Iron Guard Storage, which operates 21 self-storage facilities in nine states, has acquired A Willis Storage Center in Newburgh, Ind., its second facility in the state. The property at 6998 Loehr Road is at the intersection of Highway 66 and Outer Lincoln Avenue, near other retail establishments. It comprises 74,562 square feet in 560 units and parking spaces.

The buyer and undisclosed seller were represented in the transaction by Sean M. Delaney, Jeffrey L. Herrmann and Michael A. Mele, investment specialists for Marcus & Millichap (M&M).

The property was previously operated by Storagekeep Self Storage, which has another facility in Evansville, Ind.

Iron Guard operates facilities in Alabama, Arkansas, Georgia, Indiana, Nevada, North Carolina, Texas, Virginia and Washington. In addition to traditional storage, it offers vehicle storage.

Founded in 1971, M&M is a commercial-property investment firm with more than 1,500 investment professionals in offices throughout Canada and the United States.

Sources:
REBusiness Online, Marcus & Millichap Brokers Sale of 560-Unit Self-Storage Facility in Newburgh, Indiana
Iron Guard, Website
A Willis Storage Center, Website
Storagekeep, Website

ADV Surprise Property Owner LLC of McKinney, Texas, has purchased RV Harbor, a boat/RV-storage operation in Surprise, Ariz., for $7.5 million from RV Harbor LLC. Built in 2003, the facility at 13516 W. Foxfire Drive comprises 201,476 square feet of storage space in 421 canopy or fully enclosed spaces.

The buyer and the seller were represented in the transaction by Paul Boyle and Rick Danis, executive directors for real estate firm Cushman & Wakefield.

“The RV- and boat-storage industry continues to increase in popularity with both investors and developers,” Boyle said. “[ADV] has historically been focused on existing self-storage facilities. RV Harbor represents their first acquisition in the RV- and boat-storage business.”

Founded in 1917, Cushman & Wakefield offers a complete range of services for all property types including consulting and appraisal, corporate services, debt and equity financing, investment banking, leasing, and sales and acquisitions. The company employs 48,000 people in approximately 400 offices and 70 countries. In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services.

Bob and Linda Snyder, owners of Catawba Mini Storage in Port Clinton, Ohio, this week awarded 45 grants totaling $155,000 to local nonprofits using funds collected from their community thrift store, Portage Resale Center (PRC). The recipients included advocacy and counseling groups, child-abuse prevention centers, church programs, food pantries, public libraries, school-community programs, and other organizations, according to the source.

Portage Resale Center collects donations of books, clothing, furniture and household items. Some are given directly to families in need while others are sold in the store. To date, the center has gifted $594,000 to various agencies in Ottawa County, the source reported.

The Snyders established the thrift store in 2011, raising $22,000 that year for local charity programs. “When we began, we had four classrooms at the old Portage Elementary School, and what we believed was a great idea to provide funding for many deserving nonprofit groups in the community,” Bob Snyder said.

The store moved to the Heineman Building at 301 W. Second St. a year later. “The building was gifted to us by Mary Heineman after the death of her husband, Harry, in 2011. We developed it into a wonderful place to shop for gently used items with prices people can more easily afford,” Bob Snyder said.

PRC is managed by three full-time employees as well as volunteers. It contains a food pantry and offers pickup for donations of heavy items such as furniture. The organization is directed by a 10-member board, with six determining which grants will be awarded from the dozens of applicants the center receives each October.

Board member Heather Stouffer attributes the thrift store’s success to the community. “All of our volunteers, our shoppers and our donors are the fuel that makes us a success,” she said. “The Portage Resale Center is the vehicle, and the charity organizations are the drivers.”

Stouffer also helped create the Portage Resale Center Youth Council, which includes 10 students from five Ottawa County high schools. The students visit two nonprofits in the community monthly.

“These kids were blown away by the need that they saw around the county, and [they] started a drive that raised $4,000 for United Way,” Bob Snyder said. “They also began a clothing drive in the schools, gathering clean, age-appropriate clothes to be sold at Portage Resale Center.”

Catawba Mini Storage at 4789 E. Muggy Road offers more than 100,000 square feet of climate-controlled and drive-up storage units, vehicle storage, and large units for commercial use. The business was established more than 20 years ago, according to its website.

Source:
The Beacon, Portage Resale Center Sets Record, Awards 45 Grants Totaling $155,000

 

Empire Storage LLC has received city approval to build a three-story self-storage facility in the West Side area of Stamford, Conn. The property at 11 Leon Place will comprise 67,220 square feet in about 470 units. Zoning on the odd-shaped, 1-acre parcel was changed to a neighborhood mixed-use design district last summer to encourage investment in the area, according to the source.

