Update 6/17/21 – RCG Stein, the joint venture between RCG Ventures LLC and Stein Investment Group, had its rezoning proposal unanimously approved by the Massillon, Ohio, City Council. The change from general-business to light-industrial use on a 7-acre section of the northern portion of the former Kmart site on Lincoln Way was necessary for the self-storage component of the mixed-use project. RCG Stein is in the process of acquiring most of the 11.7-acre site from Pittsburgh-based Kamin Realty Co., though Kamin will retain a small portion at 27th Street N.E. and Lincoln Way for which a small grocery store is planned. The Kmart has been vacant since November 2017.

RCG Ventures is a privately funded investment group that acquires and develops commercial real estate. Family-owned and -operated Stein owns or manages 22 Space Shop Self Storage facilities in six states.

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3/24/21 – The global self-storage development pipeline continues to be extremely dynamic. Inside Self-Storage regularly covers new projects being planned and approved as well as zoning and other municipal issues. Following is additional activity taking place in March 2021.

All Purpose Storage Bennington LLC and Patriot Holdings LLC are converting a former drive-in movie theater in Bennington, Vt., to self-storage. The development-review board approved the design and site plan last month for the property off Northside Drive, which is owned by Diane Allard and Karen Post. The joint venture hopes to close on the purchase next month. Expected to break ground this summer, the project will include seven buildings comprising 61,400 square feet in 400 units, according to Tim Wilkins, an owner and project manager with Las Vegas-based Patriot. Construction is estimated to cost $2.7 million. Based in Keene, N.H., All Purpose operates more than 24 self-storage facilities comprising more than 700,000 square feet throughout New England.

Baranof Holdings LLC is building a new self-storage facility in the Kakaako neighborhood of Honolulu, its first development in Hawaii. The five-story structure on Queen Street will comprise 91,190 square feet of rentable space in 1,631 units. It’ll also include a single-story leasing office and 12,760 square feet of ground-floor retail space. The project is on the site of a former Discount Storage. Baranof signed a 60-year ground lease in 2018 with Hawaiian Securities & Realty LLC. It has four other facilities under construction in Los Angeles, New York, San Diego and San Francisco. Based in Dallas, Baranof develops, builds and acquires self-storage properties nationwide, and operates 10 facilities in California, North Carolina, Oregon, Texas and Washington.

Broadway Village LLC, Goldstein Land Trust and Storage Five Pekin LLC received site-plan approval for a self-storage facility they intend to build in Pekin, Ill. The 1.24-acre property at 1111 Broadway St. has been vacant for decades and is currently being used as a parking lot. The council also approved a parking variance to reduce the number of required parking spots from 41 to 13.

Darme Holding Co., doing business as Watsonville Self Storage LLC, intends to build a facility on 4.4 acres in Watsonville, Calif. The property at 75 and 80 Neilson St. will comprise 150,160 square feet in 1,137 units, some of which will be earmarked for boat/RV storage. The project includes four buildings and a manager residence. It’s expected to be complete by early spring 2022. Represented by Don Reimann, executive vice president at Colliers International, Darme recently acquired the property from Seagate Technology LLC. Company CEO Ted Crocker began building self-storage in the early 1970s under the Crocker’s Lockers brand, which has developed more than 50 projects in Arizona and California.

DG Properties is converting a former grocery store in Merrillville, Ind., to self-storage. The town council approved a variance with a 5-2 vote, allowing the project to move forward on property the company owns at 73rd Avenue and Taft Street. Plans include renovating the 67,000-square-foot building into climate-controlled storage. The initial phase will cost about $1.5 million, according to Merrillville Planning and Building Director Sheila Shine. A $1 million second phase will add drive-up units.

Holland House Holdings received approval to build a mixed-use project in Farmington, Wis., that’ll include an office building and self-storage. Plans for the 4.7-acre property at 277 E. Main St. include building five storage structures ranging from 7,170 square feet to 12,000 square feet. Two will be climate-controlled. The facility will also offer vehicle storage. The office building will occupy less than acre and comprise about 10,000 square feet.

Hwy 56 Storage Ranch opened in Savoy, Texas. The first phase of the property at 8280 TX-56 comprises 41,000 square feet of drive-up and vehicle storage. Phase two, expected to open this spring, will add climate-controlled units. The facility is locally owned.

Keating Resources opened two The Hills Self Storage facilities in Custer and Spearfish, S.D., using buildings that had been vacant for more than two years. The 3-acre property at 1135 Mount Rushmore Road in Custer was converted from a Shopko retail store. It comprises 26,000 square feet. The 6-acre property at 125 Industrial Drive formerly housed Polaris Inc., a manufacturer of motorcycles, ATVs and snowmobiles. The 52,000-square-foot building fronts Interstate 90. Keating Resources is owned by Gerard Keating and his son, Alec Keating. With offices in Atkinson, Neb., and Dallas, the company invests in real estate assets of all types.

Landvest Corp., a property-management firm specializing in self-storage properties, opened Security Self-Storage in Atlanta. The multi-story facility at 1555 Memorial Drive S.E. is entirely climate-controlled. Founded in 1985 and based in Wichita, Kan., Landvest manages a portfolio of more than 50 self-storage facilities in six states. Its portfolio comprises about 2.8 million square feet.

The Woonsocket, R.I., City Council agreed to sell a former baseball field to real estate company North Star Management, which intends to develop self-storage at the vacant site. North Star bid $749,000 for the former Ayotte Field at 777 Providence St. Though Mayor Lisa Baldelli-Hunt doesn’t believe self-storage is the best use for the property, the council opted for the higher of two bids. The North Star project is one of two self-storage projects being pursued in the city. An unidentified private developer also intends to build a facility on 6.5 acres at 153 Hamlet Ave., which previously housed the French Worsted Mill. The site has been vacant since 2012 when the pre-existing structure caught fire.

