Update 4/2/15 – Jernigan Capital has closed the IPO offering of 5 million shares of its common stock, the company announced yesterday in a press release. All shares, priced at $20, were offered by the company.

A registration statement relating to the securities was declared effective by the Securities and Exchange Commission on March 26. A copy of the final prospectus related to the offering is available through Raymond James & Associates Inc., which served as the book-running manager for the IPO, according to the release.

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3/30/15 – Jernigan Capital announced last week it would price its March 27 IPO at $20 per share. The company initially indicated it would offer 5 million shares between $19 and $21 in its effort to raise $100 million. The commercial real estate finance firm also granted underwriters a 30-day option to purchase up to 750,000 additional shares of common stock at the IPO price, according to a press release.

The shares began trading on the New York Stock Exchange on Friday, under the ticker symbol “JCAP.”

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3/16/15 – Jernigan Capital LLC, a merchant bank and advisory firm serving the self-storage industry, will hold an initial public offering (IPO) on March 27 in an effort to raise $100 million. The company will issue 5 million shares at $19 to $21 per share and have a market cap of $105.2 million, according to the source. Baird, Raymond James Financial Inc., and Wunderlich Securities Inc. served as underwriters for the IPO.

“We intend to originate a diversified portfolio of development, acquisition and refinance loans secured by self-storage facilities primarily in the top 50 United States metropolitan statistical areas, or MSAs, as delineated by the U.S. Office of Management and Budget,” Jernigan Capital officials said in the IPO filing. “We believe these attractive opportunities exist due to excellent long-term self-storage industry fundamentals, significant demand for loans secured by self-storage facilities, and reluctance of commercial banks and other traditional lenders to loan money on acceptable terms to finance self-storage facilities.”

Jernigan Capital is led by president and founder Dean Jernigan, the former CEO of self-storage real estate investment trust CubeSmart. Jernigan launched the finance company in January 2014. He has more than 30 years of industry experience, having founded Storage USA Inc. in 1984. In 2006, he became CEO of U-Store-It Trust Inc., which changed its branding to CubeSmart in fall 2011. He officially retired from the REIT on Dec. 31, 2013.

Headquartered in Miami, Jernigan Capital provides loans in markets across the United States. Its senior staff has participated in more than $6 billion of self-storage transactions over the past 30 years.

The owners of a former plastics plant at 2020 Greenwood St. in Evanston, Ill., have applied to convert the building into self-storage. The proposal is under consideration by the city’s Design and Project Review Committee.

The former Spartech Corp. factory ceased operation in 2013 when the company was acquired by Poly One Corp., which subsequently closed six facilities.

The existing structure is approximately 85,000 square feet and sits on 3.5 acres. There’s room on the lot for an additional 20,000-square-foot building, according to a listing on the real estate website LoopNet.com. The listing also indicates the zoning for the lot could be changed for residential use.

A similar conversion project is under development about a block away at the corner of Hartrey Avenue and Greenwood Street, according to the source.

Update 4/1/15 – Officials from Hongkong Storage and other invited speakers characterized the Hong Kong self-storage market as one poised for increased development during the company’s investment seminar earlier this week.

The barrier for entry for industrial-building investments in Hong Kong is less than that for residential properties, with an average rate of $3,000 to $6,000 per square foot, according to Diamond Shea, chairman of the Hong Kong Owners Club, a community organization. With plenty of unused industrial properties available in the region, the current market reflects that “local proprietors are not fully grasping the industrial-building investment potential and overlooking other development possibilities,” Hongkong Storage officials said in a press release.

The availability of industrial property in Asia is peaking as spending power among the middle class is growing, according to Luigi La Tona, executive director of Self Storage Association Asia, who also spoke during the event. As middle-class income has grown, the size of living quarters has gradually become smaller, increasing a need for self-storage, he said.

To help entice potential investors, Hongkong Storage announced it is launching a new plan for its third-party property-management service called the Self Storage Management Agreement. Under the framework of the service, “Hongkong Storage will take full responsibility in designing storage rooms, interior decorating, sales service, customer service and operations management,” according to the release.

