Silver Hill Funding, a commercial mortgage lender and division of Bayview Loan Servicing LLC, has launched a lending program to address the “underserved” small-balance commercial mortgage market including self-storage properties. The lender will offer financing solutions for commercial real estate, with loan sizes ranging from $250,000 to $1 million, according to a press release.

Other eligible property types include light industrial, mixed-use, multi-family, office, retail and warehouses. “We are excited to offer a financing solution for the small-commercial properties that represent new opportunities for investors, business owners and their communities,” said Leslie Smith, senior vice president for Silver Hill.

Smith described the small-balance commercial lending space as “fragmented and underserved.” Silver Hill began offering small-balance commercial loans in 2004, closing and funding more than 35,000 transactions through 2009, the release stated.

The program includes financing for owner-occupied and investment properties, with terms available for five, seven and 10 years, amortizations up to 25 years, and loan-to-value ratios up to 75 percent. Flexible prepayment options and unlimited cash-outs are also part of the program.

“We want to hear from mortgage brokers who have not been able to find a place to finance their customers’ small-commercial deals,” said Michael Boggiano, senior vice president and national sales manager for Silver Hill. “Our solutions are a good match for creditworthy borrowers who have a story, but may not be able to find what they need through their bank or other sources.”

The company is initially accepting loan applications in Florida, with plans to extend the program nationwide during the first quarter of 2016.

Silver Hill Funding is a national, small-balance commercial mortgage lender. It’s a division of Bayview Loan Servicing, a residential and commercial mortgage loan servicer and lender. Bayview Loan Servicing is a subsidiary of Bayview Asset Management LLC, a full-service mortgage investment firm, which has specialized in building and managing mortgage loan portfolios for more than 20 years.

SecurCare Self Storage Inc., an affiliate of National Storage Affiliates Trust (NSAT), is hosting an online giveaway in which it will give a Christmas tree to one winner. To participate, entrants must post a photo of a themed holiday tree to SecurCare’s Facebook page, and include a brief description of the image and why they chose it.

All entries must be submitted by Nov. 30, and one winner will be randomly chosen and contacted on Dec. 1. The winner will receive delivery of a fresh Christmas tree of his choice, up to a $200 value. The contest is open to U.S. residents ages 18 and older.

Founded in 1988 and based in Lone Tree, Colo., SecurCare operates more than 140 storage facilities in 12 states.

Headquartered in Greenwood Village, Colo., NSAT is a self-administered, self-managed real estate investment trust operating 246 self-storage facilities comprising 14 million net rentable square feet. The company is owned by its affiliate operators, who are contributing their interests in their self-storage assets over the next few years as their current mortgage debt matures.

Extra Space Self Storage of Asia, a privately owned business, has added solar panels to two of its properties in Boon Keng and Kallang Way, Singapore. The operator is the first self-storage company in Singapore to use solar energy for some of its energy needs, according to a company press release. Extra Space partnered with LYS Energy, a Singapore-based independent power producer.

“As the discussions around sustainable energy come to the forefront in Singapore, it’s necessary for business leaders to incorporate ‘green’ strategies and move toward business models that prioritize sustainability,” said Extra Space CEO Kenneth Worsdale. “We’re pleased to be working with LYS Energy on our solar-panel initiatives for two of our facilities and reduce our carbon footprint. We hope to be a part of Singapore’s push for a more sustainable future.”

Expected to be operational this month, the solar-panel system will deliver an estimated 169 megawatt hours of clean energy annually, covering more than 10 percent of electricity consumption for the Boon Keng storage facility and 15 percent at the Kallang Way property. Both systems will offset 73 tons of carbon-dioxide emissions, according to the release.

“We are very pleased to support Extra Space in their efforts to make their business more environmentally friendly,” said Lionel Steinitz, CEO of LYS Energy. “As the first self-storage company in the country to utilize solar energy, Extra Space demonstrates that solar power can reduce pollution as well as operational costs. Our financing options empower businesses like Extra Space to go solar with no upfront capital investment and enjoy utility cost-savings over the long term.”