The facility will feature a mix of building materials on its façade. Lisa Feinberg, an attorney representing Empire, told city officials the property would be “the most attractive self-storage facility in the city, if not the state.”

The project will also include parking and site improvements. Empire agreed to improve the streetscape after receiving pressure from the Land Use Bureau, which is in the process of formalizing “urban design guidelines,” the source reported.

Empire previously hoped to develop housing on the lot but changed direction after residents objected to potential traffic issues.

Sources:
Stamford Advocate, Point of Interest: New Self-Storage Facility Coming to Stamford’s West Side
Connecticut Public Notices, Legal Notice Zoning Board - City of Stamford Appl. 218-48

2018 was a good year for self-storage. Rents have continued to increase, demand seems to be endless, and a flood of capital has entered the sector. This new money has pushed prices to all-time highs, and lenders have been busy with new acquisitions and refinancing existing properties for owners who wish to recapitalize or expand.

With interest rates holding steady, it’s a great time to consider refinancing your loan, whatever your needs may be. Following are the many lending options available to facility owners including the pros and cons of each.

Commercial Mortgage-Backed Securities (CMBS)

CMBS lenders are back with revised loan programs that still feature long-term fixed rates up to 10 years. Loans are also non-recourse, except for environmental hazards and fraud. Generally, these loans are best suited for stabilized, class-B and better properties in major metropolitan areas.

Most lenders prefer loans greater than $3 million, which will limit eligible properties. There are few options for loans of less than that amount, with only one or two lenders offering programs. Borrowers need to have significant liquidity in the neighborhood of 10 percent of the loan amount, with net worth equal to the loan amount.

Pros:

• Long-term fixed rates are available, with terms from five to 10 years.
• Higher-leverage loans are available, with advance rates up to 75 percent loan-to-value (LTV).
• Cash out is available for qualifying properties.
• Lenders are transactional in nature, with no further banking obligations.
• Loans are non-recourse to the borrower.

Cons:

• Few options exist for transactions of less than $3 million, which make up the bulk of self-storage loans.
• There are significant upfront good-faith deposits and high transaction costs.
• After closing, there's limited flexibility for expansion or significant changes to the property.
• CMBS loans include high prepayment costs (defeasance or yield maintenance).

Insurance Companies

Insurance-company lenders are, in many ways, similar to CMBS in that they specialize in long-term, fixed-rate loans to high-quality facilities in major metropolitan areas. Most won’t lend less than $5 million, with many having minimum loan sizes of $10 million. This makes it difficult to qualify for all but larger self-storage properties in major markets. Owners with portfolios or bigger properties will find these rates and terms to be some of the most attractive.

Similar to CMBS, insurance-company loans are generally made on properties that are stabilized or near stabilization with strong cash flow. Borrowers need to have significant net worth and liquidity. Insurance companies often offer non-recourse and recourse loan options.

Pros:

• Fixed-rate, long-term loans are available, including fully amortizing loans up to 25 years.
• Interest rates are generally the lowest available.
• There’s greater flexibility after closing for expansion or other significant changes.
• Cash out is available, although limited to lower LTV.
• Non-recourse options are available.

Cons:

• Borrowers need to have significant net worth and liquidity.
• Loan advance rates are generally limited to 65 percent LTV, with many insurance companies limiting advance rates to 50 percent or less.
• Few properties will qualify, with most on the East or West Coast or in large metros.
• There can high prepayment costs (typically yield maintenance).

Small Business Administration (SBA)

SBA loans can offer self-storage owners an array of options including short-term funding through the 7a program and long-term options through the 504a program. Lenders can also offer fixed and floating rates through both.

SBA offers the highest advance rates available of the major loans programs—in some cases, up to 90 percent. However, these loans aren’t meant for all owners. As the name would indicate, they’re focused on active business owners and operators, not passive investors.

Pros:

• Short-term (7a) and long-term (504a) money is available with floating and fixed rates.
• Higher leverage loans are achievable, up to 90 percent LTV, with realistic LTV at 80 percent.
• You can build additional project costs into financing such as capital improvements and working capital.
• These loans can be used for property expansion and new construction in some cases.

Cons:

• There are stringent document requirements.
• These loans carry high transaction costs, typically between 3 percent and 4 percent of the loan amount.
• Cash-out financing isn’t available.
• Processing and closing times can be long, which poses problems for acquisitions.
• Borrowers with significant net worth and liquidity won’t qualify.
• Third-party managed properties will have difficulty in qualifying.
• Prepayment restrictions are fixed but can be high.