Louis Chung, managing director of Hongkong Storage

Louis Chung, managing director, (left) and Bobby Chung, chairman, of Hongkong Storage

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3/18/15 – Hongkong Storage, a self-storage operator offering traditional and valet-style storage services to the Hong Kong region, will host a seminar on March 30 titled "Essential Elements of Strategic Investment in Industrial Properties & Self Storage in Hong Kong." The event will focus on strategic property management and investment including an examination of market potential, supply and demand, regulations, and development best practices, according to a press release.

The presentation will also cover third-party management and its benefit to property owners, as well as the potential for generating additional revenue through innovative equity partnerships, company officials said.

The event will be split into two sessions, with the first discussing strategic-management services. This portion will be presented in Cantonese by Louis Chung, director of Hongkong Storage. The second portion focusing on investment channels and returns will be presented by Bobby Chung, company chairman. His presentation will be in English and supplemented in Cantonese and Putonghua (Mandarin).

The seminar will be held in the Shantung Room at the Langham Place Hotel in Mongkok, Kowloon. Participants can register to attend either or both sessions.

In addition, Luigi La Tona, executive director of Self Storage Association Asia (SSAA), will speak during a media session on self-storage industry practices and the business concerns of storage-property owners, according to the release. SSAA is a trade association dedicated to assisting self-storage operators and industry suppliers working in emerging markets along the Pacific Rim.

Founded in 1997, Hongkong Storage operates 15 self-storage facilities in the Hong Kong region and also offers valet-style pickup and delivery services through its Yes-Storage program.

The Inside Self-Storage Store, an e-commerce website providing research and education products for industry professionals, is now offering two new reports produced by the Self Storage Industry Group (SSIG) of commercial real estate firm Cushman & Wakefield: the Self-Storage Expense Report 2014 and the Self-Storage Market Conditions Report 2014. Both digital products are available on demand at www.insideselfstoragestore.com.

The eight-page Expense Report provides a sample of real costs per square foot for fixed and variable operating expenses and presents the data nationally and by NCREIF (National Council of Real Estate Investment Fiduciaries) region and subdivision. Data is analyzed using nine key expense categories: administration, advertising, insurance, offsite management, onsite management, repairs and maintenance, taxes, utilities, and miscellaneous. The report is $100.

The eight-page Market Conditions Report, also $100, examines the supply and demand conditions in the top 50 U.S. Metropolitan Statistical Areas (MSAs) to determine whether they are under supplied, at equilibrium or over supplied. Each market is organized by the conclusion of its market conditions and compared to a rent and occupancy index. Development information identifying new builds and renovations/additions is also included for each MSA. Its sample size of 9,156 facilities is an increase from the 2013 report and represents an estimated 50.7 percent of total supply of the MSAs.

Several other Cushman & Wakefield products are available through the ISS Store including quarterly Metropolitan Statistical Area Reports and monthly National Rental Activity Reports. Self-Storage Performance Quarterly Reports, which offer in-depth market data on a national level, are available individually or as an annual subscription. Details can be found on the website.

Cushman & Wakefield advises and represents clients on all aspects of property occupancy and investment. The firm's Valuation & Advisory Division, which includes the SSIG, is one of the largest real estate valuation and consulting organizations in the world. Founded in 1917, the company has 253 offices in 60 countries and more than 14,000 employees. It offers a complete range of services for all property types including leasing, sales and acquisitions, debt and equity financing, investment banking, corporate services, property management, facilities management, project management, consulting and appraisal.

Conceived as a central hub that allows self-storage owners, operators, developers and investors to obtain cutting-edge information and resources, the ISS Store is owned and operated by ISS, a dynamic services provider that has served the self-storage industry for nearly 25 years. The brand includes ISS magazine, the ISS Expo and Self-Storage Talk, the industry’s largest online community.

US Storage Centers Inc. (USSC), which operates more than 85 self-storage facilities in 13 states, has acquired a self-storage facility in Winter Park, Fla., the company’s eighth in the state. The property at 7000 Aloma Ave. encompasses 74,375 square feet of storage space in 753 units. The ground-floor units are accessible via concrete drive-up aisles. The facility also has electronic-gate access and video cameras.