Peak Management LLC is developing a YourSpace Storage facility in York Township, Pa. The property on Cape Horn Road will comprise 1,008 units. It’ll be part of a larger mixed-use project being developed by affiliate Hill Management Services Inc. that includes a Burger King and Mavis Discount Tire. YourSpace is expected to open next summer. Based in Nottingham, Md., Peak is a full-service property management company that specializes in the development, construction, management and ownership of multi-family and self-storage properties. YourSpace operates nine locations in Maryland and one Delaware.

Shurgard Self Storage Europe SARL, the European affiliate of U.S.-based real estate investment trust Public Storage Inc., received a building permit to develop a new facility in Cologne, Germany. Expected to open in 2022, the building will comprise 6,000 square meters in more than 800 units. Shurgard operates 244 self-storage facilities comprising 1.2 million net rentable square meters in Belgium, Denmark, France, Germany, The Netherlands, Sweden and the United Kingdom.

U-Haul is converting a former Shopko store in Winona, Miss. The company opened a temporary showroom on the 10.22-acre property at 405 Cottonwood Drive while it renovates the 84,540-square-foot building. Expected to be complete this summer, it’ll offer climate-controlled storage and additional U-Haul products and services.

West Coast Self Storage Group (WCSSG) opened a new facility in Burien, Wash. The property at 1625 S.W. 114th St. comprises 103,870 rentable square feet in 1,000 units and 34 uncovered RV spaces. Headquartered in Everett, Wash., WCSSG is a property-management, acquisition and development company. It operates 78 managed and owned locations in California, Oregon and Washington.

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3/11/21 – The global self-storage development pipeline continues to be extremely dynamic. Inside Self-Storage regularly covers new projects being planned and approved as well as zoning and other municipal issues. Following is activity taking place in March 2021.

All American Self Storage is building a new location in Trussville, Ala. The two-story, 50,000-square-foot building will be behind Frank Johnston Drive, near the Trussville Crossings Shopping Center. The operator plans to break ground next month. All American operates six facilities in Alabama and Georgia. The family-owned business was founded in 1984.

Andover Properties LLC, which operates the Storage King USA brand, completed expansion projects at two properties in Florida and one in Mississippi. The project in Polk City, Fla., added 27,300 square feet of unit space, 6,000 square feet of flex space, and 63,200 square feet of covered and open RV parking. The expansion in Spring Hill, Fla., comprised 55,000 square feet of storage space along with 72,000 square feet of flex space and covered and enclosed RV storage. In Ocean Spring, Miss., the company added 40,000 square feet of climate-controlled space and 35,400 square feet of covered and open RV parking. Founded in 2003 and based in New York City, Andover owns or manages 71 self-storage facilities in 16 states, totaling more than 5.3 million rentable square feet.

Arcland Property Co., a Georgetown, Washington, D.C.-based real estate development and investment company, has opened a four-story self-storage facility as part of a mixed-use project in Haymarket, Va. The structure at 15345 John Marshall Highway comprises 97,600 square feet. It’ll be managed by Self Storage Plus, a Washington, D.C.-based company with 49 properties in Maryland, the Virginias and the District of Columbia. Built on 12.46 acres, the mixed-use project also will include a quick-service auto repair, a convenience store and other retail uses. Arcland specializes in self-storage in the Baltimore and Washington, D.C., areas.

Baseline Self Storage received approval to move forward with its project on a 10-acre parcel in Roseville, Calif. The plans by developer Jas Bains, president of Dominus Cos., include a 225,000-square-foot self-storage facility at 5750 Baseline Road. The first phase will contain 100,000 square feet of storage, 94 vehicle-storage spaces, a 1,364-square-foot office and a 1,452-square-foot manager’s residence. Additional phases would replace the vehicle parking with storage buildings. Construction is expected to begin by the end of the year.

Blue Sapphire Self Storage opened in Rahway, N.J. The multi-story facility at 2225 Elizabeth Ave. is near the New Jersey/New York state border and accessible via U.S. Route 9. It comprises 52,485 square feet of rentable space in 403 units. Owned by Ramani Group, a real estate development, construction and property-management firm, it’ll be managed by Storage Asset Management, a property management and consulting company.

FivePoint Capital Management completed construction on Calhoun Avenue Storage in Houston. The four-story building comprises 126,000 square feet in 997 units, plus an interior drive aisle and 1,000-square-foot sales office. It’ll be managed by real estate investment trust (REIT) CubeSmart and branded under its name. It was designed and constructed by ARCO/Murray Design Build. Preston Brown was the project manager and Paul Ryan was the project superintendent.

Grand River Old 23 LLC received zoning approval to build a self-storage facility in Brighton, Mich. The parcel at 9984 E. Grand River is owned by Steve Samona and was previously zoned general business. The city and county planning commissions support the project, said Brighton Township Planner Kelly Mathews.

Granger Development opened a new climate-controlled self-storage facility in Pensacola, Fla. The property at 2041 W. Nine Mile Road features an interior drive-through. It’ll be managed by REIT Extra Space Storage Inc. Founded in 1999 and based in Pensacola, Granger specializes in commercial real estate acquisitions and development. Its interests include office, residential, retail and self-storage.

Hampshire Real Estate Cos., a private real estate investment firm and self-storage operator, opened a new facility in Perth Amboy, N.J. The property at 900 State St. comprises 94,600 square feet in 697 units. It is managed by Extra Space and branded under its name. Based in Morristown, N.J., Hampshire has developed 42 self-storage facilities since 2012 with a value of more than $608 million.