Banks and Credit Unions

Bank and credit-union loans offer the widest variety of terms and rates. In fact, banks may have more than one of the above-mentioned loan programs in addition to their commercial real estate loan platform.

Generally, bank and credit loans are considered short- to medium-term loans from one to seven years that can have a fixed or floating rate or, in some cases, a combination. Interest rates are typically some of the most competitive available. However, in exchange for access to this money, these institutions want a deeper relationship that may include deposits, lines of credit or additional lending opportunities.

Pros:

• Short- to medium-term loans are available, from one to five years.
• Advance rates range from 70 percent to 75 percent LTV.
• Fixed and floating rate options are available.
• Construction and expansion loans are available for qualifying borrower and properties.
• Nationally chartered credit unions have no prepayment restrictions.

Cons:

• Longer-term solutions for stabilized properties are typically limited.
• Non-recourse lending options are limited but might be available at lower LTV ratios.
• These loans are more relationship-focused and may require a broader depository relationship.

Private Lending

Finally, there are private lenders, which include long-term private lenders, hard-money lenders and bridge lenders. These offer the most flexibility as they’re willing to lend on non-cash-flowing properties, properties in lease-up, refinance of discounted payoffs, and mortgage-note purchases. In exchange, interest rates are typically between 10 percent and 15 percent. Due to the high cost, these loans are typically measured in months rather than years. Loans are also typically full-recourse obligations and may require additional collateral to be posted.

Pros:

• Loans often close in a matter of days rather than weeks or months.
• Deals can be underperforming or non-performing; however, there needs to be a clear roadmap to a permanent finance solution.
• There are long-term financing options for clients looking for alternatives to CMBS.

Cons:

• These loans are short term in nature, lasting months rather than years.
• Additional collateral is often required to be posted for the loan.
• These loans are the highest in interest-rate and transaction costs as well as upfront points.

How to Choose?

The current interest-rate environment makes this one of the most desirable times shop for a self-storage loan. While there are many options, the difficulty arises in selecting the right type of financing and then pushing through to receive the actual capital. Hiring a mortgage professional to help navigate these choices and determine the best solution can ease the process. Whichever loan you choose, this primer offers a starting point for successful banking.

Noel Cain is senior vice president of The BSC Group, where he works with clients to provide debt and equity financing that fit each self-storage owner’s goals. He also has significant experience in underwriting, development and cash-flow modeling as well as due diligence and site analysis. For more information, call 800.605.7880; visit www.thebscgroup.com.

Self-storage properties are constantly changing hands, and Inside Self-Storage is regularly notified of these market transactions. Many are covered in detail on the ISS website and available for viewing on the “Acquisitions and Buying” topics page. Following are additional acquisitions and sales that weren’t covered.

4 Your Stuff Storage in Granite City, Ill., was sold for $3.7 million. The facility at 3117 W. Chain of Rocks Road comprises 64,645 square feet in 261 units. The buyer and the seller were represented in the transaction by Sean M. Delaney, senior vice president of investments, Britney Hendricks, investment associate, and Michael A. Mele, executive managing director of investments, for Marcus & Millichap (M&M).

Aero Drive Self Storage in San Diego was sold to a national operator. The property at 9645 Aero Drive comprises 88,000 rentable square feet. The buyer and the seller, Los Angeles-based Baron Equities, were represented in the transaction by Greg Wells, senior director of the Cushman & Wakefield Self Storage Practice Group.

Alliance Moving & Self-Storage Center in Alliance, Ohio, was sold to a limited liability company (LLC) for $815,000. The facility at 23649 Harrisburg Westville Road sits on 5.35 acres and comprises 14,273 square feet in 68 units. The buyer and the seller, also an LLC, were represented in the transaction by Gabriel Coe and Brett R. Hatcher, investment specialists for M&M.

Bayfront Self Storage in Daphne, Ala., was sold to an out-of-state buyer for $500,000. The facility at 6384 Bayfront Park Drive contains 10,800 rentable square feet and a 2,600-square-foot office. The seller was represented in the transaction by Bill Barnhill and Shannon Barnhill, broker affiliates with Omega Properties Inc., an affiliate of the Argus Self Storage Sales Network.

Clifton Self Storage in Clifton, N.J., was sold. The facility at 47 Main Ave. comprises 49,555 rentable square feet in 583 units. The transaction was brokered by Bill Sitar Jr., vice president, Thomas Palumbo, vice president and broker sales associate, and Cowles M. “Monty” Spencer Jr., CEO and president, of The Storage Acquisition Group (TSAG).