“We’ve seen some great results with our storage facilities in Florida, and we’re excited about the opportunity ahead of us to increase occupancy and revenue,” said Howard Pryor, regional director of operations.

Last month, USSC purchased Hickory Hill Self Storage in Memphis, Tenn., for $3.4 million from Hickory Hill Self Storage LLC. The property features 89,370 square feet of storage space on 7 acres.

Irvine, Calif.-based USSC is a real estate investment company that acquires, develops and operates self-storage facilities as well as provides third-party management services. The company is affiliated with Westport Memphis Self Storage LLC and Westport Properties, a full-service real estate company specializing in self-storage facilities.

By Rachel M. Hartman

Reprinted with permission from "The Storage Facilitator" blog.

The basics of running a self-storage facility might sound easy. Dig a little deeper, however, and there are many bumps that can come up in the road. If these obstacles aren’t correctly handled, they can hurt your business. Below, industry experts share six common mistakes facility operators should avoid.

No. 1: Failing to Rent Units Over the Phone

It can be easy to view incoming calls as merely a way to answer questions. Instead, ask for the sale. “You can rent just as many units over the phone as you can to walk-in customers,” says Marc Goodin, president of Storage Authority Franchising, which provides a self-storage franchising opportunity for the Storage Authority brand.

Include a spoken tour of the facility during your conversation. Highlight the place’s best features, such as its convenient location or safety measures. When you rent over the phone, get all of the client’s information and take a full credit card payment. Then set up a time when the person can come to your office to complete the paperwork.

No. 2: Overlooking Your Facility’s Appearance

Visibility and curb appeal go a long way, says Jim Chiswell, managing partner at Chiswell & Associates LLC, a self-storage consulting firm. Take a walk around your property and evaluate the landscaping. Make sure the office is clean, bright and welcoming.

In addition, check the location of your office. You’ll want it to be in a spot where customers can simply walk in rather than have to pass through a security gate first. Be sure your facility’s sign is visible at night so motorists can catch a glimpse of your place in the evening.

No. 3: Failing to Update Insurance Coverage

When it comes to the value of the building, the coverage on the insurance policy often isn’t enough to replace the building after a fire or other loss, says Diane Vizzo, owner of Hillcrest Agency LLC, an independent insurance agency in Connecticut. One way to avoid this is to review your policy before renewing it. “Make sure you understand the coverage,” Vizzo says. If you don’t, ask your insurance agent to break it down. Also, revisit your insurance policy after any major improvements to your property. Some of the changes might require you to boost the amount of coverage.

No. 4: Ignoring Security Issues

It’s important customers feel safe at your facility, Chiswell says. If you have two floors, for instance, you might allow only those tenants who have units on the second level to use the elevator. In addition, maintaining a solid presence can make it easier to spot and resolve security matters. For instance, if a manager remains at the facility after dark, he might notice a particular customer who shows up every evening and stays in a unit for hours before leaving.

No. 5: Avoiding In-Person Sales

“You have to be a salesperson to be in self-storage,” Goodin says. Although you don’t need to become a sales guru, you’ll want to nail down the basics to run a successful facility.

Starting can be simple: Greet current and potential customers when they come in, Goodin says. “Shake hands. It makes a difference.”

Learn a person’s name if you don’t already know it and use it in conversation. Then look for something about the person that you genuinely enjoy or have in common, such as a local sports team.

Finally, ask for the sale in person. When you’re finished giving a tour of the facility or answering questions posed by a visitor, find out whether he’s interested in renting a unit.

No. 6: Failing to Make It Personal

The most important asset of any facility is the people on the other side of the counter who work with customers, Chiswell says. Potential clients often are going through a difficult time, such as a move or a divorce. “If your management style is set up to solve their problems, the units will take care of themselves,” he says.

Rachel M. Hartman is a freelance writer who contributes regularly to the SelfStorage.com and SpareFoot.com blogs.