Brazilian self-storage operator GuardeAqui and investment partner Equity International have agreed to a joint venture with Morgan Stanley Alternative Investment Partners (AIP). Funds from the deal will be used to acquire, retrofit and develop self-storage assets under the GuardeAqui brand name, the companies announced in a press release.

GuardeAquis current portfolio includes more than 40,000 square meters (about 430,556 square feet) of leasable space in five operating facilities in the Brazilian cities of Campinas, Ribeirão Preto and São Paulo, as well as two properties under development in Belo Horizonte and Rio de Janeiro.

We are very excited to partner with GuardeAqui in this joint venture. We are confident in GuardeAquis industry-leading execution and operational capabilities to retrofit and develop self-storage facilities in Brazil, a country with a severe undersupply of quality properties and yet demonstrated, growing demand, said David Boyle, chief investment officer and co-head of the Morgan Stanley AIP real estate group. We are also pleased to work closely with Equity International in this venture and believe their experience and expertise will be integral to the continuing success of GuardeAqui.

The companies estimated there are about 90 facilities currently operating in Brazil, mostly servicing residents and businesses in São Paulo. The self-storage sector in Brazil is currently characterized by growing demand and product awareness, yet limited competition consisting largely of single-store operators with mixed-quality properties and insufficient capital for meaningful growth, officials said in the joint release.

The market opportunity for self-storage in Brazil is tremendous, underpinned by limited supply along with favorable demographic trends and economic growth, added Allan Paiotti, CEO of GuardeAqui. We are honored to partner with Morgan Stanley Alternative Investment Partners to accelerate GuardeAquis growth and execute on our pipeline.

Equity International, a Chicago-based institutional real estate investment company, was already a partner with GuardeAqui. Led by Sam Zell and Tom Heneghan, the investment firm was founded in 1999 and looks for high-growth opportunities with companies in emerging markets outside the United States. It has raised more than $2 billion and invested in 25 portfolio companies in 15 countries.

Established in 2000, Morgan Stanley AIP specializes in assisting institutional and high net worth investors through the design, integration and management of alternative investment programs. AIP has $33.6 billion in assets under management and advisement and employs more than 200 professionals. It has investment offices in Philadelphia, New York, London and Hong Kong.

Steve Monetti, a former bidder on A&Es reality series Storage Wars, discovered 31 urns and containers with cremated human remains at a Feb. 10 auction at Harlem Self-Storage in New York City.  The unit was one of 20 auctioned at the facility at 11 W. 141st St.  Packed inside cabinets and cardboard boxes, the containers included polished brass urns and metal boxes, each with the name of the deceased and the date of cremation.

Monetti, who lives in North Bergen, N.J., told the source he had an aura and felt compelled to bid on the unit, which he ultimately won for $550. The tenant, Eudora Street, rented the unit to store property from her deceased uncles funeral home, M. Marshall Blake Funeral Parlor in Hamilton Heights, N.Y. The uncle, Warren M. Blake had operated the funeral home with his wife Marguerite Marshall. Blake, who died in 2007 at 83, was also a former New York police detective. In a strange twist, the funeral home was also once owned by James Anthony Bailey from Ringling Bros. and Barnum & Bailey Circus.

Self-storage manager Reginald Dawson said Street had regularly paid the $259 monthly rental, but recently fell behind.

Monetti told the source the discovery was the scariest abnormal feeling. After determining no crime had been committed, the police department released the remains into Monettis custody. They were then sent to another funeral home in Harlem, which will attempt to locate family members to accept them.

SmartStop Self Storage, the retail brand for Strategic Storage Trust Inc., is sponsoring Mixed Martial Arts (MMA) fighter Shawn The Great Bunch. The three-year sponsorship will provide the fighter with financial support while he completes his training.

Bunch is currently competing in Bellators Bantamweight Division. In 2012 at Bellator 82, he made his professional and promotional debut against Chad Coon, which he won via unanimous decision. At Bellator 97, he defeated Russell Wilson via split decision. In 2012, he placed third in the World Olympic Games Qualifying Tournament. Bunch had his first defeat via technical knockout against Steve Garcia in October 2013.

Our sponsorship program targets up-and-coming, talented and driven athletes with the goal of helping them reach their fullest potential, said H. Michael Schwartz, chairman and CEO of Strategic Storage Trust, a self-storage real estate investment trust. Shawn is not a typical MMA fighter, as he comes from a very high level of wrestling, where he achieved greatness in the NCAA circuit and has represented the United States in the International Freestyle Wrestling Tournaments.

