Brightwork Real Estate, a Florida-based development and acquisition company, plans to build a self-storage facility next to a Wawa gas station and convenience store it’s developing in Jacksonville, Fla. The company filed plans with the St. Johns River Water Management District to construct a three-story self-storage building comprising 101,100 square feet of space at 5017 Philips Highway, according to the source.

The parcel formerly housed an auto dealership. BW Philips Bowden LLC, led by Brightwork, purchased the 3.9 property in May for $2.25 million. The seller was Franklin G. Griffin, a trustee of the Franklin G. Griffin Revocable Living Trust, the source reported.

The storage facility will be built on 1.79 acres, just east of the gas station. Bohler Engineering is the civil engineer on the project.

Based in Tampa, Fla., Brightwork specializes in the development of commercial properties for its own account as well as private and corporate clients. The company is led by Brad Douglas, Henry Hilsman and Austin Simmons.

Source:
Daily Record, Self-Storage Center to Join Wawa Along Philips

Update 3/9/18 – A new “Humble Design – Fueled by U-Haul” chapter is now open in Seattle. It’s the partnership’s third location since launching last year. Its other two chapters are in Chicago and Detroit.

A ribbon-cutting ceremony was held on March 2 at the warehouse where donated furnishings will be stored. The property at 3235 16th Ave. S.W., owned by King County, is on Harbor Island, an artificial island in the mouth of Seattle’s Duwamish Waterway. Humble Design will be ready to receive donations by the end of April, according to a press release.

Tia Chang, the site manager, was formerly employed by a Seattle law firm and holds a degree in sociology from American University. She’ll work with Mary’s Place, an emergency shelter for homeless families, to identify families in need of services. Humble Design Seattle will begin by helping one family each week, with the goal of assisting three families per week.

The Seattle expansion was made possible through the ongoing cooperation and commitment of city and King County officials, Microsoft Corp. and the Schultz Family Foundation, the release stated. The partnership is encouraging Seattle-area companies to sign up for group volunteer days to decorate a home or sponsor a family.

“As Humble Design expands nationally, we look to cities like Seattle that are innovators in implementing new solutions for an overwhelmingly growing population of fragile individuals,” said Strasberg, who formally introduced the new chapter yesterday at the “Be Bold Seattle” event celebrating International Women's Day. “All of the companies and groups that have come together to make this happen are hugely impacting the lives of those touched by hard times.”

The donations included a $150,000 grant from the Schultz Family Foundation. “The Schultz Family Foundation is proud to partner with Humble Design as they launch in Seattle/King County,” said Daniel Pitasky, executive director for the foundation. “Humble Design is a complement to the Schultz Family Foundation’s interest in permanent housing solutions. Their program offers stability and dignity to families in transition, as well as the opportunity for members of the community to better understand and support these families.”

In addition, the support of Microsoft employees, combined with matching funds from the company, generated early momentum, financing and community support to expand into the Puget Sound region, the release stated.

“Our employees are determined to do their part to help children and families in our region have beds to sleep in and roofs over their heads,” said Karen Bergin, director of employee engagement at Microsoft Philanthropies. “They've helped blaze the trail into Seattle for Humble Design, an organization that has provided a sense of security and dignity to formerly homeless families in Detroit and Chicago.”

Chapters in additional cities, including San Diego, are in the planning phases. Since beginning its philanthropic mission in 2009, Humble Design has now helped more than 900 families. It hopes to assist more than 1,000 families by the end of this year, the release stated.

“Our shared ideals to help people meet their basic human needs make Humble Design and U-Haul effective partners,” said Kim Merow, president of the U-Haul Co. of South Seattle. “There is a collective passion to make a genuine difference in Seattle while fighting the epidemic of homelessness. We’re truly honored to be a part of this affiliation and expansion into King County.”