Commercial real estate developer Hernandez Group completed construction on a four-story self-storage facility as part of a mixed-use development in Fort Lauderdale, Fla. Built on 1.78 acres at 2427 W. Broward Blvd., the building comprises 130,852 square feet in 970 units, plus 5,168 square feet of ground-floor retail space. It’ll be managed by Extra Space. The development is in partnership with JL Capital and Management, Merrimac Ventures, and Stiles. South Florida-based Hernandez acted as construction manager and development partner on the project. JL Capital specializes in business management as well as real estate brokerage and development services. Based in Fort Lauderdale, real estate firm Merrimac specializes in value-add investment and development opportunities primarily in South Florida. Stiles, a full-service commercial real estate firm specializing in projects in the Southeast, will handle leasing efforts for the retail space.

Real estate developer Ivy Hill Section I LLC intends to build a four-story self-storage facility in the Ivy Hill neighborhood of Newark, N.J. The project would comprise 121,828 square feet of floor area at the corner of Irvington Avenue and Manor Drive. The developer intends to split the property into two parcels, with one dedicated to the storage facility and the other to preserve parking and refuse uses for the neighboring Ivy Hill Park Apartments complex. The applicant is seeking multiple variances. The Newark Zoning Board of Adjustment was scheduled to review the project during a special meeting on Monday.

REIT Life Storage Inc. intends to expand its facility at 2790 and 2802 Transit Road in West Seneca, N.Y., which currently houses a mixture of single- and two-story buildings. The project would add a three-story, 34,584-square-foot building comprising 216 units and 53 vehicle spaces to a 4.6-acre portion of the property currently used for outdoor vehicle storage. It’d be positioned at the rear of the property, along Dyke Road. The company received approval for the project in 2016 but didn’t pursuit it due to the economy, according to senior project manager Rich Pasternak. The West Seneca Planning Board is scheduled to review it today. Based in Buffalo, N.Y., Life Storage operates more than 900 self-storage facilities in 31 states and Ontario, Canada. Its portfolio of owned and managed facilities comprises more than 67.7 million square feet.

Lock Up Storage opened its fourth location, in the Cornubia Mall in Umhlanga, South Africa. The facility was built in a portion of the mall’s basement parking area. It was designed using several 40-foot shipping containers, converting each into two, 20-square-foot units with drive-up access. It also offers fabricated 30-square-foot units with walk-up access. Owner James Visser indicated he plans to replicate the installment at other malls. Lock Up operates three other self-storage locations in the KwaZulu-Natal province.

Loreto Development Co. is developing a mixed-use project in Perry, Ohio, that’ll include townhomes and self-storage on a 20.5-acre parcel near the Hidden Village residential subdivision, which it also owns. The 2.5-acre storage portion will contain five buildings. It’ll be east of the townhomes, between Maple Street and railroad tracks. The planning commission has approved the preliminary application and construction could begin this fall, according to company president Loreto Iafelice.

LSC Development LLC opened a new self-storage facility in Flushing, N.Y. The three-story structure at 34-12 Collins Place comprises 157,500 square feet in 2,874 units. It includes three elevators and five drive-in bays. The property will be managed by Life Storage. Based in Barrington, Ill., LSC specializes in industrial parks, office complexes and self-storage facilities. Its portfolio and development pipeline comprise more than 2.7 million square feet.

NitNeil Partners, a real estate investment firm that acquires and develops self-storage facilities, is building a project in Stone Mountain, Ga. Slated to open in November, the property at 5636 Redan Road will comprise 70,750 rentable square feet in 650 units. NitNeil's portfolio consists of 1.6 million square feet across 11 states.

RCG-Stein, a joint venture between RCG Ventures LLC and Stein Investment Group, is looking to convert a former Kmart building in Massillon, Ohio, to a mixed-use project that’ll include office space, restaurants, retail and self-storage. Plans for the 11-acre property at 2600 Lincoln Way E. include retrofitting the 105,000-square-foot building into self-storage and developing separate parcels across the parking area for other uses. The Massillon Planning Commission was expected to discuss the company’s request for a zoning change at its meeting this week. RCG Ventures is a privately funded investment group that acquires and develops commercial real estate. Family-owned and -operated Stein owns or manages more than 23 Space Shop Self Storage in six states.

Rick Ramsey, co-owner of A-Metro Self Storage, is converting a former bingo hall in Schenectady, N.Y. Ramsey purchased The Schenectady Bingo Palace at 1866 State St. for $1.9 million and will spend about $300,000 to add 300 climate-controlled units to the 30,000-square-foot building. He also plans to build another 15,000 square feet of storage on the property’s parking lot. Ramsey also purchased the adjacent Freihofer Bakery Outlet at 1874 State St. and three parcels behind the bingo hall that face Albany Street. Two are vacant lots that’ll be converted to vehicle storage. The third houses a residence occupied by a tenant. A-Metro operates five New York facilities. It’s owned by Ramsey, his wife, Kim, and son, Christopher. The family also owns Liedkie Moving & Storage and Metro Movers.

Self Storage Plus opened a new location in Washington, D.C. The four-story building at 5901 Blair Road N.W. comprises 105,000 gross square feet of storage space. Co-owned by Adler Financial Group and Lock 7 Development LLC, the structure is built to Leadership in Energy and Environmental Design standards, with a green roof and solar array.

Stein Investment Group is seeking approval to convert a former AT&T office building in Livonia, Mich. Plans for 31100 Plymouth Road call for dividing the property into two, with 700 interior, climate-controlled units built inside the structure and leaving the vast parking lot on the eastern side of the site open for future development. Following the planning commission’s unanimous vote, the project will next be presented to the city council.

True Storage Bangor LLC is developing a two-story, 39,150-square-foot facility at 668 Stillwater Ave. in Bangor, Maine. The $4.1 million project is on a former Circuit City electronics retail location that closed in 2009 when the chain went bankrupt. The building was demolished in 2017. True Storage is an affiliate of Manchester, N.H.-based real estate firm Brady Sullivan Properties.

