An active Self-Storage Talk member and self-storage facility operator has hyped an episode of the A&E TV show "Storage Wars" by posting production-day photos from her facility. Though the air date of this particular episode has yet to be determined, the photos offer a sneak peak into the show. Apparently, the show's main personalities ogle some celebrity and film memorabilia, including a jacket that was worn by Kevin Costner in the film "Waterworld."

The SST member, AirportSuperStorage, first announced that "Storage Wars" would be filming at her Southern California facility in a discussion thread. Members warned her of all the precautions she should take with a film crew on her property, though it seems that filming of the auction went off without a hitchmostly. Of course, because auction attendees were going to be on camera, they had to consent to being filmed by acknowledging a waiver, which didn't create too much of a headache for AirportSuperStorage, but might create problems at other facilities, members say.

Some operators are now clamoring for the opportunity to get the "Storage Wars" crew on their site, though others are still apprehensive. Member kenbrandy writes, "Hopefully, (the show) will raise more awareness, and if it comes down to a lien sale, it will help raise up bids to recover any losses."

On the other hand, CindyM writes, "Sounds fun, but I'd rather not have (the show) here. Not one for the camera or issues with others not wanting to sign a release/waiver or anything like that. Haven't seen the show yet, but will be watching for it!!"

Would you let the "Storage Wars" crew film at one of your auctions? Check out AirportSuperStorage's photos, and then post your reactions. You must be a registered member to post, but registration is free and takes only a few minutes.

New episodes of "Storage Wars" air regularly at 10 p.m./9 p.m. central on A&E.

Live and growing since 2008, Self-Storage Talk is the largest online forum in the industry and the official forum of Inside Self-Storage. SST has approximately 3,750 members posting in 23 different topical forums amounting to 3,700 threads and 31,700 posts.

The rapidly changing financial landscape has left many self-storage owners and investors confused about the availability and terms of todays loans. Two seminars at the Inside Self-Storage World Expo in Las Vegas, March 14-16, will offer attendees the vital information they need about todays lending environment.

A panel of self-storage real estate and lending experts, led by John Gilliland of Investment Real Estate LLC, will discuss whats happening in the market, capitalization rates, bank appraisals, loan amounts and terms, and what the industry can expect in the near and long-term future. In addition, Georgia Ragsdale, CEO of Best American Financial Services LLC, will take a closer look at the new loans from the Small Business Administration. Ragsdale will outline the rates and terms, how to qualify, and the submission process.

The ISS Expo, held at the Paris Hotel & Casino, will include four comprehensive education tracks, several peer-to-peer networking events, a Self-Storage Q&A, two days of exhibits and more. Attendees can take advantage of discount room rates through Feb. 15 by calling 1.800.HARRAHS and mentioning the expo. Details about the industrys largest conference and tradeshow can be found at www.insidselfstorageworldexpo.com.

Whether youre a current self-storage owner or just thinking about entering the industry, the logical question today is whether you should buy an existing facility or build a new one. Although there are many dynamics involved, economics makes the answer simple: buy instead of build.

Overbuilt Markets

From the inception of self-storage, development and growth was steady until 2008. With more than 50,000 facilities nationwide and long-term economic expansion from the early 80s, housing growth was high, discretionary spending was strong, and additional storage space was demanded to meet the needs of mobile families and growing businesses. The failing of Lehman Brothers in September 2008 and the ensuing financial crisis changed the landscape in many ways.

Self-storage development peaked in 2006 and has decreased each year since. Less than 200 new facilities were expected to be developed in 2010, and most of those projects were already in the pipeline or too far along in the process to be stopped.

In some markets, the most recently added facility was one too many and has yet to reach its goals. In addition to lagging lease-up schedules, rental rates are 10 percent to 30 percent lower than forecasted and include promotional discounting. This has resulted in owners applying further capital contributions to keep facilities open, or banks throwing in the towel and foreclosing on properties.

In better times, developers built a facility and sold it at a profit without renting a single unit. Today, a lease-up facility is valued entirely on its cash flow, which usually equates to a value less than the bank loan. This doesnt please the lender, obviously, and when competing local banks find out, they restrict their self-storage lending. Add to this dilemma that banks have plenty of non-performing office, warehouse and retail centers. Their hands are full of problem loans, capital requirements and regulatory oversight.

With these self-storage properties worth less than their cost of construction, its easy to see how much more valuable an existing facility can be, particularly if it has a solid stream of valuable cash flow. Like stock investors in a down market who flock to the perceived safety of the bond market, self-storage investors flee development risks in favor of established cash flow.

