Stor-All Acquisitions LLC, an affiliate of Stor-All Storage, has acquired a Palm Beach Gardens, Fla., public-works building for $3.8 million with the intent to convert it to self-storage. The company outbid two other offers for the property at 3704 Burns Road, including one from another self-storage operator, according to the source.

The city will have until July to vacate the premises. It’s scheduled to complete its new operation center by June, which will house public works, public services and emergency-management staff and equipment. The $6.7 million project is being funded through a penny sales-tax increase, the source reported.

Funds from the Stor-All acquisition will be used toward capital-improvement projects, including a $3.5 million tennis center.

Others submitting bids on the property were Channing Corp. and the village of North Palm Beach. All the offers exceeded the property’s $2.26 million appraised value, according to the source. Channing owns Store Self Storage & Wine Storage on N. Military Trail in Palm Beach Gardens, where the city holds its summer GreenMarket event.

Founded in 1967 and based in Deerfield Beach, Fla., Stor-All draws it roots from a construction company founded by brothers Norman and Robert Anderson. Its national portfolio was sold to self-storage real estate investment trust Public Storage Inc. for $430 million in 2013. The 44-property portfolio included facilities in five states and encompassed 2.7 million square feet in more than 26,300 units.

Source:
The Palm Beach Post, Palm Beach Gardens OKs Property Sale to Storage Company for $3.8M

Demographic and economic factors across Asia are making self-storage more popular with local consumers and investors. Living space has shrunk across the continent as urban populations have densified, increasing the need for storage space. At the same time, high rental rates are driving real estate value, making self-storage attractive to investors and developers, according to Asia Asset Management, a news site specializing in investments and pensions.

“Storage is gaining increased recognition in Asia as populations mobilize and living spaces shrink,” wrote Skip Schwartz, managing director of Asia-Pacific private equity at global real estate investment-management firm Heitman LLC. “The sector’s low saturation, healthy yield premiums over traditional assets, and growing institutionalization are contributing to its transformation into a key component of smart portfolio construction.”

While there’s only .5 square feet of self-storage space available per person even in the most saturated markets, population density continues to increase in cities like Hong Kong, Seoul, Singapore and Tokyo. For example, Tokyo’s population has increased 15 percent since 2000, while Singapore’s has jumped 45 percent during the same period, according to government statistics.

Traditional consumer drivers like death, divorce and moving, as well as commercial-business needs, are expected to push self-storage demand and rental rates in urban markets due to low supply. “Asia’s swiftly ageing populations and changing cultural norms should support demand for self-storage,” Schwartz said. “As young professionals increasingly choose to live in and around urban centers, they will need space to keep important household items as their parents pass on or enter aged care facilities. More relaxed attitudes toward divorce and cohabitation also promote mobility, ultimately increasing the need for self-storage.”

High demand coupled with low supply means high rental rates, including some markets that average two to three times more per square foot for self-storage than for apartments or industrial rentals, according to Schwartz. That dynamic is driving development demand, despite the low availability of available land. “This makes conversion from both warehouses and smaller-scale residential plots attractive,” Schwartz wrote. “In fact, self-storage rents rival those of B-grade offices in some Asian cities, offering potentially lucrative cash income from underutilized land.”

Strong cash flow achieved by operators has helped increase real estate value and drive investor interest. Capitalization rates for self-storage properties in Singapore and Tokyo are estimated at 7 percent and 6 percent, respectively, “implying premiums easily over 200 basis points to traditional assets in both markets,” Schwartz said. “We expect yield spreads to compress as the sector matures and attracts more institutional capital, like in North America and Europe.”

Founded in 1966, Heitman has approximately $43.5 billion in assets under management. It first invested in self-storage in 1996 in North America and today has completed or committed to 35 self-storage investments across Asia, Europe and the United States. The total capitalization of its self-storage investments exceeds $9 billion, according to Schwartz.

Source:
Asia Asset Management, Demographics, Fundamentals Buoy Self-Storage Prospects in Asia Pacific

Real estate developer Mequity Cos. has purchased a warehouse in Tucker, Ga., for $5.3 million that it intends to convert to a climate-controlled self-storage facility. The site will be managed by real estate investment trust CubeSmart and branded under its name. It’s expected to be complete by the end of the year, according to the source.

The 105,800-square-foot warehouse at 2232 Mountain Industrial Blvd. is in the Stone Mountain Industrial Park, a 4.1-million-square-foot, master-planned business park comprising 69 buildings. The seller, Ackerman & Co., acquired the property in 2015, the source reported.

The seller was represented in the transaction by Brett Buckner, senior vice president, Major Martin, associate, and Jimmy Stevens, senior vice president of brokerage, for Ackerman.