Phoenix-based U-Haul International Inc., which operates more than 1,700 self-storage facilities across North America, intends to develop a six-story facility next to an existing truck-rental center in Fort Lauderdale, Fla. The facility at 1800 W. State Road 84 would comprise 132,984 square feet in 1,027 units. The city’s development-review committee was scheduled to evaluate the $8.2 million project on Tuesday. Fiallo’s MEP Design Inc. designed the facility. Established in 1945, U-Haul operates more than 68 million square feet of storage space in North America.

The William Warren Group (WWG), a privately held real estate company that operates the StorQuest Self Storage brand, opened a new facility in Denver. The multi-story structure at 18815 E. 60th Ave. features solar power. It’ll also be part of the company’s partnership initiative with One Tree Planted, in which StorQuest plants one tree for every rental. The location is StorQuest’s 28th in the Denver metro area. Founded in 1994 and based in Santa Monica, Calif., WWG acquires, develops and manages more than 200 self-storage facilities in 16 states.

New Source:
IndeOnline.com, Zone Change Paves Way for Former Massillon Kmart to Become Indoor/Outdoor Storage Center

Previous Sources:
NWI.com, Town Approves Storage Facility Proposal
Newscenter, The Hills Self Storage Opens in Custer and Spearfish
Washington County Enterprise-Leader, Commission Approves Storage Unit Development
Bennington Banner, Self-Storage Facility Planned for Land Off Northside Drive
Digital Journal, Storage Units in Savoy, TX Are Newly Opened at Hwy 56 Storage Ranch Including Self-Storage, RV Storage, and Boat Storage
Pekin Daily Times, Despite Some Opposition, Pekin City Council Forwards Site Plan for New Storage Facility
PR Newswire, U-Haul Shares Plans for New Self-Storage Center in Winona
Pacific Business News, More Self Storage Coming to Kakaako
Patch, West Coast Self-Storage Highline Opens in Burien, WA
Penn Live, New Mavis Discount Tire and a Self-Storage Facility to Open in York County
The Valley Breeze, Ayotte Field, French Worsted Slated for Storage Units
Albany Business Review, Why This Self-Storage Business Bought a Schenectady Bingo Hall
Bangor Daily News, Storage Space Coming to the Former Circuit City Lot on Stillwater Avenue
Hometown Life, New Self-Storage Facility Planned at Vacant Office Building Along Plymouth Road in Livonia
IndeOnline.com, Former Massillon Kmart Site Targeted for New Restaurants, Offices, Self-Storage
Jersey Digs, Self-Storage Facility Could Come to Ivy Hill, Newark
Patch, New Self Storage Facility to Open in Trussville
Pensacola News Journal, ExtraSpace Storage Opens New Facility on Nine Mile Road
PR Newswire, Self Storage Plus Grand Opening of New Storage Facility in Washington DC
PR Newswire, Self Storage Plus Opens Brand New Facility in Haymarket, VA
PRWeb, Denver Gets More ‘Awesome’ with StorQuest Grand Opening
REBusiness Online, ARCO/Murray Completes 997-Unit CubeSmart Self-Storage Facility in Houston
ROI- NJ, Hampshire Cos. Opens Latest Self-Storage Facility in Perth Amboy
Sacramento Business Journal, West Roseville Sees First Self-Storage Project
South Florida Business Journal, U-Haul Plans Self-Storage Facility in Fort Lauderdale
The Buffalo News, Suburban Development Notes: Another Brewery, More Self Storage on Tap
The News-Herald, Loreto Development to Move Forward With Plans for Townhomes, Storage Units in Perry Village
Trussville Tribune, Self Storage Business Coming Soon to Trussville
WHMI, Rezoning Approved for Mini Storage Building

Financing a personal residence usually includes just two elements: the mortgage and your equity. Financing for commercial real estate, on the other hand, can be much more complex, involving several parties and a variety of structures. The full set of sources used to fund a project is called the “capital stack.” In fact, there are a number of instruments that can be a part of a self-storage transaction, some of which have become more popular in the last 15 to 20 years.

In the early stages of a project, the investor (or sponsor) will often seek a loan from a bank at the lowest possible interest rate, subject to underwriting requirements. They’ll also be required to contribute a certain amount of their own capital, to be counted as their equity in the investment. To meet the capital requirements and close the gap between the total forecasted project cost and the portion the bank will approve, the investor may wish to seek additional financing in the form of a secondary loan or additional equity from another source. This capital stack can be tailored to meet the requirements of the sponsor, project and additional investors.

Let’s focus on the four main components of the capital stack that you’ll most likely use when investing in a self-storage project. They are senior debt, mezzanine debt, preferred equity and common equity.

Senior Debt

Senior debt is secured by a mortgage or deed of trust on the self-storage facility itself. If the borrower fails to pay, thereby defaulting on the loan, the lender is entitled to foreclose and take the property title.

This reduces risk on the principal invested because, at worst, the lender owns the facility and will look to maximize value by selling the property or the nonperforming loan. The “cost” of this lower level of risk is a lower yield on the money loaned. Senior debt lenders (banks) will be entitled to a lower return than all higher positions in the capital stack; however, they also enjoy payment priority in first position.  

Senior-debt lenders underwrite the project and perform a thorough financial analysis to determine the sponsor’s (borrower’s) ability to service the loan. The debt-service coverage ratio and total leverage will play a major role, as will the experience and track record of the borrower.

Mezzanine Debt

Mezzanine debt is a secondary loan that bridges the gap between the senior lender and the equity. Mezzanine loans are usually priced two to three points higher than senior debt, and often carry heftier fees to originate and exit. They typically bring an additional 10% to 15% of capital to the stack, but rarely cover the remaining balance of capital needed to close.