The initial project, which commenced in July 2015, is expected to be the first of more solar-panel projects for Extra Space. The Energy Market Authority, a statutory board under the Ministry of Trade and Industry of Singapore, reports the use of solar power in Singapore is on the rise and expected to increase in the next five years, the release stated.

Extra Space Asia opened its first self-storage location in Singapore in 2007 and now operates 26 facilities across Hong Kong, Malaysia, Singapore, South Korea and Taiwan. Its portfolio comprises more than 1.3 million square feet of storage space.

LYS Energy builds, owns and operates solar photovoltaic systems for commercial, industrial and public sites in the Asian-Pacific region. Through a power-purchase agreement, customers purchase the solar-generated electricity from LYS at tariffs lower than the prevailing utility tariff, according to the release.

Update 11/3/15 – U-Haul has opened East Town Moving & Storage of Green Bay. Situated on 10 acres, the facility officially opened on July 27 with renovations expected to be completed by March 2016, according to a company press release. It currently offers moving and packing supplies, towing equipment, truck and trailer rentals, and U-Box portable moving and storage containers.

General Manager Steve Krause is operating out of a trailer on the property while the building is being overhauled, the release stated. The facility has four employees and another dozen will be hired.

U-Haul plans to add 600 to 900 storage units as well as headquarters for the its marketing team. Once complete, the property will be a full-service U-Haul store with more than 84,000 square feet of space. 

"Revitalization of this side of town is needed as the area is seeing huge growth," Krause said. "The customers are very receptive. The location is well-known with a family-owned shoe store in our same strip mall."                 

The acquisition of East Town Moving & Storage of Green Bay was driven by U-Haul’s corporate sustainability initiatives, which support infill development to help local communities lower their carbon footprint, the release said. U-Haul’s adaptive reuse of existing structures eliminates the amount of energy and resources required for new-construction materials and helps local cities diminish their unwanted inventory of unused buildings, U-Haul officials said.

---

6/2/15 – Self-storage operator U-Haul Co. of Northern Wisconsin is moving forward with a $3.5 million conversion of a former Kmart building in Green Bay, Wis., to a self-storage facility. The company received a conditional-use permit last month from the Green Bay Common Council to convert 87,000 square feet of building space into self-storage, a retail showroom and regional offices for 35 employees.

The property at 2201 Main St. is close to the U-Haul Moving & Storage of Green Bay at 700 Main St. and the East Towne Mall, a restaurant and retail-shopping center. It’s expected to open by June 9, according to the source.

The city’s planning commission had several concerns when U-Haul first submitted its permit request in March, but the issues were resolved, the source reported. U-Haul agreed to create at least one outlot site for future commercial development, resurface the parking areas within two years, and improve the architectural façade of the building. The company also agreed to submit a landscaping plan for the development and limit commercial-grade vehicle displays to 15 stalls along Main Street, the source reported.

Established in 1945, U-Haul International Inc. has more than 40 million square feet of storage space at more than 1,000 owned and managed facilities throughout North America, including 11 in De Pere and Green Bay, Wis.

By Kay Schaefer

So “it” happened. Something has occurred at your self-storage property … A vehicle ran into your gate, the wind pulled up part of the roof, vandals broke into the office and caused damage, or worse, a fire occurred in one or more of the units. It’s upsetting, but being prepared with strategies to handle the situation before it happens can help soften the blow. Let’s review what to do and expect when you have property damage. This way, you’ll be ready to deal with these situations if one should occur.

Damage Assessment

Take a deep breath. Now, take an initial look at your property and gauge the severity of the damage. Is it something that’ll just need a bit of cleanup and minor repairs, or is the damage more severe, requiring a professional to fix it?

If it’s minor, address it quickly and be happy it wasn’t worse. If it’s more damage than you can remedy on your own, it’s time to call your insurance agent and file a claim under your policy. Let’s review your obligation and that of your insurance carrier, then address the repairs and cleanup of your property.

