“You never get a second chance to make a first impression”
—Will Rogers

The first impression people get when they pass by your self-storage facility can either entice them to come back or encourage them to go elsewhere. While this holds true for most businesses, self-storage is unique. Our prospective customers aren’t just looking for an oil change or cup of coffee; they’re looking for a nice, clean, secure place worthy of holding their belongings.

A property with overgrown weeds, peeling paint, and faded signs or banners sends the wrong message. We facility managers pass the driveways and front yards of our sites every day, so we may not notice some of these things anymore, but others do. As an exercise, I sometimes imagine my bosses just pulled up for a surprise visit. What would they think of my property in its current condition?

Here are some tips to help keep your self-storage facility’s curb appeal looking fresh and inviting.

Signage

Keep signage clean, clear and up-to-date. Refresh your main sign with paint, Armor All, Windex, etc. to keep it looking new. If you have a message board or electronic scrolling banner, change the message often; but keep it short so it’s not a complete distraction to passing drivers. A cluttered sign with too much information may actually be a bad thing. Stick to your facility name, street address (the number, at least) and phone number.

If your local ordinances allow for sale banners, lawn flags or other temporary signage, plan to change them a few times a year. Reds fade to pink and warm tones fade to blue. Damaged, old, ripped or faded signs don’t look the part for your business. Keep spares on hand of whatever flags you’re flying, including those for the country, state, city and company. Storm winds and summer sun can really do some damage, so switch out items as they become faded or ripped. Any issues with your signage should be addressed as soon as your budget and time allow.

Landscaping

Exposed buildings need to be free of branches, vines and other foliage. Trees and shrubs should be tidy and pruned. Landscaping that uses pine straw or mulch should be kept fresh. Inexpensive up-lighting is easier to install than you’d think nowadays, especially with “plug and play” solar-powered LED fixtures. This not only looks really cool at night, it helps add to the security of your facility.

Your front yard, entryway (turn-in lane) and driveway should be free of debris and weeds. If you’re next to a busy main road, this can be an everyday task. Water bottles, soda cans, coffee cups, food wrappers and other waste can build up quickly, so look around every morning as you pull into the property and then grab your trash bucket.

Frontage

Parking lots are often overlooked, but they’re one of your first “welcome mats.” Make sure your lot is clean, and free of trash and cigarette butts. Marker lines should be clear and bright, and any handicap spots should be clearly marked. Painted curbs should be touched up as needed for safety. Powerwash sidewalks, canopies and entrance areas a few times per year.

If your facility has a move-in truck or offers truck rentals, leave one of the vehicles out front during business hours as an additional “billboard,” then secure it behind the gate at the end of the day. This is recommended only if your facility’s parking situation allows it because you don’t want to inconvenience any current or future tenants by taking up needed space.

Rental Office Exterior

The area outside the rental office is also as important. It should be treated the same as your front yard and exposed buildings, particularly where shrubs, plants, vines and trash are concerned. The difference is you can have some fun with the details here.

Flowers are always a welcome sight. Your landscaper should have ideas as to what plants and flowers will do well in your area without too much hassle. Perennials with a long bloom time or that bloom at different times of year can help reduce costs. Hanging plants are a nice touch as well if they don’t impede entry (think about tall customers).

If you have benches, chairs or porch swings on your patio, keep them clean and in safe working order. Clean sidewalks and windows and working light fixtures continue the positive first impression right up to your front door. You’ll need sweep the lights every so often with a broom to remove the cobwebs and bugs that congregate there.

Your front door and office are your last lines of defense. Clean, fresh paint, sparkling windows and oiled hinges (squeaky doors are the worst!) are in order. If you’re a member of the local chamber of commerce, national and state self-storage association, or other local organizations, display the current stickers on the door, just to brighten things up a bit. Decals that are more than a year or two old should be removed.

Rental Office Interior

Inside the office, less is more. Reduce clutter on countertops and desks so you look organized. Replace faded artwork and keep framed awards and letters straight and level.

Try to keep food odors down, too. Remove that pizza box or leftover Chinese takeout right away and get it to the dumpster so the smells don’t linger. A vacuum pump, Air-Pot or Thermos-type of vessel for brewed coffee will help keep the office from smelling like burnt coffee all day.