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 Bill Marsh and Robert Holly.

Source:
Rebusiness Online, Ackerman Sells 105,800 SF Warehouse in Metro Atlanta for $5.3M, Buyer Planning Self-Storage Conversion

It may sometimes feel as though managing a self-storage facility is like watching a daytime soap opera. Every customer has a story that’s led him to your property. Storage needs are often born from life-changing events, and tenant drama can spill into your business once the lease is signed.

The three customer-related plot twists you most often have to deal with are tenant death, divorce and disappearance. Each scenario poses challenges and legal consequences if incorrectly handled. Let’s examine all three to understand what you should do in instances like these.

Tenant Death

Unfortunately, it’s not uncommon for a self-storage operator to learn a tenant has passed away. Often, this is discovered when the rent hasn’t been paid and late or lien notices are sent to the tenant’s last-known address.

When a death occurs, relatives and friends may come forward to retrieve property from the deceased’s unit. There are a few scenarios that can play out under these circumstances. Depending on the facts, you have options for how to respond.

If you’ve learned of the tenant’s death by some means other than a family member, try to reach the emergency contacts listed on the rental agreement. I also recommend you contact the local probate court to see if the tenant’s estate has been probated and an executor named. If there’s an executor, you can contact him to determine what to do with the unit.

If you’re unsuccessful in reaching those listed on the rental agreement or any relatives or friends willing to resolve the tenant’s default, you may then send a Certified letter to the tenant’s last-known address and proceed with the foreclosure process. Depending on where your facility is located, there may be a waiting period to allow the estate to be probated before the lien sale can occur.

If a family member appears onsite with the access code and keys to the unit (meaning no action is needed from you for him to enter the space), he can access the unit and remove contents. This is analogous to any rental property. A family member or friend with access rights doesn’t immediately lose them when the tenant dies. However, it’s important to clarify that this permitted access only applies when the manager isn’t involved in providing gate-code access or cutting the lock. If a person doesn’t have authorized access, you can’t allow him to enter.

During this time, a family member must continue to pay rent on the deceased tenant’s unit to avoid foreclosure. To gain access, he’ll have to provide you with a copy of the death certificate and a court order stating he’s been appointed administrator or executor of the estate. This process can be quick or sometimes take up to 60 days. Once the family member provides you with these documents, he can access the unit. Then he can decide whether to continue renting in the name of the tenant’s estate or terminate the rental agreement and removing the contents.

If the deceased tenant had a small estate value ($15,000 to $150,000, depending on the state), the family may be able to obtain and prepare a small estate affidavit or process the estate through a summary administration. A small estate affidavit is a sworn document signed by the family member that states the amount of the deceased’s estate is so low it isn’t going to be probated through the court. Once you have this document, you can give the person access to the unit.

You need to keep in mind a few basic issues. Most important, just because a tenant dies doesn’t mean his obligations to creditors cease. Someone must pay rent on the storage unit or it’ll eventually go into foreclosure. But, once you learn a tenant has died, it makes sense to do whatever you can through phone calls, letters and even personal visits to the local probate court to see if anyone has stepped forward to take over the estate. This is especially true before proceeding with a sale. Lastly, if a resolution is being attempted, you should delay any enforcement of your lien rights since the estate process can sometimes take weeks to complete.

Tenant Divorce

Self-storage seems to be a place where property subject to a divorce commonly ends up. If one spouse rents a unit to store property from the marriage, does the other spouse have a right to access it?

Typically, a storage operator doesn’t care who has the right to the property in a unit, so long as the rent is current and the party entering has the proper access code and key to the lock. However, divorce often puts managers in the middle, especially when the tenant disputes the non-tenant spouse’s right to gain access. In these cases, it’s always best to defer judgment to the courts.

When two parties divorce, they automatically subject themselves to the jurisdiction of the court to handle the dissolution of the marriage and the separation of assets. This includes property that may be stored at a self-storage facility. Accordingly, you must follow all instructions issued by a court concerning the turnover of property from one spouse to another. However, not all court orders are written with clear instructions. Therefore, you shouldn’t seek to interpret any court decisions that may or may not apply to your facility. Any questions should be directed to the counsel representing the respective spouses or the storage business.

In other words, don’t get involved in the dispute. One way to avoid this risk is to ensure you have only one designated tenant on the lease, not co-tenants. If you allow co-tenants, you won’t be able to avoid being caught between the two since each has tenancy rights and rights of access.