Duties Under Your Insurance Policy

Both you and your insurance carrier have duties under your policy when there’s a loss. Your duties require you to report the loss to your agent or carrier as soon as possible. This is usually done by phone. You’ll need to describe what happened and when with as much detail as possible. If there’s another insurance policy that may provide coverage for your loss, you must share that information, too.

First, take photos and preserve evidence of the damage. This isn’t only a policy requirement, it will help your claim experience go much smoother. The policy also requires you to protect your property from further loss as much as possible. This might include placing a tarp over a damaged roof, hiring a service to clean up water from a plumbing leak, or securing your property after the gate was damaged.

In addition, your policy requires you to document the value of what you’ve lost or what’s been damaged. Your adjuster can help you evaluate the harm. Depending on the amount, you may need to get one or more contractors to give you a bid on the repairs needed to bring your property back to the condition it was in prior to the incident.

Your insurance company is required to promptly and thoroughly investigate your claim for loss. When the damage is minor, this is typically accomplished via phone, e-mail or mail. When the damage is great or there’s some question about the cause of the loss, you insurance company might send an adjuster to your site to investigate and assist you in presenting your claim to the insurer.

The insurance company must also stay in touch with you. This means responding to any questions you have about your claim as well as sharing information about the investigation and the claim handling. The company must also make reasonably prompt decisions on paying or denying your claim, and paying all benefits owed under your insurance policy without undue delay.

Repairs

Once you’ve come to agreement on the scope and cost of repairs with your insurance carrier, it’s time to begin the work needed to bring your property back to good condition. You’ll want to hire a contractor to do the work. You’re ultimately responsible for supervising the repairs repairs. This includes hiring professionals to do cleanup as well as debris removal, reconstruction, repair or any other work required. You may be able to find the names of contractors who specialize in self-storage through industry associations. There are vendor members who’ve joined associations at a national and state level who understand the nature of self-storage operations, including common elements of construction and repair.

Your city, county or state could enforce building codes that affect the work required. You’ll be notified by them during the permitting process, or your contractor may already be knowledgeable about these codes. There’s a coverage offered under most insurance policies to address the added costs of dealing with building ordinances. Ask your insurance agent about it. If your property is older or a conversion, you could incur substantial code-related costs, so be sure this coverage is included in your policy and the limits are adequate.

Your policy also states how payment will be made. You want a policy that provides replacement cost with no coinsurance. This means you’ll be paid the full replacement or repair costs for the damaged property, subject to the limits in your policy. Coinsurance is a penalty imposed for under insuring your property.

You’re entitled to be paid the loss of actual cash value (ACV) under the policy prior to the completion of repairs. The ACV is determined by the replacement cost less depreciation. When you’ve finished repairing or replacing the damaged or destroyed property, you can then make a claim for the additional amount payable under the policy for the full cost of repairs or replacement.

Lost Income

If your income is reduced because you can’t rent units due to the damage, you may also have coverage under your insurance policy for loss of income, also know as business-income protection. To make a claim for recovery of lost income, you’ll need to provide enough information to verify the amount of your loss. This will include rent rolls, current occupancy rate, historical records of rent, and any documentation reflecting a seasonal fluctuation in your income. This same coverage can also pay for any extra expenses you generate that are necessary to prevent or reduce your loss of income due to property damage.

Loss-of-income coverage may end when the repairs are completed, but you may have a continuing loss of rental income until you can lease up your units. Your insurance policy may have an extended period of indemnity built into your coverage. This will extend the time period of your loss-of-income coverage for a set period past the completion of repairs. This is an important benefit because it gives you that added income protection while renting up units to the same level prior to your property damage.

Once your property has been repaired, you’ll be back to operation as usual. Don’t forget your insurance agent and carrier are there to assist you. Call them with any questions. Now that things are back to normal, congratulations! I hope “it” doesn’t happen again. If it does, you’ll know what to do.

Kay Schaefer is the senior underwriter for Deans & Homer, an insurance managing underwriter that has provided specialized coverage for the self-storage industry since 1974. She has more than 30 years of experience in writing unique insurance coverage. For more information, call 800.847.9999; visit www.deanshomer.com.