Bunch trains at The American Kickboxing Academy (AKA) in San Jose, Calif. AKA provides instruction in boxing, kickboxing, Muay Thai, Brazilian Jiu-Jitsu, mixed martial arts and wrestling.

SmartStops first foray into MMA sponsorship was in 2012 when the company sponsored Joe The Hybrid Duarte for more than two years. Last year, the self-storage company sponsored the SmartStop-Mountain Khakis Professional Cycling Team.

Since the launch of Strategic Storage Trust in 2008, the companys portfolio of wholly-owned properties has expanded to include 122 properties in 17 states and Canada. The portfolio includes approximately 77,000 self-storage units and 10.2 million rentable square feet of storage space. 

The city council in Cedar Rapids, Iowa, unanimously approved a zoning change for a self-storage development despite some opposition during previous planning meetings. Self-storage developer JKLR LLC and property owner James M. Hoke plan to build a five-building facility.

Councilmember Monica Vernon voiced concern that an intensive commercial development could wind up on the property if plans for the self-storage facility fell through, but she ultimately backed the project in the 7-0 vote. The council delayed its decision in January due to questions about the project.

The storage proposal drew some controversy last month because the property at 33rd Avenue S.W. and J Street S.W. has some topographical challenges due to a steep grade, and the lot is next to single-family housing.

The planning commission approved the proposal on Jan. 2 in a 5-2 vote. During those proceedings, commission member Allan Thoms said he was against placing self-storage next to the houses and concerned about the number of trees that would be removed from the property.

The lot is on the corner of two arterial streets and had been zoned for single-family homes and offices.

Legislation has been introduced in Illinois and Washington that, if passed, would change the administering of the lien-law process for self-storage operators in those states. Both measures would allow tenant-delinquency notifications be sent by e-mail, while addressing other aspects of the lien process.

Introduced to the Illinois General Assembly on Feb. 4, Senate Bill 2952 would eliminate the need to use Certified Mail for tenant notifications, adding definitions for verified mail and enabling the use of e-mail. Electronic notices would be presumed delivered as long as the operator receives a receipt of delivery to the tenants last-known e-mail address.

Supported by the Illinois Self Storage Association and the national Self Storage Association (SSA), the bill also would enable operators to advertise lien sales by commercially reasonable means other than the local newspaper. As long as three independent bidders attend the auction, the manner of advertising would be deemed commercially reasonable. The measure would also make online auctions permissible.

In Washington, Senate Bill 6331 also would allow tenant notifications be sent by verified mail including e-mail, as long as the tenant expressly agrees to receiving e-mail in the rental agreement and other procedural requirements. Operators who do not receive a tenant e-mail reply or receipt of delivery would be required to send a second notice to the renters last-known postal address.

Supported by the Washington Self Storage Association and the SSA, the bill would also enable operators to place limitations in rental agreements on the value of stored goods. In the case of a lien sale, the value limit designated on the rental agreement would be considered the maximum value of the stored property. The measure also addresses motor vehicles, including boats, and would enable operators to have vehicles towed after delinquency exceeds 60 days.

The Washington bill passed the Senate Committee on Commerce and Labor on Feb. 7 and was referred to the Rules Committee for a second reading.

Jarmix LLC sold American Storage of Clermont New Jersey to Indiana-based self-storage investor and operator Scott Meyers. The property at 24 Clermont Dr. in Clermont, N.J., comprises 39,385 square feet of storage space with 288 units. The facility was 50 percent occupied at the time of closing, according to a press release from Self Storage Profits Inc., an education company owned by Meyers.

We are genuinely excited about the opportunity to add this property to our expanding national portfolio, Meyers said. We look forward to rebranding and re-introducing this business back to the local market as demand for storage space has grown significantly in this community over the past several years.

The self-storage real estate transaction is the 13th commercial property acquired by Meyers and his partners. Meyers and his companies specialize in the syndication, acquisition and management of self-storage facilities nationwide. He is also an author, speaker and self-storage investment trainer.

U-Haul International Inc. purchased Gulf States Self Storage in Lake Charles, La., in December. Rebranded U-Haul Storage at Sharon Lane, the property at 211 Sharon Lane consists of several single-story structures, including six metal buildings, a smaller storage structure, and a wood building that contains the rental office. The facility includes 516 self-storage units and 18 RV-parking spaces. It will be remotely operated by U-Haul Moving and Storage at Hwy 14.

"Our customers have been asking us for years to add storage," said Warren Iles, president of the U-Haul Co. of Northern Louisiana. "We are very excited to offer more storage in Lake Charles for our customers.

Established in 1945, U-Haul more than 40 million square feet of storage space at more than 1,000 owned and managed facilities throughout North America.