Clean the office space regularly. Wipe counters with cleansing wipes, and mop floors often, even if it’s with one of those little spray-type mops just for touch-ups (they smell good, too). Vacuum carpets, and don’t overlook furniture. For leather or vinyl, use automotive cleaners like Armor All. For fabric, use a carpet cleaner (spray or foam), and then vacuum.

Behind the Curtain

Curb appeal doesn’t necessarily stop at the entry and office areas. If there are any other places on your property that can be seen from the road or are visible while showing prospective tenants around, these should be on your list for cleaning and maintenance. After all, you don’t want any customers to look “behind the curtain” and see a mess.

It doesn’t hurt to have a friend or relative stop by and look around with fresh eyes and maybe a camera. Since you see the place every day, some things may not be as obvious to you as to a stranger, so have them tell you what they think you missed.

Curb appeal doesn’t have to be expensive. You just need to keep your property maintained, clean and organized. This effort should generate an interest in your business and project your company’s image and policies—safe, secure, clean, good value, well-maintained, etc.—without being too busy or visually overwhelming. If your property needs a spruce-up, it won’t get fixed overnight; but if you set a routine and tackle a little at a time between other tasks, you should be able to get your curb appeal under control and looking like the day you opened, if not better!

Kevin J. Edwards joined Southeast Management Co. in 2016. He and his wife, Donna, are property managers for Plantation Storage and Plantation Wine Cellars in Bluffton, S.C. To reach him, call 843.815.8000; e-mail [email protected]; visit www.southeastmanagementcompany.com. 

A new The Vault Self Storage location has opened in Rock Hill, S.C. Owned by Scott Wilson of The Vault Rock Hill LLC, the property at 144 Rawlinson Road comprises 70,275 rentable square feet in 520 climate-controlled and drive-up units. Features include 24-hour access, vehicle storage and a retail center that sells moving and packing supplies.

The facility is near Carolina Fresh Farms, Old Pointe Elementary School and Rock Hill Aquatics Center. It’s also close to South Carolina Highway 161 and less than four miles from multi-family complexes Deerfield Apartments, The Villas at Garden Way and Yorktowne Village.

The property will be managed by Absolute Storage Management, a self-storage owner and property-management firm. Founded in 2002, the company operates 116 properties in 14 states. Headquartered in Memphis, Tenn., it has regional offices in Atlanta; Charlotte, N.C.; Jackson, Miss.; and Nashville, Tenn.

The Vault also operates a facility in Lake Wylie, S.C.

 

Sparkplug Capital LLC, which operates self-storage properties under the Red Dot Storage brand, has acquired four self-storage facilities in Illinois, Kansas and Kentucky. The properties comprise a combined 125,174 square feet in 1,018 storage units, according to a press release.

The facilities are:

• 4 Your Stuff Storage at 3117 W. Chain of Rocks Road in Granite City, Ill. The facility comprises 67,869 rentable square feet in 404 units.
• Arrowhead Mini Storage at 3429 W. 8th St. N. in Wichita, Kan. The 16,405-square-foot property offers 223 units.
• Bellefonte Storage in Ashland, Ky. The property at 103 Jane Hill Road comprises 21,150 rentable square feet in 225 units.
• Vail Avenue Storage at 2227 N.W. Vail Ave. in Topeka, Kan. The facility offers 19,750 rentable square feet in 166 units.

Red Dot plans to upgrade the facilities with new access-control systems, asphalt repairs, LED lighting and video cameras. In addition, a 24-hour rental center will be added to each site.

“We are thrilled about our continued growth and are looking forward to providing the Red Dot Storage experience to even more customers,” said Seth Bent, CEO.

The deals come less than a month after Red Dot acquired three facilities in Kansas and one in Louisiana.

Based in Boulder, Colo., Sparkplug launched Red Dot in 2013. It operates 131 self-storage facilities in 15 states. Its portfolio comprises more than 5.1 million net rentable square feet.

Mequity Acquisitions LLC, an affiliate of real estate developer Mequity Cos., is under agreement to acquire the Hot Skates roller rink in Lynbrook, N.Y., as long as the city greenlights its plans to develop a self-storage facility on the site. The company intends to demolish the building at 14 Merrick Road and replace it with a 128,000-square-foot structure. If approved, construction is expected to begin in mid-2019 and be complete in 2020, according to the source.