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3/27/17 –  Phoenix-based U-Haul International Inc., which operates more than 1,300 self-storage locations across North America, is partnering with Humble Design, a nonprofit that provides home furnishings to people transitioning out of homelessness, to extend its services into nine new markets by 2020. U-Haul will provide space to store donations as well as the use of its moving trucks. It will also offer grants and company volunteers, according to the source.

“Humble Design – Fueled by U-Haul” furnished a home in its first new market, Chicago, earlier this month. The partnership plans to expand soon to Seattle. Other markets with significant homeless populations that are being considered include Boston, New York and Philadelphia, the source reported.

U-Haul has offered the nonprofit 50,000 square feet of storage space at its facility in Bridgeport, Ill. It also plans to provide 15,000 square feet of space at its facility in Dearborn, Mich., which is under development. Humble Design, which currently has a warehouse in Pontiac, Mich., intends to raise $238,000 to cover the build-out of the new satellite interior as well as to fund staffing, which will include a director, warehouse manager, designers and on-staff movers.

Partnering with the nonprofit is "a vote of faith in their mission and ability to serve this overlooked need in the community," said Sebastien Reyes, director of external communications for U-Haul.

Founded in 2009 by Ana Smith and Treger Strasberg, Humble Design assists families in leaving homeless and abuse shelters by providing in-person design consulting and repurposing gently used décor and furnishings. It works with eight area shelters and agencies to identify families in need. The organization has helped 660 families since its launch, according to its website.

Established in 1945, U-Haul International Inc. has more than 44 million square feet of storage space at more than 1,200 owned facilities throughout North America.

Sources:
Crain's Detroit Business, Humble Design, U-Haul Expand Program to Help Homeless Into New Markets
Humble Design, Website
PR Newswire, Fighting Homelessness: Charity Humble Design Expands to Seattle

President Trump has issued new tariffs on imported steel and aluminum. Set to take effect in two weeks, these fees will apply to product from every country except Canada and Mexico. The move is considered controversial, and those inside and out of Washington, D.C., fear a global trade war could ensue. With the self-storage industry in the midst of an incredible development boom, there’s no doubt its projects be affected, as storage structures are largely made of steel. Will the new tariffs lead to a steel shortage, higher product costs or delays in shipments? Read what others predict and join the conversation on this hot topic.

Update 3/8/18 – TD Self Storage has revised and expanded its mixed-use proposal for 101 Oneal St. Dubbed the West End Community Hub, the project would include 2,000 square feet of band-practice rooms, co-working space, 11,297 square feet of street-level retail and a 19,309-square-foot rooftop event venue, in addition to the 107,000-square-foot storage facility. Ground-level parking would offer 50 spaces, according to the source.

The band-practice area would be called the West End Music Hub. TD added it to the design after listening to feedback from community members. It would target musicians living in multi-family buildings, the source reported.

TD believes the iShare co-working space will be ideal for traveling salespeople who don’t have a physical office but require storage space, professional meeting equipment, access to WiFi and other office amenities. The developer intends to incorporate the concept in other future developments, Burgin told the source. An earlier report indicated 1,160 square feet would be set aside for office space. It’s unclear if the area designated for iShare has changed in size.

The retail space could include several restaurants, including a coffee bar, juice bar and a hamburger eatery. TD is considering potential franchises JHM already works with at its hospitality properties, Burgin said.

The rooftop entertainment venue would be managed by JHM and available only for rent, as opposed to general use by the public. It would include a performance stage and fully equipped bar and kitchen. The venue would be designed to host large indoor or outdoor weddings, small cocktail hours and other events.

The project received positive feedback on March 1 during an informal presentation to the Greenville Design Review Board Urban Panel. It will need formal approval from the board to move forward, according to the source.

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1/12/18 – TD Self Storage Enterprise LLC, a development and acquisition venture launched last year by JHM Hotels, is pursuing a mixed-use project in the West End historical district of Greenville, S.C. The four-story facility would be built on a nearly 1-acre lot at the corner of Oneal and Rhett Streets, which currently houses a Piedmont Electrical Distributors warehouse. It would include 931 self-storage units, 1,430 square feet of retail, 1,160 square feet of office space and 61 parking spaces in a basement garage, according to the source.