Tenant Disappearance

Disappearance occurs when a tenant who has been present, communicating and paying the rent suddenly stops and is no longer heard or seen. You may never know the reason why. It could be due to death, incarceration, incapacitation or a conscious decision to forego the stored goods, perhaps due to an inability to pay rent.

Typically, when a disappearance occurs, the unit will go into lien status and eventually sold. However, in some circumstances, the tenant will remove some unit contents prior to disappearing, abandoning the rest and leaving no lock on the space. If this happens, instead of the unit going to lien, it may be considered abandoned. An example of a lease abandonment provision is as follows:  

Abandonment: this Agreement shall automatically terminate if the Occupant abandons the Space. The Occupant shall be deemed to have abandoned the Space if the Occupant has removed the contents of the Space and/or has removed the locking device from the Space. Rent prepaid for any period in which the Occupant moves out early shall not be refunded. Abandonment shall allow the Owner to remove all contents of the Space for disposal. Occupant hereby waives and releases any claims or actions against Owner for disposal of personal property resulting from Occupant’s abandonment. Occupant shall be responsible for paying all costs incurred by Owner in disposing of such property.

Keep in mind that determining if a unit has been abandoned can be a guessing game. Sometimes it’s better to rely on the lien law to dispose of the contents. Depending on your state statute, you should seek to contact the tenant before proceeding with a sale. During this time, you may discover the reason for his disappearance. It’s always up to the facility operator, based on the facts presented, whether it’s prudent to proceed with the lien.

Whether death, divorce or disappearance has occurred, it’s important to recognize that each presents challenges and obligations. Understanding how to handle each properly, in accordance with your state law, will mitigate risk to the business and keep the tenant plot lines at your facility predictable, instead of manifesting into a soap opera.

Scott Zucker is a partner in the law firm Weissmann Zucker Euster Morochnik & Garber P.C. in Atlanta, which specializes in business litigation with an emphasis on real estate, landlord-tenant and construction law. He’s a frequent speaker at self-storage industry events, author of “Legal Topics in Self Storage: A Sourcebook for Owners and Managers,” first and second editions, and a partner in the Self Storage Legal Network, a subscription-based legal service for storage owners and managers. He’s also the deputy general counsel for the Self Storage Association. For more information, e-mail [email protected]; visit www.wzlegal.com. 

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Easy Storage Solutions (ESS), a provider of Web-based management software for small- to mid-sized self-storage facilities, has been named to the 2018 “Utah 100,” an annual list of the fastest-growing companies in the state, published by networking organization MountainWest Capital Network. ESS ranked No. 36. Those that made the list were chosen by their percentage of revenue increase between 2013 and 2017, according to a press release.

“We feel super blessed to be in the top 100 fastest-growing companies in Utah. Honestly, one of the biggest reasons we made it this year was because we have such great employees that go above and beyond the call of duty to help our customers,” said ESS co-owner Jimmy Sorenson. “We have an awesome software-development team, an awesome sales team, and a top-notch support team. We have a lot of good things going this year and a lot of cool things coming down the pipeline. We’re excited to build on this momentum in 2019 and continue building a great company.”

ESS was among those recently honored during an awards program held at the Grand America Hotel in Salt Lake City. “We congratulate all of this year’s Utah 100 companies for building outstanding businesses and making strong contributions to Utah’s economy,” said Reed Chase, chairman of the Utah 100 committee. “These companies further advance Utah’s standing as an excellent place to do business.”

Founded in 2008, ESS provides management software, access-control technology and other tech-based products and services. Sorenson and co-founder Ken Hendrickson are also self-storage owners, acquiring their first facility in 2014 and a second last year.

The MountainWest organization comprises entrepreneurs, venture capitalists, consultants, legal professionals, bankers and educators. It promotes and recognizes business growth and capital development in Utah through a variety of award programs and activities.

Self-storage operators in Europe have begun to rapidly adopt technological advancements designed to improve operational efficiency, increase customer convenience and enhance security, according to JLL Real Views, a news site that explores the world of real estate and its impact on business. Innovations include automation tools, item logistics, improved building components and advanced website functionality. The enhancements have coincided with greater consumer demand for self-storage services, JLL reported.

Customer conveniences adopted by some storage firms have ranged from remote receptionist services that take place via Skype to online unit reservations, with the latter available from an estimated 60 percent of facility operators, the source reported. Self-storage businesses have also increased facility accessibility, with more than 33 percent allowing customers 24-hour access, up from 20 percent a year ago. Technology has played a role there, with some operators now using systems that allow tenants to gain entry using their smartphones.

Security additions have included video cameras with remote-viewing capability as well as energy-saving tools such as LED lighting and motion detectors. Nearly half of self-storage facilities in Europe are using LED lighting, according to the source.