The storage facility would be designed to resemble an office building, and the site would feature landscaping to “soften up the look,” Brian Stanton, building department superintendent, told the source. The property would be branded as CubeSmart, a self-storage real estate investment trust and third-party management firm.

“We’re excited to be coming into the Lynbrook market,” said Bill Marsh, CEO of Mequity. “The market in Lynbrook and the surrounding villages is underserved with a high-quality, climate-controlled storage product, so we believe that we’ll be fulfilling a need.”

Village officials appear to favor the project, though Mequity still needs to submit information to the building department, public works and Nassau County Fire Marshal. Mayor Alan Beach is among those championing the development, in part due to an expected increase in tax revenue.

“I’m happy something is going to go there that is going to be very neat and clean,” Beach told the source. “It’s a beautiful building, and I don’t see any strain on the community with having a storage facility there. It’s out of the way. I think it’s a good location.”

Some residents disagree with the mayor’s assessment, calling for another skating rink, sports facility or related use that would provide activities for children. “How many storage facilities do we need?” resident Jeff Esposito wrote in a survey response to the source. “How about the village buys it and builds a mixed-use indoor sporting facility, so we have more winter activities for our children? Indoor soccer, hockey.”

Hot Skates has served the community since the 1980s, though owner Rochelle Bernstein has planned to close the business for several years, according to the source. The site has been used as a filming location for several productions including television series “The Bachelorette,” “Kevin Can Wait,” and “Unbreakable Kimmy Schmidt.”

Atlanta-based Mequity is an investment firm focused on the self-storage industry. The company has closed more than $100 million in facility development in 2017 and 2018. Its primary markets include the Atlanta, Miami, New York and Washington, D.C., metropolitan areas as well as Northern New Jersey. Its principals are Marsh and Robert Holly.

Source:
LI Herald, Lynbrook's Hot Skates to Be Converted Into Storage Facility

Ever heard this question during a job interview: “What your strengths?” Or how about this one, “Where do you see yourself in five years?” It’s time to retire these outdated questions and introduce thought-provoking ones that’ll give you better insight into what kind of employee your candidate will truly be.

In a recent thread on Self-Storage Talk, the industry’s largest online community, operators share the go-to questions they’ve posed to potential new hires or memorable ones they’ve been asked during a job interview. What inspiring queries can you add to this staffing-related thread?

Strategic Storage Growth Trust Inc. (SSGT), a public, non-traded, self-storage real estate investment trust (REIT) sponsored by SmartStop Asset Management LLC, has acquired a newly constructed storage facility in Las Vegas. The property at 6888 N. Hualapai Way comprises 73,000 square feet in 569 units, according to a press release.

The site includes computerized gate and lobby access, drive-up and air-cooled units, elevators, perimeter fencing, LED lighting, wide driveways, and video cameras.

"This facility is located adjacent to the Bruce Woodbury Beltway in Northwest Las Vegas and next to a newly built grocery-anchored retail center," said Wayne Johnson, chief investment officer. "The property is one of our Certificate-of-Occupancy transactions we have underway, and we believe is well-suited for our portfolio."

The SSGT portfolio includes 28 self-storage facilities in Canada and the United States comprising approximately 2.1 million net rentable square feet in 19,000 units. The REIT is sponsored by SmartStop, a diversified real estate company with a managed portfolio of 126 self-storage facilities in Canada and the United States. Its managed properties comprise approximately 9.3 million rentable square feet.

Source:
PR Newswire, Strategic Storage Growth Trust Inc. Acquires Newly Constructed Self Storage Facility Near Las Vegas Beltway

Update 11/12/18 – Smart Storage of Altrincham, England, has joined more than a dozen self-storage operators participating in the “Wave of Gratitude” campaign nationwide. The company recently hung a 13-foot banner on the side of the building to celebrate the role women played in World War I. It’ll adorn the structure on Craven Road until Armistice Day, according to the source.

An unveiling ceremony included participation from local veteran Vince Hastings and members of the Royal British Legion. “Using our forklift and cage, we have hung the enormous banner down the center of our building right above our trade counters, so it will be seen by everyone passing by on the busy Craven Road,” said facility manager Emma Greenwood. "We are so proud to celebrate the role that many local women played in the war.”