B Secured Self Storage in Angels Camp, Calif., donated free use of eight units for a flea-market last weekend benefiting victims of the Butte Fire, which recently destroyed hundreds of homes in Amador and Calaveras counties. Donations poured in from around the country for the event at 2999 Highway 49, Oct. 30-Nov. 1, the source reported. Victims of the fire were able to pick up a variety of items for free, including clothing, furniture, holiday decorations and shoes.

"These people have absolutely nothing, and a lot of them were uninsured and under-insured, and it's like ‘What can we do to make their lives easier?’” said Susan Yoder, one of the event’s coordinators.

The Butte Fire began on Sept. 9 and burned nearly 71,000 acres. It also damaged or destroyed 475 residences, 343 outbuildings and 45 structures. It was contained by firefighters on Oct. 15.

B Secured Self Storage also operates a storage property in Copperopolis, Calif. Property features include perimeter fencing, the sale of moving and packing supplies, security cameras, and truck rental. The Angels Camp facility also offers boat and RV storage and a wash station.

Update 11/2/15 – A second Fort Bragg soldier has been charged in the alleged break-in of more than 20 self-storage units in Raeford, N.C. The Hoke County Sheriff's Office arrested Dominique Lamar Schumpert, 23, on Oct. 29, according to the source. His charges include 21 counts of breaking and entering, four counts of larceny and others in the Oct. 3 thefts at Highway 401 Storage. His bail has been set at $600,000.

The men are also suspects in similar crimes reported on Oct. 12 and 14 at American Flag Self Storage at 2417 Gary St. in Fayetteville, N.C., police said.

---

10/28/15 – A Fort Bragg soldier is facing felony charges for allegedly breaking into units at a self-storage facility in Raeford, N.C., and stealing several items, including a vehicle. He’s also a suspect in similar break-ins at a storage facility in Fayetteville, N.C., according to the source. Authorities arrested Jace James Louis Buras, 19, on Oct. 26, in connection with the Oct. 3 burglaries at Highway 401 Storage at 4900 Fayetteville Road. Police are still searching for a second suspect.

Two men were captured on video surveillance breaking into several units just after 1 a.m. One of the suspects is seen smashing 11 of the facility’s 12 video cameras with a shovel, the source reported. Both wore gloves, and one had on a black and white mask. They pried the cylinder locks from the units to gain entry, leaving behind large holes on the metal doors, the source reported.

"The hardest part was calling the tenants involved and letting them know they'd been violated," facility owner Teresa Sprankle told the source. Sprankle discovered the crime several hours after it happened. She believes the men may have accessed the facility by cutting through a fence at the back of the 5-acre property, which borders a residential community, the source reported.

The thefts appeared to be methodical and well-executed, said Sprankle, who’s reviewed the video surveillance several times. She also said she didn’t recognize Buras as a tenant.

"Informants, they could've sent somebody in here looking for storage," Sprankle said. "You know, asking some questions and, of course, I'm going to tell them; and I take them around to see the units and so forth. They could gather enough information."

Hoke County investigators are comparing the Highway 401 video surveillance to that of another storage break-in in Fayetteville, in which the suspects also wore black and white masks, the source reported. No charges have been filed and the theft is still under investigation.

Information about Buras's military service was unavailable, but Fort Bragg investigators have assisted police in the investigation, the source reported.

Buras is being held at the Hoke County Detention Center under a $600,000 bond. He faces more than 30 felony and misdemeanor charges.

Aries Capital, a full-service commercial mortgage and real estate investment-banking firm, has launched LendingCap Commercial, an automated mortgage-banking platform specializing in non-recourse, permanent and bridge loans from $3 million to $75 million for self-storage and other commercial properties including hotel, multi-family and retail. LendingCap uses online automation to reduce the loan-processing time, according to a company press release. The time and cost savings are shared with the borrower as credits at closing.

“After decades in the lending industry, we’ve developed an intimate knowledge of what borrowers need and want, and we’ve re-engineered the loan process to fulfill unmet needs in today’s marketplace,” said Neil Freeman, chairman and CEO of Aries Capital. “LendingCap leverages a proprietary technology-based system to automate and streamline the commercial mortgage process, making it easier, more efficient and more cost-effective for borrowers in need of simple, non-recourse financing.”