The structure would be constructed of brick, glass and metal, and leave room for a corner coffee shop. The developer intends to pursue Leadership in Energy and Environmental Design certification from the U.S. Green Building Council.

The project would require a special exception from the city to proceed. The board of zoning appeals was scheduled to review the plan last night. Planning staff earlier recommended against the development due to a code that prohibits self-storage at street level, the source reported.

The property is in a section of the West End known as the Warehouse District. The area historically has housed industrial businesses but has been eyed by the city for redevelopment, including “adaptive re-use opportunities for startups,” according to the source. The city would also like to see residential lofts in the area.

"We are currently working with our architect to meet these requirements," Roger Burgin, senior vice president of TD Self Storage, told the source. "I feel confident we will be able to meet all requirements and develop a fantastic project that will benefit the West End and the city of Greenville."

Launched in August, TD Self Storage is headquartered in Greenville. It was created to pursue opportunities in the Midwest and Southeast, with eventual expansion to California, Texas and other U.S. markets. Its goal is to amass an owned portfolio of more than 100 storage properties.

Since founding its self-storage division, JHM Hotels has since retired its name and created four separate hotel companies: Auro Hotels, Sarona Holdings, Siddhi Hotel Group and Sima Hotels. JHM acquired and developed hotels throughout the United States for 44 years. The group owns and operates 38 hotels in seven states, according to its website. Its brands include Hilton, Hyatt, Marriott and Westin. The group’s affiliate, JHM Restaurant Group, owns several high-end restaurants.

Sources:
Upstate Business Journal, West End Community Hub to Bring More Co-Work Spaces, Restaurants, and Retail to the West End
Greenville News, Self Storage Complex in Greenville's West End Would Resemble Apartments, Coffee Shop

The Tennessee Self Storage Association (TNSSA) has named its 2017 Manager of the Year. The recipient is Michelle Engler, manager of the Mt. Juliet, Tenn., location for A+ Storage of Tennessee LLC. It’s the third consecutive year, and fifth time in six years, that an A+ Storage manager has received the award.

Engler, who has managed her facility since August 2016, was also named A+ Storage Manager of the Year in December. Under her care, the Mt. Joliet property has performed so well that it expanded in the third quarter of 2017 with a two-story, 40,000-square-foot addition, according to a press release. Engler organized and marketed a ribbon-cutting ceremony to commemorate the event, which included live music, prizes and refreshments. 

Engler increased the site’s revenue by 5 percent and ended the year with delinquencies of fewer than 1 percent, the release stated. She also broke the company’s retail-sales record, selling more than $10,000 in product, with retail-ticket average of $36.91 per new customer. In addition, she garnered positive company reviews on Google, earning the property a five-star rating.

Engler is involved in charity work for the Mt. Juliet Animal Shelter, Mt. Juliet Help Center, Mt. Juliet Police Department and Wilson County Emergency Services Rehab. She’s an active trade partner with Del Webb Lake Providence and the Mt. Juliet Chamber of Commerce. Last fall, she donated free use of a storage unit to serve as a supply drop-off for victims of Hurricane Irma in Puerto Rico.

Engler’s success is based on her relationship with tenants, business leaders and friends in the community, the release stated. “It has been my delight to watch her grow, and it was my honor to nominate such a deserving candidate for this award. We are extremely proud,” said Stephanie Tharpe, senior vice of president of operations for A+ Storage.

Other A+ Storage managers who have received the TNSSA accolade include:

• Allen Baxter, Nolensville location, 2016
• Ashley Dawn (past employee), Mt. Juliet location, 2015
• Betsi Jackson, Murfreesboro location, 2013

Tharpe received the award in 2012.