Two CT Self Stor properties in Hartford, Conn., were sold to a joint venture between two institutional investors. The properties at 47 Chelton Ave. and 580 New Park Ave. comprise a combined 123,600 rentable square feet in 1,015 units. The seller, CT Self Stor of Connecticut, was represented in the transaction by Aaron Swerdlin, vice chairman, Kenneth Cox, executive managing director, and Taucha Hogue, director, of Newmark Knight Frank (NKF) Self Storage Group, as well as Patrick Lemp, senior managing director for WHSA LLC.

E-Z Self Storage in Lynwood, Ill., was sold to a private, equity-backed buyer. Situated on 6 acres, the facility at 19600 Stoney Island Ave. comprises 85,825 rentable square feet in 650 units. The seller, a private owner, was represented in the transaction by Ryan Clark, director of investment sales, and Parker Sweet, business-development associate, for SkyView Advisors.

Kangaroo II Self-Storage in Loveland, Colo., was sold to an East Coast investment firm. The facility at 100 Valency Drive comprises 75,325 square feet. The seller, a private LLC, was represented in the transaction by Charles "Chico" LeClaire, executive managing director of investments, and Adam Schlosser, first vice president of investments, for The LeClaire Group of M&M.

Kitsap Lake Storage in Bremerton, Wash., was sold to an institutional buyer for $16 million. The 3.75-acre property at 6400 Kitsap Way contains six buildings comprising 77,838 square feet in 709 units and a 1,250-square-foot rental office. The buyer and the seller, an LLC, were represented in the transaction by Christopher R. Secreto, senior vice president of investments with M&M.

S&E Mini Storage in Baltimore was sold. The facility at 3464 Wilkens Ave. comprises 70,000 rentable square feet in 652 units. The transaction was brokered by Pamela K. Arms, vice president for TSAG.

StorageKeep at A Willis Storage Center in Newburgh, Ind., was sold to Iron Guard Storage. The property at 6998 Loehr Road comprises 74,562 square feet in 560 units. The buyer and the seller were represented in the transaction by Delaney, Mele and M&M associate Jeffrey L. Herrmann. Fellow broker Josh Caruana assisted.

Storage World in Stockbridge, Ga., was sold. The property at 490 Eagles Landing Parkway comprises 91,000 rentable square feet in 724 units. The seller was represented in the transaction by Dale C. Eisenman, president of Midcoast Properties Inc.

Washington Self Storage in Indianapolis was sold to an LLC for $6.5 million upon Certificate of Occupancy. The property at 7828 W. Washington St. comprises 77,355 rentable square feet. The buyer and the seller, an LLC, were represented in the transaction by Coe and Hatcher. They were assisted by Caruana.

A self-storage development site in Goleta, Calif., was sold for $6.7 million. The property at 10 S. Kellogg includes 2.06 acres. The seller was represented in the transaction by Argus affiliates Peter Pappageorge and Doug Shea.

A self-storage development site in Kearney, N.J., was sold to a national self-storage developer based in Solana Beach, Calif. Plans for the 3-acre property include a five-story facility comprising 150,000 square feet. The buyer and the seller were represented in the transaction by Linda Cinelli, a broker affiliate for Argus and LC Realty Team.

Argus is a Denver-based network of real estate brokers who specialize in storage properties. Formed in 1994, the company has 36 broker affiliates covering nearly 40 markets.

Founded in 1917, Cushman & Wakefield offers a complete range of services for all property types including consulting and appraisal, corporate services, debt and equity financing, investment banking, leasing, and sales and acquisitions.

Founded in 1971, M&M is a commercial-property investment firm with more than 1,500 investment professionals in offices throughout Canada and the United States.

Midcoast Properties offers brokerage services to self-storage owners and investors in the Carolinas and Georgia.

With more than 50 years of experience, NKF has led more than $6.8 billion in transaction history across more than 770 properties.

SkyView is a boutique firm specializing in self-storage acquisition, development, facility expansion and renovation, refinancing, and sales. Based in Tampa, Fla., the firm also has offices in Cleveland and Milwaukee.

Based in Yorktown, Va., TSAG represents a private real estate investment fund that's solely focused on acquiring self-storage facilities. Sellers deal directly with the purchaser with no intermediaries and pay no sales commission.