Buy vs. Build Equals Less Risk

With overall weakness in the real estate market, investors desire higher return on their investments. This lowers values and increases capitalization rates on properties. Class-A properties have held their values better than B- and C-class facilities. Class-A facilities topped out in the 6.5 percent to 7 percent cap-rate area and are now trading between 8 percent and 8.5 percent, which is not bad, all things considered.

Class-B and -C facilities are all over the map. While they trade anywhere between 9 percent and 11 percent, they tend to bring a wider range of offers, with fewer qualified. They often come with first-time buyers who have the additional hurdle of trying to convince lenders to put their faith in them.

All four of the publicly traded real estate investment trusts (REITs)Public Storage Inc., Extra Space Storage Inc., Sovran Self Storage Inc. and U-Store-It Trustclosed their development divisions in recent years. While this has occurred during economic slowdowns in the past, these shutdowns could last longer. Banks have too many problem loans today and too many coming down the road. Most experts believe development will be meager for at least three years, if not longer, and the REITs are well aware of the price differences and reduced risks associated with buying existing properties.

For a couple of years now, REITs quickly dropped street rents in favor of higher occupancy levels until rents stabilized. They are now at or near the point where any small recovery in the economy could bring the rent increases they favor. The forecast is for small rent increases, but it will be some time before rents are back at peak levels.

Financing Challenges

Financing is scant for new development and tough for established self-storage veterans, while first-time developers have little chance of obtaining a construction loan. This doesnt mean some markets are undersupplied or well-thought-out development projects are without merit. Steel prices are near all-time lows, and subcontractors across the board are looking for work and priced at bargain levels. Many vendors are doing work to break even so they can avoid layoffs and rehiring once business improves. Land cost is also inexpensive. Add in the time required to get a site fully approved for development and you might get lucky enough to open a new facility about the time economic prospects are improving.

When you add it up, total development cost may not be as cheap as buying a new facility, but overall costs are probably 20 percent below what they were a few years ago. Be fully prepared when seeking financing, and have an ironclad business plan, feasibility study and strong financial partners if you want to build today.

What It Means for Buyers

Buyers are in a wonderful position if they have cash on hand. At the onset of the recession, most decided to wait for prices to stop falling. This was the case for most of 2009 and the first half of 2010. As a result, they found few opportunities and sellers who were leery of bottom-fishers.

We also saw distressed properties where the banks first move was to offer interest-only payments to give owners more time to increase occupancy. This meant fewer deals on the market, fewer offers and a dramatic decrease in transaction volume. Volume improved in the latter part of 2010, and owners saw a greater number of offers and some stabilization in pricing.

Buyers are more active. Prices have stabilized. Many buyers are getting anxious to put money to work in an attractive market. Banks today are requiring 30 percent to 40 percent equity in acquisitions, so if you can find a good facility with the conservative financing that comes with it, you can have a solid investment for years to come.

John H. Gilliland is president of Investment Real Estate LLC, which provides full-service self-storage brokerage, management, construction and feasibility services for facilities in the mid-Atlantic and northeastern United States. He can be reached at 717.779.0804; e-mail [email protected] ; visit www.irellc.com .

Inside Self-Storage (ISS) and industry attorney Jeffrey Greenberger will present a free webinar on Jan. 25 to address the changes taking place to the self-storage lien law in California.

Assembly Bill 655 (AB655), will change effective Jan. 1. While the revised legislation includes improvements to benefit the states self-storage operators, there are important nuances of which owners and managers should be aware as they conduct business with tenants in 2011. The New California Lien Law: What Self-Storage Operators Need to Know, the relevant changes made by the Bill and how it directly affects the industry. Greenberger will address:

• The specific changes being made to the California lien law
• What these changes mean for an operators lien-sale process
• Which of the changes you, as the operator, may or may not decide not to implement
• What changes you need to make to your facility forms under the new law
• What has changed about oppositions to lien sales

The event will take place Jan. 25 at 11:30 a.m. ET. The free registration process can be completed at www.insideselfstorage.com/webinars.

Greenberger is a partner in the Cincinnati law firm of Katz, Greenberger & Norton LLP, where he focuses his practice on commercial real estate, with a concentration in self-storage. Jeff assists operators around the country in the design and implementation of legal policies and procedures as well as other operational issues, with a focus on litigation avoidance and liability reduction.

Greenberger is the legal advisor to several state self-storage associations and a featured speaker for national and state self-storage conferences. In addition to the Legal Learning Webinar Series, which he presents annually in cooperation with ISS, he teaches Legal Learning Live workshops twice annually as part of the Inside Self-Storage World Expo. The next workshop will take place March 15, at the Paris Hotel & Resort in Las Vegas. Details can be found at www.insideselfstorageworldexpo.com.