Serving Tennessee self-storage professionals for more than a decade, the TNSSA offers four quarterly events, and a two-day legal seminar and conference each year. It has been affiliated with the national Self Storage Association since 2007.

Founded in 2003, A+ Storage operates seven facilities in Fortress, La Vergne, Mt. Juliet/Providence, Murfreesboro, Nashville, Nolensville and Spring Hill/Columbia, Tenn.

The Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage, announced Jane H. Sauls as a new broker affiliate for the company in Georgia. She joins the team at Commercial Realty Services of West Georgia, which includes fellow affiliate Mike Patterson.

Sauls has been in commercial real estate since 2006. She has also owned and developed large and small self-storage facilities, engaging in all aspects of development and operation.

Prior to joining Commercial Realty, she was a financial controller for asset portfolios valued at more than $35 million for several industries, including self-storage, retail sales, call centers, timber companies and real estate development, according to a press release.

Sauls has a bachelor’s degree in accounting from the University of West Georgia, and is a Certified Commercial Investment Member candidate.

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

The BSC Group LLC, a commercial real estate mortgage brokerage and advisory firm specializing in self-storage, has promoted Stephen Lee to senior vice president. His primary responsibility will be to source capital-markets debt products for a range of commercial real estate asset classes, including multi-family and self-storage. He’ll continue to serve clients in Chicago and Milwaukee.

“We are delighted with the professional growth we have witnessed during the four years we have worked with Stephen,” said company principal Devin Huber. “Stephen has a proven ability to structure market-leading executions for our clients, and his vast knowledge of debt products is an asset to the BSC group and its clients.”

During his tenure with BSC, Lee has closed more than $120 million in senior-debt transactions, with a primary focus on nonrecourse loan products for multi-family borrowers. In addition, he’s financed an array of other asset classes that include office, retail and industrial as well as some nontraditional types.

Lee is an active member of Lincoln Park Builders, Real Estate Investors Association, Southside Builders Association and Urban Land Institute. He holds a bachelor’s degree in real estate and finance from DePaul University.

Formed in 2009, BSC offers financial and loan advisory, mortgage brokerage and loan-workout solutions to commercial real estate property owners and investors, with a special emphasis on the self-storage market. Through its capital source network, it provides clients with access to debt and equity financing for commercial real estate investments nationwide.

Source:
PR.com, Self-Storage Financing Advisor The BSC Group Promotes Stephen Lee to Senior Vice President

 

President Donald Trump recently signed a tax-reform bill into law that provides the most significant U.S. tax changes since the Tax Reform Act of 1989. While self-storage owners will continue to enjoy many of their previous tax-relief advantages, some significant changes could affect their situation. This article highlights some of the key opportunities and modifications of the new law to help you stay informed.

1031 Exchanges

Self-storage owners often use 1031 exchanges when selling their assets to defer certain tax liabities. This strategy can greatly help investors grow their assets in the long term. Moving forward, they’ll continue to benefit from similar transactions. This new law limits 1031 exchanges to real property, referred to as real estate. In turn, this means exchanges of personal property, collectibles, aircraft, franchise rights, rental cars, trucks, heavy equipment and machinery, among others, will no longer be permitted for the 2018 tax year.

Depreciation

The new tax law allows self-storage owners to deduct interest on their real estate loans. Those who choose to claim this deduction will now have to increase the depreciation period for their assets. If you do claim the mortgage-interest deduction, the depreciation schedule for commercial properties increases from 39 to 40 years. If you don’t take the deduction, the depreciation period remains unchanged from the current 27.5-year schedule. You may still elect to perform a cost-segregation survey to carve out and accelerate five-year and 15-year properties.

The new law also includes provisions for bonus depreciation of capital expenditures, which would allow you to fully expense certain items. Section 179 of the new law provides the opportunity to expense up to $1 million for business assets, including furnishing, HVAC, roofing and security systems for nonresidential properties. The deduction phases out after $2.5 million.

