out to a self-storage site and dig through boxes in a dusty storage unit to find a pair of snow boots, Storrage customers browse through their items in the app, quickly locate the appropriate container with a picture of the boots, and have it delivered to their door the next day.

The service is designed for people who want to store seasonal or seldom-used items, including clothes, documents and keepsakes, company officials said in a press release. Customer fees depend on the number of bins stored and how often a customer requests delivery of belongings. The cost to store items is $4 per container per month, but Storrage will drop the storage fee to $2 per container if customers purchase their bins for $19 each. Storrage will also accept larger items, including bicycles, golf clubs, skis and snowboards, for an additional cost if customers store five or more containers. Pickup and delivery service costs $15, plus $2 per container. The average monthly cost per customer is expected to be about $25, company officials said.

Storrage received $1.5 million in Series A funding earlier this year, raised largely from investors in the Pacific Northwest. The company plans to offer Storrage franchises beginning in 2014.

Storrage customers pay about 85 percent less than the average amount paid by self-storage customers, Drayton said. The storage industry has not modernized to keep pace with emerging technologies, like smartphones. Just like Uber is rewriting the rules of the taxi business, we intend to shake things up and deliver a vastly superior customer experience.

U.K. self-storage operator Big Yellow Group PLC released its operating-performance results for the first six months of its fiscal year, following the quarter ending Sept. 30. The company reported revenue of £35.9 million, down 1 percent from the same six-month period a year ago but in line with expectations following the 20 percent value-added tax (VAT) imposed by the government in October 2012. Self-storage facility revenue was up 7 percent compared to the previous six-month period, which ended March 31.

Occupancy for Big Yellows 54 wholly owned locations was 70.5 percent during the six-month period, up 5 percent from a year ago. The result was encouraging to company officials who believe Big Yellow has absorbed the negative effects of the VAT.

"We have delivered a good performance with occupancy growth across the wholly owned portfolio in line with the same period last year. This occupancy growth, combined with an improvement in yield, has offset the adverse impactparticularly within the established portfoliofrom the introduction of VAT in the second half of last year, said Nicholas Vetch, executive chairman. We achieved like-for-like revenue growth of 5.1 percent in October (the first month following the anniversary of the VAT introduction), demonstrating that the VAT impact is firmly in the past, and we are now returning to more normal growth.

Net rent per square foot increased 2.9 percent during the period, and the companys adjusted profit before tax increased 2 percent to £14.2 million. The company also reduced net group debt by £1.8 million to £228.6 million.

Since the end of September, Big Yellow has experienced what it called a seasonal loss in occupancy of 32,000 square feet, but the move-outs are substantially better than a year ago when it lost 91,000 square feet of occupancy during the same period. The move-outs have been in line with our expectations following the strong summer trading, company officials said. This improved performance is largely driven by an increase in move-ins of 14 percent compared to the same period last year, coupled with the impact of VAT in the prior year.

In our final statement earlier this year, we expressed some cautious grounds for optimism which currently looks justified, given the improving economic picture and current trading, Vetch said.

Big Yellow Group operates 66 self-storage locations in the United Kingdom under the Big Yellow Self Storage brand name, with most concentrated in Greater London. The portfolio comprises 4.2 million square feet.

A proposed self-storage development in San Simeon, Calif., is being called out of scale with the communitys land-use mandate, which may force the developer to reduce the scope of the project. San Luis Obispo County planners said in a Nov. 4 report to the North Coast Advisory Councils Land Use Committee that the original project design from developer David Sansone was too large. The council will discuss the proposal further today at a 6:30 p.m. meeting at Rabobank in Cambria.

The original proposal for the self-storage development at 927 Avonne Ave. called for the facility to be built in three phases and total 52,819 square feet and 214 units. County planners will propose scaling the project to just the first phase, according to Laurel Stewart , the advisory councils committee chairwoman . It would include 8,295 square feet and 53 storage units, RV and boat storage, and a 1,181-square-foot building for the resident manager . County officials would also like to see the development moved to the back of the property so the front would be available for future residential, multi-family development.

Phase two of the original project design would convert a portion of the boat/RV parking to an additional 15,256 square feet and 58 storage units. Phase three would convert the rest, adding another 29,268 square feet and 103 units.

The countys mandate states facilities should be designed primarily to serve the needs of apartment residents in the same land-use category, given the number of dwelling units and population in the community, according to the source.

The large scale of the self-storage development didnt fit with the stated goals for San Simeon as a special community in the North Coast Area Plan, Stewart told the source.

Scenic City Storage in Chattanooga, Tenn., was recently sold to Andover Properties, dba Storage King USA, for an undisclosed sum. The property at 5027 Hixson Pike contains 495 units encompassing 64,323 rentable square feet.  Originally developed as a big-box retail store, the building was converted to self-storage in 2003 and expanded in 2007.

The facility benefits from excellent exposure on the Hixson Pike and is directly across from Northgate Mall, according to a press release. It provides amenities including secured gates with control keypads, boat and RV parking, document storage, and packing supplies.

The seller was represented in the transaction by Doug McCarron, Steve Mellon and Pete Williams, managing directors of the Jones Lang LaSalle National Self Storage Team.