“We were struck by how few women were remembered in the history books, even though they formed the backbone of the war effort. From making ammunition to serving at the front, they showed such courage, determination and resilience,” added Rennie Schafer, CEO of SSA-UK. "When we appealed for local stories, we were extremely touched by the memories people shared. Many of these personal accounts will be posted on our website leading up to Remembrance Sunday. We would like to take this opportunity to thank everyone who came forward to honor their female family members.”

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8/8/18 – Two more English self-storage operators are participating in the nationwide “Wave of Gratitude” campaign. Armadillo Self Storage of Newcastle upon Tyneside and St. Neots Self Store of Cambridgeshire are asking the public for inspiring accounts about women who served their respective communities during World War I. One story from each community will be imprinted on a banner to be displayed at their respective locations.

“We are appealing for people to come forward to tell us about their grandmothers and great-grandmothers who played a part in World War One,” said David Griffith-Owen of Armadillo. “We will be commemorating them all across social media, and 33 faces will be chosen for banners to be displayed around the country for 100 days—each day representing a year since the end of the Great War.”

“It is no secret that women formed the backbone of the war effort during the 1914-18 Great War. From making ammunition to serving at the front, their courage, determination and resilience kept together a nation torn apart by war,” added Emma Chesterton Kay, a board member for the Self Storage Association of the United Kingdom (SSA-UK). “We hope that this initiative will acknowledge and celebrate the lives of these extraordinary women.”

Jim Williams, general manager of St. Neots Self Store, said his great-grandmother, Daisy, worked in a munitions factory in East London during the war. “It is a privilege for us to act as a gateway for local people to share memories of past local female heroes, and we are proud to work with other members of the Self Storage Association UK to collectively keep their histories alive.”

Armadillo is a member of the Big Yellow Group PLC family of storage properties, which operates 97 locations in the United Kingdom, with most concentrated in Greater London. Its total portfolio comprises 5.6 million square feet.

The recently opened St. Neots Self Store also serves the community of Bedfordshire. The property is the only purpose-built self-storage facility in the city, according to the operator’s website. Offerings include 24-hour access, business and personal storage, and shredding services.

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7/19/18 – Storage King of Dudley, England, is participating in the nationwide “Wave of Gratitude” campaign, which celebrates women who contributed to their communities during World War I. The company is seeking stories about local heroines. The names of the most inspiring will be added to a banner that will hang from the facility at Unit 8 Ionic Park on Birmingham New Road. The campaign starts next month and will run for 100 days, concluding on Armistice Day, according to the source.

“World War I altered women’s status in Britain forever. Women like Lilian Hodgkiss, who worked in the local munitions factory here in Dudley, fearlessly assumed roles previously reserved for men throughout the hostilities,” said Rachel Cornaby, manager of the Dudley store. “Each and every one of them helped win a war with their courage, hard work and resolve. They have changed the future for all generations of women and should never be forgotten. We are proud to be a part of this national campaign to bring these amazing women into the spotlight.”

Wave of Gratitude is part of The Royal British Legion’s “Thank You” campaign to commemorate the centenary of World War I. “One of our key ambitions this year is to highlight the contribution of the whole first-world-war generation,” said Catherine Davies, head of remembrance at The Royal British Legion. “Women played an utterly essential role in the war effort, seizing the opportunity to prove their worth and take another step toward getting the vote. Each and every one of them deserves our thanks.”

Nominations for the campaign can be sent to [email protected].

The Storage King portfolio includes 13 owned facilities and 12 properties under licensing and management agreements, primarily in Southeast England. It comprises about 577,000 gross leasable square feet. The portfolio was acquired last year by Stor-Age Property REIT, which operates the Stor-Age Self Storage brand in South Africa.

Sources: 
Messenger, First World War Veteran Unveils 13ft Remembrance Banner
Dudley News, Forgotten Women of WWI to Be Remembered
The Hunts Post, Women’s First World War Stories Sought for St Neots Banner
Chronicle Live, Remembering the Lost Stories of Tyneside Women in World War I

Strategic Storage Trust IV Inc. (SST IV), a public non-traded real estate investment trust (REIT) sponsored by SmartStop Asset Management LLC, has acquired another Metro Mini Storage location in Houston. The REIT purchased a six-property portfolio in Greater Houston and College Station, Texas, from Metro Mini last month.