In order of payment priority, mezzanine loans are positioned below the senior debt. In cases where the stack includes mezzanine debt and preferred equity, the former typically enjoys priority and, consequently, offers a lower rate.

Preferred Equity

Preferred equity and mezzanine debt fulfill similar functions in the capital stack: They’re forms of “bridge financing,” a method of fulfilling short-term capital needs to fill a gap between the debt and equity components of the overall project’s capitalization.

Preferred equity usually comes in the form of a fund or when several investors participate in a syndicated fashion through a Securities and Exchange Commission Regulation D instrument, such as a 506(b) or 506(c). Preferred-equity holders have a right to payments over common equity holders. That’s why they’re “preferred.” Because of this, as well as recourse they may have in the event of borrower default, preferred equity is considered less risky than common equity. Hence, the investor’s entitlement to upside may be capped.

Preferred-equity positions range from “hard” equity, which functions similarly to mezzanine debt and includes a fixed coupon and maturity date, to “soft” equity, which is more likely to include some of the financial upside if the project performs well. While hard holders may have the ability to make some decisions or remove the borrower if that person fails to make payments, soft holders typically have limited rights. As you’d imagine, the rate of return for hard preferred equity is similar (or slightly better) than mezzanine debt, while soft preferred-equity returns can be substantially better.

Common Equity

Common equity is the top of the capital stack. It’s the money the investor/borrower will be required by the lender or other equity investors to invest to have skin in the game.

Common-equity injections carry the greatest risk because the agreements entitle every other form of capital to be repaid first. However, if the property performs well, common-equity investors usually have no cap on their potential returns. In most projects, equity is typically structured so that all investors earn a preferred return until they hit a certain annual hurdle, say 8% or 10%. Beyond that, the sponsor/developer will earn a share of the profit (i.e., 40% of all remaining), while investors receive the balance of the pro-rated profit.

Though common equity generally has the highest risk and upside of the capital stack, not all investments are created equal with respect to risk/return profile. For example, many syndicators will offer a healthy preferred return to the equity partners in an effort to mitigate some of their downside risk and ensure their project gets funded.

Other Attributes

Other attributes of an equity investment can impact the attendant risk and potential upside. Some of them include:

• Capitalization rate: How conservatively is the exit (or going out) cap rate projected?
• Market: Generally, higher-profile markets like Los Angeles or Miami will offer more downside protection (less risk) but also less upside potential. This is because dense, affluent cities enjoy robust, diverse rental demand but are some of the most competitive real estate markets in the world. It’s no wonder that places like San Francisco become particularly appealing for global investors in times of economic volatility. Conversely, lesser-known secondary and tertiary markets may offer more growth opportunities and upside for commercial real estate investment, but greater risk due to less-established, less-diverse local economies.
• Business plan: Equity investments can offer an array of risk/return profiles based on the underlying strategy. The amount of capital expenditure needed, the complexity of the project, and the in-place rent roll and cash flow all impact risk and potential return.

Outlook

Understanding the various investment structures across the capital stack is critical when building your self-storage portfolio. The way in which you layer your equity and debt should depend on your overall goals and strategy, as well as your risk tolerance.

With the real estate market still facing a number of challenges as a result of COVID-19, diversification across investment structures and target-hold periods is all the more critical. The strain on credit markets may generate more opportunity for private lenders and, hence, senior and mezzanine debt opportunities,

After many years of a bull market, in which good-value equity investments became increasingly scarce, this massive disruption of the global economy will create a wide array of new opportunities across markets and the capital stack, as new debt and equity-capital needs emerge. For most investors, a diversified approach makes sense. For principals, the continued influx of new capital to self-storage across the stack has contributed to the sustained volume of acquisitions and new development thus far in 2021.

Scott Meyers, founder of Self Storage Profits Inc. and Kingdom Storage Holdings, has been involved in the self-storage industry as a developer, owner, syndicator and operator since 2005. He and his companies have bought, sold, developed and converted more than 2.2 million square feet of storage nationwide. His website, selfstorageinvesting.com, provides information, software and seminars to help people launch and grow a self-storage business. To reach him, email [email protected].

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Private-investment firm Crystal View Capital will close out Crystal View Capital Fund I LLC by the end of the year after selling the 21 properties it acquired. Launched in 2014 seeking $10 million in equity capital, the fund’s purchases included land, manufactured-housing communities, a “bolt on” office, retail and self-storage facilities. The last sale, A Mini Self Storage in Garland, Texas, closed on March 17, according to a press release.

The fund’s capital was fully deployed as of September 2017. Investors received a full return of capital during the third quarter of 2019, with the fund still holding $24 million in assets. The fund provided a cash-on-cash return of 143% and generated a gross internal rate of return (IRR) of 47.9% through March 31. It made a total of $34 million in distributions, the release stated.

A Mini sold for $3.8 million, generating a gross profit of $2.4 million. The IRR on the investment was 38.7%, according to the release.

“Given current market conditions, we have been strategically selling properties out of the fund over the last few years, in order to accelerate and maximize returns to our limited partners,” said Matthew Ricciardella, the fund’s founder, principal and managing partner.

Crystal View launched its third fund last November 2020 with an initial offering of $95 million. It is approximately 65% subscribed, the release stated.

Founded in 2014, Las Vegas-based Crystal View specializes in manufactured-housing and self-storage investments. Through its first three funds, the company has raised more than $90 Million of equity capital and currently has more than $150 million in assets under management, according to its website.

Source:
PR Newswire, Crystal View Capital Announces Completion of Crystal View Capital Fund I

Louisiana Gov. John Bel Edwards signed Senate Bill 101 (SB 101) into law on June 7, which will allow self-storage operators to advertise lien sales on online-auction websites instead of in a newspaper of general circulation. The measure also updates rental-agreement requirements regarding delinquency notifications. All changes go into effect on Jan. 1, 2022.