Stan the Self-Storage Owner is in a funk. His facility isnt doing as well as it was just a couple of years ago. In fact, occupancy is down, there have been few rental increases, and hes cycled through two full-time and one part-time manager in just 18 months. With a large family and several other investments that require his focus, Stan is struggling to find the time he needs to turn his property around. Hes not ready to sell and still believes he has the makings for a successful siteif only he could find someone to give it the attention it needs.

Lately, hes been hearing a lot about third-party management companies, but Stan has his doubts. Hes worried that paying an outside source to run his business will cut into the little profit hes making. How much control will this management company have? Will it change the facilitys name, ask for his input about major changes or just take over? What if it already operates a facility in his market? How will it be fair?

Hiring a management company can be an intimidating prospect, especially when you dont have all the facts. Lets help Stan clear up some common misconceptions about third-party management services so he can make a clear decision.

Myth 1: Its a HUGE Expense

Lets drill down on the biggest concern for most self-storage owners who are considering hiring a management company: How much will it cost? While each provider has its own fee schedule, they typically charge a percentage of a propertys gross income. Some offer a flat monthly fee. This can vary, depending on the needs of a facility when the management company is hired. For example, a property in need of major renovation, new branding or marketing, or updated software or security may have to pay a bit more.

The fees we charge fund our operations just as rental income funds the operations of a self-storage facility, says Matthew Van Horn, vice president of operations for Cutting Edge Self-Storage Management, which manages 22 facilities in seven states. Our fees are a reflection of the costs of doing business in our industry. Our insurance costs, travel costs, supply costs and cost of living have continued to increase, so we must charge a fee that is in accordance.

Even so, its likely not as costly as many owners imagine it to be. Plus, management companies bring a lot to the table in the way of experience, buying power, branding, marketing know-how and much more.

The management fees paid by a third-party management client are modest in relation to the operational improvements that are normally realized, says Guy Middlebrooks, vice president of third-party management for CubeSmart, a Wayne, Pa.-based self-storage real estate investment trust (REIT). A good third-party management company will continually improve results by utilizing revenue-management systems, Internet-marketing strategies, professional call centers, and best-in-class operating practices.

Essentially, if youre property isnt improving, the management company isnt doing its job. [They] should be able to show you how the increased revenue will outweigh their fees and expenses including the management fee, says Noah Springer, senior director of third-party management for Extra Space Storage Inc., a Salt Lake City-based REIT.

Heres another bonus to hiring a management team: more free time, which is exactly what owners like Stan need. In addition to the direct financial benefit that third-party management companies offer, they free up their clients time, which is very valuable in its own right, Middlebrooks says.

Myth 2: They Dont Have Skin in the Game

One of the biggest myths about hiring an outside company to oversee daily operations of a self-storage facility is it wont treat your store as its own. In other words, the third-party provider doesnt have any skin in the game, so it wont work as hard at attaining success as, say, the facility owner, whose livelihood depends on it.

This is a concern that comes up in almost all initial sales communications with potential clients looking at third-party management, says Dale Payne, client relations/sales manager for Uncle Bobs Management, the third-party management arm of Sovran Self Storage Inc., a REIT headquartered in Buffalo, N.Y.

The opposite is true if you go with a company that has the staffing, buying power and expertise to oversee many properties at once. Typically, these management companies will standardize their services.

The larger third-party management companies treat their owned and managed stores the same, operating them in concert as one single portfolio, Middlebrooks says. For example, a single operator managed by a third-party company will receive the same website placement, search engine optimization and marketing, sales-center treatment, and training support. There really is no difference. Managed stores actually have the added oversight of a dedicated third-party management team, Middlebrooks adds.

Essentially, the best management companies operate stores blindly to ownership, says Springer. But dont take a companys word for it. Ask referrals how this has worked for them and if they feel that their properties receive the same level of service as the management companys owned stores, Springer advises. I would question a company that differentiates between the two so as to provide gain for their owned stores at the expense of those managed.

Moreover, the proof is in the doing. A good management company will have a plan for your facility, including a budget, maintenance schedule, sales goals, staffing or training agenda, marketing strategies, and everything else tied to the successful operation of a storage facility. And they must be willing to share this information with ownership.

A good management company should provide the owner a detailed budget every year and reports to show how theyre performing compared to that budget on a regular basis, says Mel Holsinger, owner of Tucson, Ariz.-based Professional Self Storage Management, which oversees 44 properties in Arizona, California, Colorado and Texas. Each line item should be thoroughly explained so that there are no misunderstandings about how they will spend your money.

This also ensures a level playing field between your site and those owned by the management company. Make your management company accountable to the results promised early on, Payne advises.