Situated on 3.66 acres, the facility at 8415 Queenston Blvd. was constructed in 2007. It comprises 63,000 net rentable square feet in 540 climate-controlled and drive-up units. The facility also contains four vehicle-storage spaces, according to a press release.

“This facility is located in the fast-growing Northwest Houston submarket and is surrounded by established residential communities,” said Wayne Johnson, chief investment officer for SST IV.

The seller was represented in the transaction by John Fenoglio and Nick Walker, both executive vice presidents for commercial real estate firm CBRE Group Inc. Headquartered in Los Angeles, the company offers advice and execution for appraisal and valuation, corporate services, development service, investment management, and consulting.

Based in Maryland, SST IV owns 14 self-storage properties comprising just over 1 million net rentable square feet in 8,400 units. It intends to invest in self-storage properties in Canada and the United States.

SmartStop is the asset manager for 126 facilities in Canada and the U.S. Its portfolio comprises approximately 9.3 million rentable square feet.

 

The William Warren Group (WWG), a privately held real estate company that operates the StorQuest Self Storage brand, is developing a four-story facility in Hawthorne, Calif. The in-fill development site at 4959 W. 147th St. is near Los Angeles International Airport and visible from Interstate 405. Once complete, the structure will comprise 113,625 net rentable square feet, according to the source.

The $20 million construction loan was negotiated by Talonvest Capital Inc., a boutique self-storage and commercial real estate advisor. The team members involved in the deal include Kim Bishop, Jim Davies, Tom Sherlock and Eric Snyder.

WWG has been actively growing its portfolio this year. It opened a new facility in Gardena, Calif., last spring as well as one in Vero Beach, Fla., its first in the city, in February.

Founded in 1994 and based in Santa Monica, Calif., WWG acquires, develops and operates more than 125 self-storage facilities in Arizona, California, Colorado, Florida, Hawaii, South Carolina and Texas.

Source:
Financial Buzz, Talonvest Successfully Negotiates $48 Million of Construction Loans

Self-storage financing is beginning to feel a little different these days. There’s no denying the industry has enjoyed an outstanding run for several years, fueled by strong occupancies, year-over-year revenue increases, strong valuations and investor demand. There’s also been plentiful availability of debt at low interest rates. The problem is some of these factors have started to plateau.

Specifically, interest rates are now on the rise, and an increased supply of facilities has created rental-pricing pressure in some submarkets. This will have a direct impact on your ability to borrow money.

Upward Pressure

In a way, we’ve been lulled into a comfort zone during the past few years thanks to low interest rates and only incremental movement by the Federal Reserve when it’s made policy changes. Further, the economy has been humming along with the lowest unemployment levels in nearly 50 years; the Dow Jones has bumped against new highs; and the federal government has provided fuel to extend the recovery from the 2008 financial crisis.

But don’t get too comfortable. These factors are really just precursors for interest rates returning to more normalized (i.e., historically higher) levels. As of early October, the Fed had raised the Federal Funds Target Rate (FFTR) three times in 2018, with an additional rate hike likely before year-end.

Lenders base loan rates on a spread over various indices. The accompanying table highlights rate increases for several commonly used indices, including a recent 30-day period, year over year, and the past three years.

Historically, the 30-day LIBOR and prime rate are highly correlated to FFTR movement. So, as the Fed continues with incremental bumps, you’ll see these rates move accordingly.

Short- and long-term Treasury yields are based on many factors and aren’t linear relative to FFTR adjustments. Looking at the table you’ll notice shorter-duration bond rates increase at a faster clip than longer-term bond options. Thus, we’re inching closer to a flattening yield curve in which short-term loans will pay interest rates equal to, or even above, longer-term loans.

Good News, Bad News

It’s always better to start with the good news. While rising indices mean loan rates are on the rise, a positive takeaway is spreads have remained neutral or slightly decreased. This has softened the increase in resulting mortgage interest rates.

Further, stretching back to the fourth quarter of 2015, the Fed target rate, 30-day LIBOR and prime rate, which are typically used for variable-rate loans, have increased approximately 2 percent. At the same time, the longer-term 10-year Treasury yield, which is tied to fixed-rate financing, has inched up only about 1 percent.