The online platform is backed by Aries Capital’s 25 years of resources, relationships and experience, including more than $5 billion in successful loan closings, the release stated. Headquartered in Chicago, LendingCap will be led by Freeman and Aries Capital Senior Vice President Rushi Shah, who’ll serve as president of the company.

LendingCap originators work closely with an extensive network of vetted senior decision-makers for commercial mortgage-backed securities (CMBS) lenders and other institutional investors to offer competitive rates and terms, the release stated. An online dashboard allows borrowers, their employees, accountants, originators and underwriters real-time access to every step in the loan process. The company will provide five- and 10-year, fixed-rate, permanent debt for the refinance or acquisition of cash-flowing properties. The assumable loans allow loan-to-value ratios up to 75 percent and the flexibility to take cash out for other investments, company officials said. Non-recourse bridge loans from two to five years are also available.

More than $1.3 trillion in commercial loan balances will mature between 2016 and 2018, with CMBS representing more than $283.8 billion, according to the release.

“I’m excited to bring LendingCap to the marketplace, as it lays the foundation of what’s to come in the mortgage industry,” Shah said. “What was once a lengthy and inefficient process for seasoned borrowers will now be a more efficient and less-costly experience. Additionally, those new to institutional financing, who felt their only choice was a recourse loan from a local bank, will also now benefit from LendingCap’s competitive financing, faster closings and cost savings.”

The company is actively recruiting experienced loan specialists nationwide to originate loans through its platform. Résumés can be submitted online through the LendingCap website.

LendingCap Commercial is a national commercial-mortgage banker offering non-recourse permanent and bridge financing through CMBS and other institutional lenders.

Chicago-based Aries Capital has offices in Peoria, Ill., Houston, Miami and Phoenix. Since 1991, the company and its affiliates have arranged or directly funded more than $5 billion in debt and equity for healthcare, hotel/lodging, industrial, multi-family, office, retail and specialpurpose properties in the Caribbean and United States. Through its affiliates, it has also provided more than $500 million in tax-credit and mezzanine financing. Aries provides permanent and interim financing through direct correspondent relationships with CMBS lenders, hedge funds, life companies, regional banks and other institutional investors.

By Pamela Alton

In the course of operating my self-storage manager-placement company, one of the questions I’m most frequently asked by facility owners is, “How much should I pay my managers?” In my position, I get to see what owners are offering as far as wages, bonuses and benefits. I’ve also received thousands of manager résumés, and when I conduct my interviews with these candidates, I find out what their current salaries or wages are along with the types of bonuses or benefits they receive.

First let me say that wages, bonuses and benefits aren’t set in stone. They depend on whether a manager lives onsite or off, the facility size, and the manager’s level of experience. They’re different from business to business, owner to owner.

In this article, I’ll try to give you some averages based on what I’ve seen; but keep in mind some owners pay more or less than the average. I’ve always been and will continue to be a proponent of offering a good manager a decent wage for a job well done, regardless of what the statistics say. A good employee is worth his weight in gold, and it’s the person behind that desk that can make the difference between a clean, high-occupancy and financially successful facility and one that operates at below-average levels.

I’ve seen wages go up slightly in the past couple of years along with the quality of management staff. Managers are now more professional than when I started in this industry some 25 years ago. Back then, almost all facilities had resident managers. They were usually retired, older people. Some didn't even receive a wage, or they received only a very small one, since they were provided with an apartment. Things have changed dramatically since these "dark ages" of self-storage. Let’s take a look at manager compensation today.

Resident vs. Non-Resident

Some properties being built today still include a resident-manager apartment; others don’t. If you have a resident manager, he may be getting an hourly wage, but he’s most likely receiving a salary. Single resident managers earn somewhere between $24,000 and $34,000 annually. If they’re making an hourly wage, it ranges from $12 to $16 per hour.