Beginning next year, self-storage rental agreements request that tenants provide two email addresses and a cell-phone number. Facility operators must also inform customers, either within the rental agreement or via verified mail, of the company’s right to enforce a lien. If this information is included in the lease, it must be in bold type at least 12 points in size, and the customer must initial next to the language when signing. If delivered by mail, the information must also be sent via email and text message.

When notifying delinquent tenants of an active lien, self-storage operators must send written notices via verified mail to the last known physical address on the rental agreement as well as by email (primary and secondary addresses) and text message, if provided on the lease.

Operators can still advertise a lien sale 10 days after notification is mailed to the tenant or at least 10 days after the payment deadline has passed, whichever is later. Though that timeframe didn’t change in the updated law, operators must wait 30 days to begin lien enforcement if the notice of lien rights was sent to the tenant via mail instead of included and acknowledged in the rental agreement.

The national Self Storage Association (SSA) recommends that operators update their rental contract well in advance of the law going into effect on Jan. 1, according to a June 14 newsletter emailed to members. The bill was supported by the SSA and the Louisiana Self Storge Association, which lobbied to eliminate the newspaper-advertising requirement.

The SSA represents about 22,000 U.S. and international member-affiliated self-storage facilities, according to its website. It’s allied with several state and international self-storage associations and has about 6,000 members.

Sources:
SSA Magazine Weekly 6/14/21, Amended Louisiana Lien Law Brings Change for Industry
Louisiana State Legislature, SB 101

It’s near impossible to run a self-storage business effectively these days without a strong internet presence and a robust facility website. In fact, the end goal for most digital-marketing campaigns is to increase your website visitors. More visitors ultimately mean more rentals. Luckily, there are a lot of ways to accomplish this.

One approach that often goes overlooked in self-storage is blogging. Adding a blog to your website and filling it with relevant content won’t only help you rank higher in online search results and push you ahead of the competition, it’ll boost your customer engagement. A blog allows you to create strategic content aimed at storage-related search criteria, which gives your facility more opportunities to appear in results for your target market. Let’s take a closer look at some blog-related strategies and ways to leverage your new engagement tool.

Keywords and Topics

The most important aspect to producing a self-storage blog is to ensure the content is rich in the right keywords. When deciding what to write about, ask yourself:

• Are these search terms (keywords) ones for which my target customers would look?
• Do I think my facility can reasonably rank for these terms?

The first question is the easiest to address. Most potential customers are looking for “self-storage space” or “self-storage near me.” Depending on your area, you can narrow your targets by adding words like students, businesses, residential, vacation, etc. Facilities that offer boat or RV storage or other kinds of specialty storage, like wine or records, can cast an even wider net.

Answering the second question requires some research. In Google, search your desired keywords to see what the competition looks like. If you see large companies like Medium, CNN, etc., dominating the top organic results, it may be best to choose something else. If, however, you see other storage facilities in the ranks, there’s a chance that if you produce a well-written article on that topic, you could appear on the first page of organic results.

The easiest types of blog posts to get Google to pick up are informational and list articles. In the examples below, the # sign is a substitute for a numeral. Thus, a blog headline could be something like:

• # Places in [Your City, State] that Offer Student Discounts
• # RV Dump Stations in [Your City, State]
• Moving to [Your City, State]? # Things You Need to Know
• Best Places to Live in [Your State]
• Top # Neighborhoods to Live in [Your City, State]
• How to Organize a Room With Too Much Stuff
• How to Organize a Garage on a Budget
• The Best Way to Pack China for Storage
• How to Pack Dishes with Bubble Wrap
• # Reasons You Might Need a Climate-Controlled Storage Unit
• # Things You Can Store in Non-Climate-Controlled Self-Storage

Who Should Be Your Blogger?

Ideally, your self-storage facility manager or assistant manager should be able to write articles in their down time. Managers are on the frontline. They know the customer base and what’s happening in the industry, which makes them ideal candidates.

Of course, not everyone has writing skills, and it can be intimidating to put words in a medium the public will read. If your manager or other staff member isn’t an option, there are many online channels that make it easy to find writers with experience in a variety of niches who are willing to produce content for a fee. The two most commonly used websites are Fiverr and Upwork. Keep in mind that you may need to review the work of a few candidates before finding one you can use routinely for your business.

Blog Placement

The absolute best place for your blog is on your website. An ideal URL is www.yourdomain.com/blog. From a search engine optimization (SEO) perspective, this works best because it keeps your domain front and center. It also makes it easy to navigate from the blog article to your other web pages.

Adding a blog to your website is a simple process and something any IT professional should be able to set up. WordPress is the most commonly used backend platform. It makes it quick and easy to add new content. When setting it up, make sure your Google Analytics tag is properly configured. If you use the URL format suggested above, Google Search Console will automatically pick up new posts, making it easy to analyze data down the line.

Publishing Frequency

Once you have your blog set up, you’ll need to decide how often to publish new content. This can vary depending on your goals and competition. If your facility is typically pretty full, publishing once per month will keep it looking alive for any potential tenants browsing your website. Twelve posts per year is pretty manageable. If you’re outsourcing and using WordPress, you can even hire them out all at once and schedule them to publish in advance.

Of course, there are times when posting more often makes strategic sense. Think of each blog post as a lottery ticket. Every time you publish a new article, it’s one more chance for Google to pick up your site and display it in the organic rankings for a particular term. In addition, one blog article can rank for a wide variety of searches, depending on topic. The more articles you publish, the more chances you have to get your website in front of viewers.