When factoring in spreads over the indices, many variable-rate loans tied to the prime rate and LIBOR that had lower overall interest rates compared to five- or 10-year fixed-rate loans are now actually higher and will continue to climb as the Fed further increases the target rate. Nearly all construction loans are variable-rate and will be affected by these changes.

Now for the bad news. Higher interest rates cause debt-service payments to rise and put additional stress on debt-service coverage (DSC). This means the availability of maximum loan dollars decreases because minimum DSC is needed to meet the lender’s requirement covenants.

The minimum DSC constraint—usually between 1.2 percent and 1.3 percent (calculated by net operating income divided by debt payment)—may result in loan proceeds at a lower loan-to-value (LTV) ratio. This is particularly applicable in markets where properties are valued on relatively low capitalization (cap) rates. For example, buyers seeking 75 percent LTV leverage should know that greater equity may be required for their next purchase.

Development and Construction Financing

When capital was tight and only a few lenders offered financing, virtually no new storage facilities were constructed between 2009 and 2012. Once capital became readily available from debt markets and investors, new developments started tracking at record levels in 2016. A record $9.39 billion was invested in self-storage from January 2016 through August 2018, according to U.S. Census data. During the same period, 1,858 facilities opened nationwide, Union Realtime figures show.

Despite these recent development and construction surges, self-storage remains a micro-market industry, and it’s impossible to categorically state that an entire Metropolitan Statistical Area (MSA) or market is overbuilt.

Most new storage developments, particularly larger, multi-story properties, have occurred in the top 50 MSAs. Given pent-up consumer demand, many of these projects leased up more quickly than projected. However, as we get further into the development cycle, lease-up is now taking longer than expected, requiring many operators to offer discounted introductory rates to attract renters.

In many cases, the lead time for finding a site, planning, entitlement and permitting is lengthy. And as we experience a market shift, project assumptions from 24 months ago are likely quite different today in relation to construction and financing costs, lease-up rates, and stabilization projections. Some projects simply may not pencil out any longer to attain a developer’s anticipated return on investment.

How Lenders View New Projects

There are still many lenders who will provide construction financing for new projects. Key for them is the sponsor’s strength and experience, as well as the development’s feasibility and underlying economics. No two lenders will underwrite a deal in exactly the same way, but a common element to transactions being written is if they believe there’ll be take-out or permanent financing at stabilization.

Accordingly, lenders will take assumed stabilized NOI and conduct a stress test with criteria that typically include a 25-year amortization, a 6.5 percent (plus or minus) interest rate, and a DSC ratio of 1.3 or better. Given today’s market conditions, don’t assume they’ll consider pro forma rent increases. On the contrary, they may apply a discount to rental rates.

Financing Existing Facilities

An existing property’s historic performance is the primary determinant in the loan amount and terms. Lenders also consider new competitors, including those in the supply pipeline. If new competition has put downward pressure on street rates and monthly revenue, lenders will likely be less aggressive with loan proceeds.

It’s also imperative to work with a lender or mortgage broker who understands the unique dynamics and economics of self-storage. You don’t want to go down the road with a lender who’ll have the underwriter apply current, lower street rents to existing customers, as facility operators often implement price increases to existing tenants, even as street rents decrease.

Planning Ahead

It’s always good to stay ahead of the curve. With interest rates inching upward and new-supply market pressures affecting so many locales, here are a few financing tips to consider:

• Look to switch from variable- to fixed-rate financing.
• Refinance sooner rather than later. Lock in a lower interest rate and maximize loan proceeds.
• For maximum loan proceeds, seek lenders that offer longer amortization or interest-only periods.
• Seek loan quotes on acquisitions early in the process so you’re not surprised by equity requirements to close.
• Re-evaluate development economics for projects in the pipeline; err on the side of being conservative.

The best news is there are plenty of capital providers aggressively seeking to lend to self-storage owners and developers. Just be mindful that they can’t control interest rates or new supply.

With more than 25 years of experience as a national self-storage mortgage broker and advisor, Neal Gussis is a principal at mortgage-banking firm CCM Commercial Mortgage. He specializes in securing debt and equity for self-storage owners nationwide. He can be reached at 224.938.9419; e-mail [email protected]; visit www.ccmfinancing.com.