ISS provides print publications, conferences, tradeshows, websites and other educational resources for the self-storage industry. Offerings include ISS magazine, ISS Expos, the annual Factbook, the Qualified Storage Manager Certification Program (www.selfstorageeducation.com), and the Self-Storage Talk online forum and community (www.selfstoragetalk.com).

Stor N More Self Storage, a family owned and operated facility in Tampa, Fla., is serving as a designated drop-off location for Feeding America, one of the nations leading hunger-relief charities. Customers are encouraged to donate cans and other non-perishable food items to the storage site at 1505 S. US Highway 301.

As an incentive, anyone who donates a bag of canned goods when signing up for a storage unit will enjoy a waiver of their setup fee. Thats a $23 value on a 10-by-10 unit, according to facility manager Scott Reifsnyder. The unit rents for $69 per month.

Stor N More Self Storage was the winner of the Brandon Chamber of Commerce Award in 2008 and the winner of a Googles Favorite Places Award in 2010. The facility regularly supports local charities including Boys & Girls Club of Brandon, Spoto High School of Riverview, Fla., Moffitt Cancer Center and Autism Speaks.

Feeding Americas mission is to feed the nations hungry through a network of 200 member food banks and engage Americans in the fight to end hunger. Each year, the organization provides food to more than 37 million low-income people, including 14 million children and nearly 3 million seniors. Its member food banks support approximately 61,000 local charitable agencies and 70,000 programs, which provide food directly to individuals and families in need.

Hundreds of thousands of dollars worth of drugs were found Friday in a self-storage unit in Stateline, Nev.

Douglas County Sheriffs Office investigators were tipped off by self-storage employees at Kingsbury Self Storage, who told deputies they smelled a strong odor of marijuana coming from a storage unit.

After two K9 dogs also detected the odor, a search warrant was obtained. Police found approximately 50 pounds of marijuana, two ounces of cocaine and a loaded semi-automatic pistol. The estimated street value of the marijuana is roughly $150,000. The cocaines street value is estimated at $5,000.

The Douglas County Sheriffs Office is conducting further investigation into who rented the storage unit.

A man was electrocuted at a Devon Self-Storage facility in Frankford, a prominent Philadelphia neighborhood, on Saturday afternoon. The 44-year-old man, an employee of the facility, was working on a door hinge near a power line around 2 p.m. According to police, he was pronounced dead at the scene at 2:24 p.m. His identity was not released.

Though branded with the name Devon Self Storage, the facility does not appear to be currently managed by that company, which owns and operates 25 self-storage facilities across 11 states. A Google search of the property address, 5400 Eadom St., Philadelphia, PA 19137, results in several for sale listings for the 161,000-square-foot property, which indicate that the site is vacant and may have been recently sold.  

A customer at a self-storage and carwash facility in Palm Coast, Fla., said he was robbed Friday by a man wielding a gun.

The robbery occurred around 1:30 p.m. at Parkway Self-Storage and Car Wash in the 4800 block of Palm Coast Parkway Northeast.

Flagler County Sheriff's deputies said the robber is described as a white man wearing a black hooded sweatshirt and sunglasses. He was unshaven and had a stud piercing under his lower lip. The robbery victim said the man fled on foot from the carwash part of the facility. Anyone with information can contact Crimestoppers at 888.277.TIPS.

The Storage Group, a division Resource Technology Management Inc. (RTM), now offers customers smartphone-friendly websites with the launch of www.westchaseselfstorage.com and www.camelbackstorage.com for Synergy Storage Group.

We are now able to offer our storage owners and their customers something most operators dont have, said Jim Gail, president of Synergy Storage Group, a nationwide self-storage management and real estate consulting company. Its not a matter of whether every storage facility will want a mobile website, its just a matter of time when each will realize they must have one as mobile website traffic continues to increase globally.

A mobile website provides prospective and existing self-storage customers effortless navigation to all pertinent information as they search the Internet from smartphones such as iPhone, Blackberry, Android, Windows Mobile phones and others.

Earlier this year, the hospitality division of RTM, known as eMax, began rolling-out mobile websites for many of its 300 hotel websites.

Once this platform was available, most of our clients jumped at the opportunity to expand their Internet marketing platform, said Terry Mueller, managing director of The Storage Group and CEO of RTM. They seemed to recognize the need to establish their place in the mobile-search rankings as many technology analysts project smartphone annual sales to surpass simple mobile phones by the end of 2011 and personal computers by end of 2012.

The Storage Group is a full-service Internet marketing company providing self-storage companies with tools and solutions including mobile websites, website design, search-engine optimization, customized-account management and more.