Myth 3: Ill Lose My Branding or Employees

Self-storage operators work hard to establish themselves as part of their community, and its more than just the facility name. They join the local chamber of commerce, support kids sports teams and host community events. Changing the facilitys name or even color scheme may be unfathomable for some operators. But not all management companies require an owner to adapt this way.

We realize your facility is very much like your baby. As an owner, you have put a lot into it. You have invested not only millions of dollars, but a lot of blood, sweat and tears as well, says Stacie Maxwell, vice president of marketing for Universal Storage Group, a Smyrna, Ga.-based third-party management company that oversees 50 properties in 13 states. We recognize that you are placing a lot of trust and faith in us by allowing us to manage and operate your multi-million-dollar investment, and we always vow to handle it as if it were our own. Bottom line, the brand name under which you choose to operate is your decision, and yours alone.

Other owners may see a name change as a way to generate awareness through an established brand. Owners take pride in the name they worked so hard to establish in self-storage. They feel by changing to the management companys brand they are starting all over in creating a link between their store and customers in the market, Payne says. One way to overcome this is by using a national-branded management company that already has a presence in your market.

Some owners also worry signing on with a management company is a pink slip for their current employees. This isnt always the case, but a possibility, particularly if staff is a key component to the facilitys current negative state. However, many companies will try to work with the existing staff by offering professional training and mentoring.

Whether a manager is terminated or kept on, it is imperative the owner let the third-party management company handle that decision, Payne says. Management companies can take the emotion out of personnel decisions that many owners have a difficult time handling or, in many cases, ignore.

Myth 4: Im No Longer in Control

Heres another fear many owners have: zero decision-making power. In reality, the majority of third-party management companies prefer to act as your partner, not take over your facility completely. Yes, there will be some changes, but self-storage owners arent completely powerless.

Most third-party management companies allow their clients to interact directly with those making day-to-day decisions, Middlebrooks says. This includes communication with everyone from the marketing manager to the property manager.

In fact, regular communication is a key to symbiotic relationship and future facility success. Don't be afraid to ask a lot of questions, Van Horn says. Often times, most issues can be cleared up through a phone call or meeting. Also, take advantage of our knowledge and contacts. If you need something for your facility, such as new financing, real estate or legal advice, your management company will know someone who can help you.

Myth 5: Managing a Facility Is Easy

Anyone who thinks overseeing the security, marketing, maintenance, collections, sales and legal aspects of a self-storage facility has never stood behind the counter. The fact is, managing a facility is hard work!

Like our friend Stan, many owners have other jobs, family commitments, interests or investments, leaving little time to focus on the daily operation of a self-storage property. Those who assume they can hire an inexperienced family member or even an experienced manager to oversee their million-dollar asset shouldnt be surprised when the property doesnt perform well.

Just as you would not act as your own surgeon or attorney, you are probably equally unqualified to take on the task of managing full-time a self-storage facility worth millions of dollars in todays very complicated and competitive self-storage environment, says Kenneth E. Nitzberg, chairman and CEO of Emeryville, Calif.-based Devon Self Storage, which owns or manages 32 facilities across the country.

Just keeping up with the legal aspects of lien sales is a job. The legal landscape is constantly changing as various state legislatures pass new laws, state agencies implement new regulations, new court cases are decided that could impact the facility, and new and various taxes are imposed, says Nitzberg, noting that someone needs to not only review these changes but implement them as well.

Myth 6: All Management Companies Are the Same

While it may seem on the surface that all management companies are alike, that couldnt be further from the truth. Some are nationwide, others concentrate their services by region. Some offer the full gamut of servicesfrom hiring managers to overseeing marketingwhile others allow owners to pick and choose the services they need.

Some companies create a machine that manages many storage facilities in a cookie-cutter fashion, based on years of experience and a lot of data. Other companies are very involved on a daily basis, focus on training, drive local marketing and customize strategies for each location, says Alyssa Quill, vice president and managing partner of Storage Asset Management Inc., a York, Pa.-based company that oversees more than 25 properties along the East Coast. Third-party management companies in self-storage also vary in the way they work with owners of the facilities they manage.

If youre considering hiring a third-party management company, do your homework. Ask for referrals, make sure you understand all their fees and the services they provide. Then let your new partner prove its worth.

There are a number of great management companies in our industry. Once you make a choice, trust your management company to make any necessary changes to your facility's day to-day operations, Van Horn says. Our goal is to manage all of the important metrics of your facility and sometimes that means we have to change something. Sometimes we need to make these changes, and we need your support.

One thing Stan the Storage Owner knows for surehis current course is getting him nowhere. Now that he has some facts, he can evaluate his short- and long-term goals to determine if hiring an outside management company is the right move for him.