If you’re in a saturated market, it makes sense to increase your publishing frequency to twice each month or even weekly. The key is to monitor your results on Google. Just keep in mind that it takes time for new articles to rank. In fact, most SEO experts agree that it takes six to eight months for a new blog post to reach its maximum potential in Google rankings. Keep that value in mind, so you don’t get discouraged when content isn’t showing much traffic three weeks after publishing.

Blog Promotion

Each new blog article offers opportunities to get your website in front of viewers. In fact, each post can be repurposed and promoted in a variety of ways. Here are some ways to maximize your efforts:

• In addition to your website, publish each blog to your Facebook page.
• Include a link to your blog at the bottom of your receipts, invoices, etc.
• Send tenants a monthly email that includes important facility news, local events and an excerpt of your latest blog post, with a link to read the full article.
• Write an article on the best [food type] restaurants in the area. Once it’s published, let the restaurants know they’ve been featured and ask if they’ll share your blog with their audience.

Sales Opportunities

A great benefit to publishing a blog is the sales opportunity offered in the sidebar area. If you’re not sure what that is, look at some blogs on your desktop computer and pay attention to the way most of them are laid out. Typically, there’s content on the left and a sidebar to the right containing ads or additional information. When a blog lives on your website, you own that real estate. This is a great place to display ads for your latest specials or a special coupon code just for blog readers.

Get Started

Blogging is a great way for self-storage operators to provide quality and informative content to potential tenants. It offers one more opportunity to get noticed by Google and a leg up on the competition. While many operators know blogging exists as a marketing tool, few take advantage of it. If you haven’t started yet, I encourage you to consider ways you can incorporate a blog into your larger marketing plan.

April Lee works in sales and marketing for QuikStor Security & Software, a provider of security and software solutions for the self-storage industry. She’s been with the company since 2008, working in various capacities including accounting and technical support. She’s been directly involved with developing multiple blogs that generate more than 100,000 organic pageviews each month. For more information, call 800.321.1987; email [email protected].

When I say “self-storage signage,” what’s the first thing that comes to mind? Is it a giant set of illuminated channel letters? Maybe a large monument sign with a digital display? It’s common to focus on what’s outside the facility, but your signage shouldn’t stop there. It’s an important part of your customer experience! How can it improve the way you serve tenants?

Interior signs are crucial to helping renters use your self-storage facility efficiently. Think of them as employee helpers, educating customers on how to make the most of your services. If you use them correctly, you’ll spend a lot less time answering common questions and more time focusing on the important stuff, like selling and marketing!

There are many types of interior signs you can and should use at your self-storage property. Let’s take a look at some of them and how best to leverage them for your business.

Design Elements

There are many sign types and styles on the market. Here are a few general design details to consider:

• Materials: Signs are commonly made of acrylic, metal, glass and vinyl. What you use will depend on where a sign is going, the type of message being conveyed and your overall brand aesthetic. You can really achieve any look if you’re willing to pay for it.
• Lettering: Pay attention to the fonts you use. Do you want something with a thinner profile or more depth? You can use thicker letters or standoffs to extend the signage from the wall. There are many options. Choose what works for your brand.
• Illumination: Illuminating your signage through front- or back-lit lettering is a great way to draw the eye.

Navigation Signs and Unit Numbers

If customers can’t find their self-storage units, you’ll have complaints and other problems. Your goal is to guide them to their destination as quickly and safely as possible. It’s important to use building and hallway signage as well as unit-door numbers to help people navigate your site. A 3M vinyl application is a cost-efficient option. If you’re looking for something sturdier, you can use vinyl applied to aluminum, PVC or acrylic. (Most suppliers recommend aluminum.) Flat, cut-out signage can also offer a nice dimensional look.

Information Signs

The bigger your self-storage facility, the more signage you’ll need to keep customers informed. Displaying signs for things like office and gate hours and common rules and regulations is just good business.

The number, size and look of your signs will vary based on preference and visibility. I recommend sticking with neutral colors like black and white. If you use color, make sure it’s cohesive with your brand. Put your signs in places that are relevant to the messaging, and make sure they’re easy to see and read. You can mount them with screws or double-sided tape.

When it comes to glass windows and doors, vinyl can be produced with a first- or second-surface application, meaning it can be mounted inside or out. This product is easy to clean and can easily be removed without damaging the surface. It can be used for pretty much anything.

ADA (Americans With Disabilities Act) Signage

Having proper ADA signage is a huge deal, and there’s much more to creating compliant signs than just adding braille. You must consider where they’re placed and what material is used. For example, there must be no glare and high visual contrast. Even the size of the lettering is important. Fortunately, you can reach out to a variety of professionals such as your architect, general contractor or signage provider to help you properly design and install ADA-compliant signage.

Digital Options

Do you want some flexibility in your signs? Perhaps you want to change up your messaging to share promotions, celebrate holidays or announce policy changes. Digital LCD and LED displays are perfect for signage that requires frequent updates. Mounted screens can be configured in multiple formats, and information can be fed via your local network, internet or USB drives.

There are many different brands, types and specifications to consider when choosing a digital product. One thing I strongly emphasize is budget. Self-storage operators often focus on the initial cost, which usually isn’t cheap, without considering how it can save money in the long run. When you consider the expenses involved in designing, creating and maintaining print signs, a digital solution may be beneficial. Create a long-term marketing plan so you can be sure you’re earning the highest return on investment from day one.

Final Sign Tips

As self-storage facilities become more automated, interior signs are going to become much more important. You should constantly evaluate your signage and consider ways to improve it. Tour other storage sites to see how they use and display signs. Keep track of the questions you consistently receive from customers and consider making signs to answer them. You can also work with an experienced signage company that can guide you in making decisions.

Finally, have some fun with your signs. They don’t always have to be serious. There are tasteful but humorous ways to make people smile while also getting your point across.