A resident team includes two people (husband and wife, two brothers, mother and son, etc.) who live at the property together. Both work full time, five days per week. The salaries I see being offered range from approximately $39,000 to $46,000 annually per couple. This doesn’t include any benefits.

When your staff lives offsite, you’ll usually have a manager and an assistant manager as well as relief staff and perhaps a maintenance person. These employees will typically receive an hourly wage. On average, I see offsite managers earning $14 to $20 per hour. Relief or assistant managers are receiving an average of $11 to $14 per hour, and maintenance people are earning $12 to $16 per hour.

Exempt vs. Non-Exempt

Hourly wages is where the issue of exempt vs. non-exempt comes into play. Per the Fair Labor Standards Act (FLSA), a non-exempt employee is entitled to overtime pay, while an exempt employee isn’t.

Most employees fall under the non-exempt category. It’ll depend on how much they’re paid, how they’re paid and what kind of work they perform. According the FLSA website, employees who are paid less than $23,600 per year are non-exempt. Employees who earn more than $100,000 are exempt. Some self-storage owners think that because a manager is paid a salary and may oversee other staff, he falls into the exempt category and, therefore, doesn’t receive overtime pay.

To be exempt, your manager must regularly supervise two or more full-time employees or four part-time employees. "Supervise" means just that—the manager must interview, select, hire and train these employees, setting rates of pay and hours worked. He must also maintain production or sales records, plan and monitor staff work, handle employee complaints and discipline, etc. So most of your employees, even if they’re salaried, should be paid overtime if they work more hours than the normal schedule.

My advice is, if you’re paying a salary, make sure your manager is at least making the minimum wage required in your state, regardless of what any other storage companies are paying their staff. He should also fill out a weekly time card.

Bonus Programs

There’s no right or wrong when it comes to offering a bonus program. A reward that motivates me may not motivate you. When designing your program, discuss it with your managers. Money isn’t always what incentivizes them; however, it’s usually the right color and seems to be a one-size-fits-all kind of thing.

Bonuses can paid on a number of variables: per lease, per unit rented at full price, etc. These types of bonuses are easy to calculate. If the manager rented 50 units this month, at $10 per lease, his bonus is $500. Most facilities charge a one-time administrative or move-in fee that will cover the bonus without it coming out of the owner’s pocket. Bonuses paid on the sale of add-on products or services such as retail merchandise, tenant insurance or truck rentals is also quite common. How well a manager does on his telephone mystery-shop score is another benchmark I’ve seen used.

Achieving a monthly or annual income goal is another good measure for a bonus program, providing you include your manager in the design of the annual budget so he understands things such as where he can raise rents as well as why he should collect late fees, rent units at full price and sell retail merchandise. He should then receive a percentage of that income. Remember, a bonus should be obtainable. One that isn’t only serves to de-motivate instead motivate.

Other Benefits

Other self-storage manager perks might include common items such as medical and dental insurance, a 401k program, and paid time off (vacation, sick and holiday pay). You might also consider more creative options such as trips to industry conferences, vacation packages, a big-screen TV, new carpeting in the resident apartment, etc. Think, too, about small things like movie tickets or dinner gift certificates just to say, “Hey, I appreciate the job you’re doing.”

Don’t forget that a simple phone call to say, “You did a great job this month” goes a long way. A pat on the back doesn’t cost you a single dime, but it’s one of the best motivators I know.

The moral of the story is, if you have a good manager, pay him well in wages and benefits. Also give him the authority to manage your facility on a daily basis, train him and give him the tools to do his job. Review the manager's job performance at least annually and give a raise or additional bonus if it’s warranted.

By doing these things, you’ll know if it is time to replace a so-so or bad manager. Don't put up with poor performance because you don't have the time or desire to go through the replacement process. Your manager can make or break your facility. Now, go tell your managers what a great job they’re doing for you!

Pamela Alton is the owner of Mini-Management Services, a company that has been placing self-storage managers in positions all over the United States since 1991. She also offers staff training, operational consulting, and facility audits and inspections. For more information, call 321.890.2245; e-mail [email protected]; visit www.mini-management.com.