We hope that this will be our first acquisition of many in the coming months," said Brian Cohen, president of Andover Properties, which disposed of the majority of its self-storage assets in 2012.

Scenic City Storage serves Chattanooga, Hixson, North Chattanooga, Ooltewah, Red Bank, Signal Mountain, Soddy Daisy and other Tennessee towns.

Jones Lang LaSalle is an investment-management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, the company operates in 70 countries from more than 1,000 locations worldwide.

The firm also provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet. It completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment-management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management.

Investment Real Estate LLC (IRE), a property-management and consulting firm specializing in the self-storage industry, has hired Richard Clark as maintenance manager. Clark works directly with Rod Lockard, vice president of IRE Construction LLC, and is responsible for property maintenance at the company home office as well as all IRE-managed self-storage facilities.

His responsibilities include building appearance; parking lot and fence repair; lawn care and landscaping; facilities maintenance such as painting, electrical work and general repairs to the office and storage buildings; and other construction needs on location as necessary. Clark also assists on construction and renovation projects for IRE Construction.

Clark has more than 36 years of residential and commercial construction experience. He has worked for major construction firms in the York, Pa., area such as Abel Construction Co. and Keystruct Construction Inc. He has a wealth of knowledge in general carpentry including blueprints and site drawings, power tools, bridge construction and maintenance, concrete and masonry work, supervision of site personnel, problem solving, project completion, and professional customer-service skills. Clark has a degree in masonry from York County School of Technology.

I joined IRE and quickly learned they are a company that is dedicated to doing things right," Clark said. "The company and the employees take pride in their work, and it shows by how they treat their employees and customers. From my first day, they made me feel like one of the family.

Since its inception in 1998, IRE has specialized in the self-storage industry, providing brokerage, construction, management and development services to owners and investors.

Mercy Mall, a charitable cooperative housed in units at three Richmond, Va., self-storage facilities, will hold a special event on Dec. 21 during which parents in need can pick out gifts for their children free of charge. Participants can shop for new and used toys, gifts for teens, stockings and stocking stuffers, food, and clothing for the holidays. Volunteers will be on hand from 10 a.m. to 2 p.m. to wrap presents.

The nonprofit organization runs year-round, providing free goods to those in need. The mall is housed in storage units and offers nonperishable food, clothing, laundry detergent, baby-care equipment, household goods, and health-and-beauty items.

One Mercy Mall location is in Henrico County at Laburnum Racetrack Self Storage, 1400 E. Laburnum Ave. in Richmond. The other two are in Chesterfield County at Uncle Bobs Self Storage, 3830 N. Bailey Bridge Road in Midlothian, Va., and Walthall Self Storage, 14324 Jefferson Davis Highway in Chester, Va. The Walthall location is the organizations largest, housing charitable goods in about 1,500 square feet of space.

Items at all three facilities are available on an honor system without rigorous screening. Were here for people who slip through the cracks, said Stacey Jones, Mercy Malls founder.

Families who have been helped by the charity often return to donate items of their own when they are back on their feet, Jones said. Thats just beautiful to see someone we helped coming back to help others, she said.

Mercy Mall is a subsidiary of Grace Home Ministries, a local non-denominational, faith-based, nonprofit dedicated to helping young women with unplanned pregnancies. The group provides safe shelter, nutritious meals, counseling services and life-skills training, and facilitates prenatal care.

Jesse Flores, self-storage manager at Alaska Mini Storage in Fairbanks, Alaska, has become a kind of Santa Claus figure in the world of Hot Wheels collectors, sharing and giving away portions of his personal collection. Flores regularly sends packages known a RAOKs (random acts of kindness) to names on a growing list of more than 200 collectors whom he has met through online groups.

Flores, 46, is known as Big Frosty among collectors. Several RAOK recipients have posted YouTube videos of themselves opening their packages. Some of the contents given away by Flores are worth more than $200, according to the source.

"It's one of those things that I'm fortunate enough to where I can purchase and get items that most people would not even consider going after," Flores said. "They only want one car out of the series, [so] why buy a $40 case? I don't care; I buy a $40 case and like 90 percent of these cars are gone because I have these relationships in these groups where I have no problem just sharing my toys."

Flores love of Hot Wheels started during a troubled childhood. He spent much of his early upbringing with grandparents in Mexico before rejoining his parents and siblings in Los Angeles. "I just felt like an outsider, so as a child I just had these issues; but the one thing that sticks out is me playing and having fun with Hot Wheels," he said. "I think that's a direct correlation to how I feel now. Yes, I'm in a better place now, but I remember my childhood as not such a happy place; but there are happy moments. You find me a patch of dirt and it was an escape from the turmoil of the family situation that I was in."

Flores said he made a living selling Hot Wheels through eBay for eight years, but he gave up the idea of trying to profit from the toys when he connected with fellow enthusiasts online who rekindled his love of collecting and sharing. The collectors he admires or develops friendships with often wind up on his RAOK distribution list.

The self-storage managers most prized possession is a container of 48 original Hot Wheels from his childhood, although his personal collection is about 2,500 cars. He has another 6,000 Hot Wheels in a heated storage unit at his facility, most of which will be packed and shipped to fellow collectors, he said.