Sources:

Digital Journal, The Storage Acquisition Group Announces the Sale of Clifton Self Storage in New Jersey
Digital Journal, The Storage Acquisition Group Announces the Sale of S&E Mini Storage in Baltimore
PR.com, Sold by Midcoast Properties, Inc. - Storage World in Stockbridge, GA
Rebusiness Online, SkyView Advisors Brokers Sale of 650-Unit Self-Storage Facility in Lynwood, Illinois
RE Journals, Granite City Self-Storage Facility Sells for $3.7M

Real estate development firm Central Southwest Texas Development LLC (CSTD) intends to build a five-story self-storage facility in the Westchase area of Houston. The property at 10411 Westheimer Road will comprise 132,350 square feet in 1,311 units, according to a press release from JLL Capital Markets, the commercial real estate and finance firm that helped secure construction financing.

The Westchase submarket is a business district surrounded by dense, affluent residential neighborhoods including Briar Forest, Briar Meadow and Memorial Villages. The average annual household income within a three-mile radius of the storage site is more than $91,000. The population within the radius is about 200,000 and expected to grow 5.7 percent during the next five years, the release stated.

Near the intersection of Beltway 8 and Westheimer Road, the property is visible to more than 131,000 vehicles traveling along the Beltway each day.

Griffin Guthneck, senior vice president, and CW Sheehan, vice president, led the JLL team in securing a floating-rate construction loan.

Based in Austin, Texas, and founded in 2004, CSTD is a commercial real estate development and investment company. The firm’s leadership has more than 90 years of combined experience in the real estate industry and has completed more than 85 real estate projects with a combined market value of more than $450 million.

JLL is a full-service global provider of capital solutions for real estate investors and occupiers. The firm completed $170 billion in investment sale and debt and equity transactions globally in 2017. The firm’s capital-markets team comprises more than 2,000 specialists globally.

Phoenix-based U-Haul International Inc., which operates more than 1,500 self-storage facilities across North America, has acquired two neighboring Sunny’s Self Storage facilities in Newfield, N.Y. Together, the properties at 1273 and 1399 W. Danby Road contain 419 units. They offer climate-controlled units, moving and packing supplies, and trailer and truck rentals. U-Haul Moving & Storage of Newfield will be operated remotely by U-Haul of Ithaca, according to a press release.

“These locations are close to Ithaca College and Cornell University, and are convenient for our customers in the Finger Lakes region,” said Andrew Sciortino, president of the U-Haul Co. of North Central New York. “We will be able to save our customers time and money while providing a clean, secure and well-maintained environment for their possessions to be stowed.”

U-Haul recently purchased a newly built facility in Glendale, Ariz., for $10.05 million. The property opened in May and comprises 80,000 square feet of space in 784 units.

Established in 1945, U-Haul owns more than 32 million square feet of storage space. The company’s corporate sustainability initiatives, which support infill development to help local communities lower their carbon footprint, has led to dozens of conversion projects in recent years.

Source:
Benzinga, U-Haul Now Operating at Two Former Sunny's Self Storage Facilities in Newfield

Stor-Age Property REIT, which operates self-storage facilities in South Africa and the United Kingdom, grew its quarterly dividend 9.1 percent during the sixth-month period that ended on Sept. 30, to 51.3 cents per share. The growth was the third highest among property-focused stocks on the Johannesburg Stock Exchange (JSE) during the period, according to the source.

Stor-Age was topped only by industrial-warehouse company Equites Property Fund (EPF) and retail-property owner Fairvest. EPF reported an 11.7 percent increase in its dividend to August, while Fairvest had a 9.9 percent bump to June. All three companies have at least 80 percent of their assets in South Africa, the source reported.

“This performance outstripped the JSE property sector in which dividend growth has been severely curtailed by weak economic growth, which has led to growing vacancies at a number of properties held by listed funds,” said Gavin Lucas, Stor-Age CEO.

Stor-Age expects to have up to 10 percent distribution growth for its full fiscal year, which ends on March 31, 2019.

Lawrence Koikoi, an analyst with South Africa-based asset manager Stanlib, indicated Stor-Age’s success during the economic downturn was due to sound operational philosophy. “Like-for-like net property income growth of 9.8 percent off a high base from previous periods seems to indicate that the business model is proving itself as counter cyclical compared to traditional office, industrial and retail subsectors," he told the source.

Headquartered in Cape Town, Stor-Age was established in 2005 by Stor-Age Property Holdings Pty. Ltd. to acquire, develop and manage self-storage assets. Today, Stor-Age operates a 63-property portfolio, primarily in four South African metropolitan areas, that comprise approximately 414,000 square meters. It also has 10 projects under development. The company was listed on the Johannesburg Stock Exchange in November 2015. It acquired the U.K. Storage King portfolio in 2017.

Source:
BusinessDay, Self-Storage Puts Stor-Age Among Top Three Property Industry Performers