Longer depreciation schedules can have a negative impact on the return on investment. Owners will need to consider these longer schedules if they elect to use the new exception to the interest limit. The self-storage industry is among the niche real estate segments that Section 179’s depreciation rules will favor.

Holdings

Those of you structuring your holdings via pass-through entities such as limited-liability companies (LLCs) will receive a 20 percent deduction on qualified income. This applies only at the entity level. Furthermore, it can only be applied to a property held at the end of a taxable year. Income from trusts, estates and real estate investment trust dividends are also eligible.

Another boon for owners at the holding entity level can be witnessed in the reduction of the maximum tax rate from 35 percent to 21 percent. Some of these provisions will be phased out within the next five years.

Individual Tax Rates

The new tax law also has provisions dealing with individual tax rates. The total number of brackets remains unchanged at seven; however, the income span for each has been modified, while marginal tax rates have been reduced, which has nearly doubled the standard deduction for single and married filers. On the estate-planning side, the tax law doubles the exclusions for single filers as well as married couples to $11 million and $22 million for estate taxes, respectively.

Capital Gains

An important change for more active investors who may make opportunistic sales or flip a property has also occurred. Those looking for capital-gains treatment of their assets will see the required hold period increase from a year and a day to three years. This will certainly change the business model for some investors who look for quick-turnaround, value-add opportunities. This change could slow the quantity of sellers as developers choose to hold assets for longer periods rather than sell at Certificate of Occupancy or during lease-up.

While the capital-gains hold period may slow some sales, the newly introduced, 20 percent deduction on income from pass-through entities could invigorate self-storage investments—and real estate in general. On an after-tax basis, the yields offered by the sector will be even more compelling than under previous tax structures. New capital could enter commercial real estate through syndicators and investment funds that are structured to capitalize on the pass-through advantages; but some new self-storage investors will enter the market with direct acquisitions. The additional capital will undoubtedly flow across a variety of property types, including self-storage.

Overall, there are many advantages available to self-storage owners to help minimize their tax burdens. Whether they continue to apply deduction on interest and depreciation or employ the benefits of pass-through income from LLCs, these opportunities present considerable to save money over the lifetime of ownership.

Michael Mele is senior managing director of investments for Marcus & Millichap, a commercial property-investment firm. Over the past six quarters, he and his team have helped their clients close 71 transactions in 19 states, totaling more than $560 million. Since joining the company in 1999, he’s closed more than 300 self-storage transactions and has a national client list of 3,500-plus investors. For more information call 206.826.5700; visit www.marcusmillichap.com. 

Stor-Age Property REIT, which operates self-storage facilities in South Africa and the United Kingdom, has acquired All-Store Self Storage Pty. Ltd. in Cape Town, South Africa, for R52M. The property comprises 5,500 square meters of rentable space. Positioned on a busy intersection with high visibility, it serves the areas of Belville, Brackenfell and Kuils River. The property also has room for expansion, according to the source.

Stor-Age has been interested in buying the facility, which opened in 2006, for seven years. "We first met the seller seven years ago and expressed an interest in buying them out,” Stor-Age CEO Gavin Lucas told the source. “We’ve positioned ourselves as a viable exit option for private developers of storage assets. We understand how to price the assets across the market."

Elsewhere in South Africa, Stor-Age is nearing completion on a new property in Bryanston and recently began construction on a facility in Randburg.

Headquartered in Cape Town and established in 2006 by the Lucas family, Stor-Age operates a 68-property portfolio, primarily in four South African metropolitan areas, that comprises approximately 392,500 square meters. It’s the operator appointed by Stor-Age Property Fund Managers Pty. Ltd. to manage and market the property portfolio owned by Stor-Age Property Holdings Pty. Ltd., and was listed on the Johannesburg Stock Exchange in November 2015.

Source:
BusinessDay, Stor-Age expands Cape operation