StorageBattles.com and StorageTreasures.com, online-auction websites serving self-storage businesses and auction hunters, have merged under the StorageTreasures name. The combined company has more than 3,000 self-storage facilities signed up to hold lien sales online and a database of 750,000 registered buyers nationwide, officials said in a press release.

"The merger of these two companies makes perfect sense for both companies," said James Grant, founder of StorageBattes.com who will serve as CEO of the merged business. "StorageTreasures.com has great name recognition, SEO and online visibility, and is by far the leader in storage-auction listings in this industry. StorageBattles.com has a product that was first to the market, a significant client base and substantial internal infrastructure. [The merger is] a really good consolidation of talents, resources and market share."

The companies have averaged more than 3,000 online auctions combined each month, and officials said they expect to nearly double that amount this year. Last summer, StorageTreasures.com surpassed 500,000 members in just over two years of operation.

"Who wants to stand at an onsite auction in Phoenix when it's 115 degrees, or in Boston when it's snowing?" Grant asked. As for storage operators, they typically recoup just 50 percent of money owed with a physical auction, but our online auctions bring in an average of 117 percent of the debt due."

StorageTreasures.com founder Lance Watkins was instrumental in the introduction of A&Es reality television show Storage Wars, which is often credited for increased turnout at live self-storage auctions. "Three years ago almost nobody knew about self-storage auctions," Watkins said. "The industry largely pretended it didn't exist. Most bidders were professionals in a tight-knit community who had little competition and sometimes colluded to keep bids low. That all changed with shows like Storage Wars. They brought auctions out of the closet."

Company officials acknowledged that the TV series popularity has also created headaches for self-storage operators who have had to contend with large auction crowds and inconvenienced tenants blocked from accessing their units. These factors, along with numerous buyers walking away from auctions empty-handed, have helped spur the popularity of the online-auction business, the company said.

StorageTreasures.com is a free storage-auction locator and self-storage facility finder covering the United States and Canada. The website offers auction schedules and site-specific guidelines for auction hunters and self-storage owners alike.

CPA:18 Global, an affiliate of global net-lease real estate investment trust (REIT) W. P. Carey Inc., has acquired two self-storage facilities in Florida for a combined purchase price of $24.6 million. The acquisition increases the company's managed self-storage assets in the state to 10 properties totaling 699,674 square feet.

Pleasant Hill Self Storage at 4390 Pleasant Hill Road in Kissimee, Fla., has 83,280 net rentable square feet in 981 units. Constructed in 2006 and expanded to include two additional storage buildings in 2009, it is the newest self-storage facility in the Kissimmee area, stretching across 14.7 acres. In addition to self-storage, the property offers 234 parking spaces for boat/RV storage. It sold for $12 million.

Michael Mele, first vice president of investments at the Marcus & Millichap Real Estate Investment Services Tampa, Fla., office, along with Douglas Mandel, a first vice president of investments, and Todd Everett, senior associate, both in the firms Fort Lauderdale office, brokered the transaction. The seller was a limited liability company in West Palm Beach, Fla.

This sale has an aggressive price per square foot for the Orlando market, Mele said. However, the extremely high barriers to entry that exist for new competition and the propertys potential upside justify the sales price for the new owners. The facility also fits nicely into their portfolio."

The second acquisition, a self-storage facility in St. Petersburg, Fla., has 85,842 net rentable square feet in 882 units. Both properties will be managed by Extra Space Storage Inc.

"Following on the heels of our robust acquisition volume in 2013, the acquisition of these two properties is a good start to 2014," said Anne Coolidge Taylor, managing director for W. P. Carey.

The company recently announced $121 million of self-storage acquisitions in 2013 on behalf of its managed REITs. The properties are in California, Florida, Georgia, Hawaii and New York. Active in the self-storage sector since 2004, W. P. Carey owns and manages 153 properties totaling 9.26 million net rentable square feet.

"In terms of the overall storage-investment market, recent reports indicate that over the past two years, competition among buyers has caused self-storage values to increase. As we evaluate new investment opportunities, we continue to monitor local market conditions that indicate growth in new self-storage construction in the coming years," said Liz Raun Schlesinger, another managing director for W. P. Carey. "Having added four Florida storage assets to our managed portfolios during 2013, we continue to be attracted by the overall strength of the Florida storage market."

CPA:18 Global is a publicly held, non-traded REIT.

New York-based W. P. Carey is an investment-management company that oversees a global investment portfolio of approximately $15.4 billion. It provides companies worldwide with long-term sale leaseback and build-to-suit financing, and engages in other types of real estate-related investment.