While your front signage is an important component of your self-storage facility branding, your interior messaging can’t be overlooked. Consider how signs can better support your brand, staff and customers.

Steve Weber is a national sales representative for Blink Signs, a Cleveland-based sign company that provides a turnkey service for self-storage facilities. Blink works with facilities of all sizes, from permitting to manufacturing to installation. To reach him, call 216.815.0330; email [email protected].

Update 6/11/21 – Clearlake Capital, Janus International and Juniper Industrial Holdings have completed their planned merger. The combination was approved at Juniper’s stockholders meeting on June 3 and closed four days later. Janus began trading on the New York Stock Exchange (NYSE) on June 8. Clearlake, which acquired Janus in 2018, remains its largest shareholder, according to a press release.

“The completion of this transaction and our listing on the NYSE signifies a tremendous milestone for Janus as we continue executing on our compelling growth plans,” Jackson said. “Our industry is at a critical juncture as our customers begin modernizing and adopting our technologies, and invest in upgrading existing and new facilities. We are fortunate to have had Clearlake’s support and their technology and building-products expertise over the last several years as we built new software-based solutions and closed on several accretive acquisitions.”

“We are equally as excited to welcome the Juniper team, who I view as the perfect partners to help us and Clearlake drive the next chapter of growth for our company,” Jackson added. “Finally, I want to recognize the accomplishments of the broader Janus team, as I could not be prouder of our management team and employees for consistently executing and offering our customers the best solutions in the industry.”

Janus now serves more than 10,000 global customers, providing solutions that address unique and growing market needs, including its proprietary Nokē access-control solution.

“Since our initial investment, Janus has executed on its growth strategy and developed game-changing technology solutions that the industry cannot ignore,” Feliciano and Leonard said in a joint statement. “We are excited to continue as significant stakeholders in Janus and support the company through our ‘Operations, People and Strategy’ playbook. Together with Juniper, we believe Janus is uniquely positioned to drive considerable additional stakeholder value, and look forward to our continued partnership.”

Morgan Stanley & Co. LLC is acting as financial advisor to Janus. UBS is acting as financial and capital-markets advisor as well as placement agent to Juniper. Moelis & Co. LLC is also acting as financial advisor to Juniper.

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1/4/21 – Janus International, a global manufacturer and supplier of building components and security technology for the self-storage industry, will go public after a planned merger with Juniper Industrial Holdings Inc., a publicly listed special-purpose acquisition company (SPAC). Janus will continue to operate under its brand name and be listed on the New York Stock Exchange under the symbol “JBI.” The pro forma implied enterprise value of the company is $1.9 billion, with an anticipated capitalization of $1.4 billion once the merger closes, according to a press release.

The deal will be financed through $348 million of cash held in Juniper’s trust account and a $250 million PIPE (private investment in public equity) transaction, which includes investments by Baron Capital Group, Fidelity Management & Research Company LLC and members of Juniper’s board of directors. Existing Janus shareholders are expected to own approximately 51 percent of the company at closing, while Juniper founders are expected to own about 5 percent, the release stated.

“Over the last five years at Janus, we have nearly doubled our revenue, and we expect to continue showing strong organic growth in the future as a public company,” said Janus CEO Ramey Jackson, who will continue to lead the company. “We are thrilled to be going public at this watershed moment in the industries we serve, where existing infrastructure is either sold out or requires extensive upgrades.”

Janus has focused heavily in recent years on refurbishing aging self-storage facilities. The company estimates that 60 percent of storage properties are more than 20 years old. It’s also invested resources in access-control technology including smart locks. Going public will improve the company’s capital structure and enhance future growth, Jackson told “Forbes” magazine. In the last three years, Janus revenue has grown 92 percent. It projects a three-year-forward organic growth rate of about 10 percent, Jackson said.

“We are enthusiastic about Janus’ future prospects and believe the company will be able to accelerate its compelling growth plans as a public company,” according to a joint statement made by José E. Feliciano, chairman of the Janus board of managers and a managing partner at Janus parent company Clearlake Capital Group LP, and Colin Leonard, partner at Clearlake. “Janus has an unparalleled position in the products and technologies it offers to the self-storage and industrial sectors, which are experiencing significant tailwinds. We are excited to continue supporting Ramey and his team while leveraging the experience of our new partners at Juniper to expand Janus’ access-control solutions, technology offerings and inorganic growth plans.”

Feliciano will remain board chair, and Scott Sannes will continue in his role as chief financial officer. Additional board members include Juniper CEO Brian Cook, Janus founder David Curtis and Juniper chair Roger Fradin, among others.

Board members at Janus and Juniper unanimously approved the merger, though the transaction is still subject to approval by Juniper shareholders and customary closing conditions.

Headquartered in Temple, Ga., and founded in 2002, Janus sells roll-up and swing doors, hallway systems, and re-locatable storage units. Its technology division helps self-storage operators automate facility operation, improve security and create a more convenient customer experience, the release stated. It operates 10 U.S. locations as well as manufacturing facilities in Europe and Mexico. Janus is owned by Clearlake, a California-based private-equity firm.

As a SPAC, Juniper targets companies in the “industrials” sector, according to the release. It was formed to pursue mergers, capital stock exchanges, acquisitions, stock purchases or reorganizations with one or more businesses. It was founded by veterans of Honeywell International Inc., a multi-national conglomerate with interests in several industries including aerospace and building technologies.

Sources:
Yahoo Finance, Clearlake Portfolio Company Janus International to List on New York Stock Exchange through Business Combination with Juniper Industrial Holdings
Forbes, Self-Storage Door Maker Janus International to Go Public in $1.9 Billion SPAC Merger
Business Wire, Clearlake Portfolio Company Janus International Group Announces Completion of NYSE Listing through Business Combination with Juniper Industrial Holdings