Convenience enhancements may also be driven by an increase in commercial tenants, who comprise about one-third of all self-storage customers. Some facilities have been designed with small offices or “drop-down” workstations near storage units, while others offer amenities like Amazon drop-off points and package acceptance to help streamline business for corporate users, JLL reported.

“The high-tech self storage building could effectively become an enterprise and innovation hub of a digital economy,” said Ollie Saunders, lead director of alternatives at JLL (Jones Lang LaSalle), an investment-management firm. JLL partnered with The Federation of European Self Storage Associations on its 2018 survey of the European self-storage market. The findings from the survey were released last month.

Source:
JLL Real Views, European Self Storage Facilities Move Into the Digital Age

Save Green Self Storage, which operates eight facilities in the Carolinas, has acquired Hoopers Creek Mini Storage in Fletcher, N.C., in an off-market transaction. The 4.5-acre property at 615 Mills Gap Road is just south of Ashville, N.C. It comprises 29,850 square feet in 217 units.

It’s the second property Save Green has acquired in the Asheville Metropolitan Statistical Area within the past year, according to a press release.

Based in Greensboro, N.C., Save Green has a portfolio comprising 450,000 net rentable square feet in 3,200 units. It operates facilities in Ashville, Concord and Wilmington, N.C.; and Columbia, S.C. The company is seeking new acquisition and development opportunities throughout the two states.

A woman has been charged with child neglect and false imprisonment after allegedly locking her 14-year-old son inside a self-storage unit in Roseville, Minn., for several hours last month. An employee of Acorn Mini Storage at 2480 Cleveland Ave. N. called police after hearing a voice from inside a locked 5-by-5 unit on Sept. 18.

The teen told police he and his mother had slept in the storage unit the night before and that they’d been homeless since 2016. He also said he hadn’t consumed anything to eat or drink in more than 24 hours. The boy isn’t enrolled in school, according to authorities.

Per the source, when the storage manager called the woman about locking her son in the unit, the mother allegedly replied, “Yeah, and?” Police intercepted the woman on her way to the storage unit. She told them she was trying to get to Chicago and her son was being argumentative. When he refused to go with her, she left him in the storage unit, police said.

Acorn Mini Storage operates 13 locations in Minnesota.

Source:
WCCO, Police: Woman Accused of Child Neglect After Locking Son In Storage Unit

Shurgard Self Storage Europe SARL, the European affiliate of U.S.-based real estate investment trust Public Storage Inc., has released financial statements for the third quarter that ended Sept. 30. In general, the company showed gains in key areas, particularly in operating-revenue growth and net operating income (NOI), according to a press release.

Highlights include a total property operating-revenue growth at constant exchange rate (CER) of 3.6 percent for the quarter, up from 3.3 percent for the first nine months of the year. Same-store revenue growth for the year using CER is at 1.4 percent, in line with company expectations. All stores NOI margin increased by 0.8 percentage points to 62 percent for the year, with 1.8 percentage points growth for the quarter. Adjusted earnings on the European Public Real Estate Association (EPRA) Index are in line with company expectations at €73.9 million for the first nine months of the year. Shurgard joined the EPRA Index on Oct. 24, the release stated.

“After our successful listing, the third-quarter performance is in line with our expectations. Our revenue growth is positively impacted by the increased number of properties in our non-same-store pool. The integration of the five former Pelican properties in Sweden is completed and they are adding to the growth of the company,” said CEO Marc Oursin.

The company opened a new facility in Stockholm in March and another in Neukölln, a borough in Berlin, last month. Another site is under development in Oberschöneweide in the Berlin borough of Treptow-Köpenick, which is expected to open in early 2019, the release stated. Shurgard also acquired a facility in Kensington, West London, for £33 million as well as three ABC Selfstore properties in Central London for £50 million.

“We are strengthening our presence in Central London with the acquisition of three properties from ABC Selfstore. The acquisition of the Kensington property that was under management contract adds further to our presence and revenue growth. Following these transactions, we will have 31 properties in the London area,” Oursin said.

Shurgard operates 229 self-storage facilities comprising 1.2 million net rentable square meters in Belgium, Denmark, France, Germany, The Netherlands, Sweden and the United Kingdom. Its network serves 150,000 customers and employs more than 700 people. Shurgard is listed on Euronext Brussels under the symbol Shur.     

Based in Glendale, Calif., Public Storage has interests in 2,615 self-storage facilities in 39 states, with approximately 171 million net rentable square feet. Operating under the Shurgard brand name, the company also has 229 facilities in seven European countries, with approximately 12 million net rentable square feet.