A fire at Jack Rabbit Self-Storage in Virginia Beach, Va., on Friday damaged six units. The blaze was attributed to a mechanical failure in a vehicle stored in one of the units.

Firefighters responded to the call at about 3 p.m. to find flames coming from several units. It took about 40 minutes to get the fire under control, according to a fire-department spokesperson.

Three of the six units were completely destroyed, two were heavily damaged, and one suffered only minor damage. No one was injured.

Real estate investment trust Sovran Self Storage Inc. will pay its shareholders a quarterly dividend of $.45 per share of common stock on July 26. To receive the dividend, shareholders must be on record as of July 11. Sovrans annualized dividend is $1.80 per share, which, based on today's price, equates to an annual rate of approximately 4.4 percent.

Sovran is a self-administered and self-managed equity real estate investment trust in the business of acquiring and managing self-storage. The company operates 377 facilities in 24 states under the name Uncle Bob's Self Storage.

Fire investigators in Honolulu were unable to determine the cause of an explosion April 8 at Waikele Self Storage, which killed five men.

Firefighters responded to a reported car fire, but discovered the flames had possibly ignited fireworks, which the local fire department had authorized in the past to be stored at the facility.

The men may have been workers for Donaldson Industries, the company leasing the underground storage space. Donaldson Enterprises is an ordnance-demolition company, and the men were working at the storage bunker when the fires broke out.

The Honolulu Fire Department announced last week it has completed its investigation at the facility, but cannot pinpoint the fires origin from the fire and blast patterns. According to fire investigators, possible ignition sequences include accidental scenarios such weather-related activity, electrostatic buildup, electrical sparking, smoking or fireworks handling, an incendiary event, or operational or accidental actions of persons in the bunker.

The bomb squad from a nearby military base was called Thursday to a self-storage facility in Wichita Falls, Texas.

A possible explosive training round was discovered in a unit at Saf-T-Loc on Sheppard Access Road. An employee from the facility opened the unit and found the round after the tenant failed to pay the rental fee. The unit held old military equipment, including the rocket propelled training round.

The bomb unit from Fort Sill in Oklahoma secured the training round. Federal guidelines require it to be destroyed.

By Steve Hajewski

In areas where there is unmet self-storage demand, the reason is often barriers to market entry. Perhaps land is hard to come by, too expensive or includes zoning hurdles. Sometimes its wise for a developer to move on to an alternate market or land acquisition. In other cases, however, success is just a matter of getting creative and being persistent. Following are stories of self-storage builders who triumphed over challenging locations.

Building Up in Des Moines

For self-storage operator and developer David Paladino, perseverance and imagination were vital to expanding his companys portfolio. As the owner of Dinos Storage, with 13 locations in the United States and Canada, Paladino is no stranger to self-storage construction. His facilities include multi-story and conversions as well as traditional buildings and site layouts.

When Paladino was ready to expand in Des Moines, Iowa, he knew sufficient demand existed to warrant a large project, so he acquired a parcel of highly visible land in a high-traffic area. However, half of the parcel was incorrectly zoned, and the process of changing the zoning looked to be an exceptionally long process with no guarantees.

To accommodate the project and lot, the facility was built on the properly zoned section of the land only. But rather than go the traditional single-story route, Paladino built vertically, creating a four-story facility. The building covers as much of the parcel as allowable.

When building a project with interior access, one of the drawbacks is the doors are no longer visible from the exterior. Knowing doors are a critical identifying characteristic of self-storage facilities, Palladino added large windows to portions of the building to create visual interest while communicating the buildings function to the public.

The projects urban location could have made it susceptible to theft, but as an experienced operator, Paladino knew the importance of an effective security system. Weve caught several criminals with the combination of access control and cameras, he says. If you break in, youre done.

Visible and Secure in Las Cruces
For self-storage developer and owner Max Schroeder, the challenge was taking advantage of a reasonably priced parcel near a main thoroughfare in Las Cruces, N.M., even though it was not entirely visible and was zoned for residential, not self-storage. What we found is if we can buy land zoned as residential and convert it to commercial, we can triple the value when its rezoned, Schroeder says.

He purchased the property and subdivided it, leaving the existing home as a rental property, then creating a self-storage portion and an additional parcel out front for another business. The downside to Schroeders plan was it took about a year to obtain zoning approval. The city also required him to pay for significant upgrades to bring city water and sewer roughly 2,000 feet to the property. While this was a major expense, the bargain price of the land and otherwise good location made the project feasible.

As Schroeder designed the site, steps were taken to maximize exposure, minimize maintenance and provide high security for the facility, Discount Self Storage. We wanted to say Hey, were self storage, but do it in a southwest style, Schroeder said. To achieve this, he surrounded the site with a combination of stone fence and perimeter buildings with parapet walls coated in stucco. The walls feature false doors and decorative trim, which look attractive yet signal the property is a self-storage business. The 1,800-square-foot office/manager apartment continues the southwest theme with stucco walls and a Spanish-tile roof.

Security was also a concern. While there isnt a huge crime problem in the area, Schroeder wanted to reduce the occasional graffiti that comes with an urban location, so he installed a chain-link fence around the property edge. The city required a landscaped buffer zone between the residential neighbors and the self-storage business, and this was installed between the tall stucco wall and chain-link fence. The buffer area contains a mix of gravel and oak trees selected for minimal maintenance.

Since the site isnt on the main road, it was designed to take advantage of traffic from a nearby grocery store. The parapet walls, signage and office structure are as tall as allowable and can be seen clearly from the grocers parking lot. The main artery is exceptionally busy, so the slightly removed location has the benefit of providing easier access for customers coming in with trucks and trailers.

The property has a 12-foot drop from one end to the other. In the second phase, Schroeder specified buildings roofed with a rolling step. This simplifies the design by eliminating an elevation step and the accompanying trim, and gently angling the roof sheets. Inside, ramps provide ADA (Americans With Disabilities Act) access from one elevation to the next.

Finding the Diamond in the Rough
It seems every developer faces some obstacles when it comes to building self-storage. The key to success is to persist and overcome those hurdles, perhaps even turning them into a positive aspect of the site. Storage businesses can be adapted to fit hilly or odd-shaped parcels of land that other businesses reject. Seeing past irregularities and envisioning the potential of a site is a part of many success stories in our industry. Good luck finding your diamond in the rough!

Steve Hajewski is the marketing manager at Trachte Building Systems, which designs, manufactures and erects a full line of pre-engineered and customized steel self-storage systems. He can be reached at 800.356.5824; e-mail [email protected]; visit www.trachte.com.

By Amy Fuhlman

This is not just another conversion story. Were all accustomed to seeing vacant grocery stores, big-box stores, downtown office buildings and even a Hawaiian cave converted successfully to accommodate self-storage; but a historic airplane hangar in Denver now offers a unique new home for storage, shopping and public amenities with a twist.

Hangar History

Hangar 2 is part of the redeveloped Lowry Air Force Base, which comprised two massive hangars. Established in 1938, the base was built to house an Air Force Technical Training School. Its original mission was aerial-photography training, but Lowry was also heavily involved with the training of U.S. bomber crews and flight engineers during World War II.

In addition, the base was home to the U.S. Air Force Academy from 1954 to 1958, until its permanent site in Colorado Springs was completed. President Eisenhower even spent some time at Lowry, as his wifes family was from the Denver area. He essentially used it as a summer home from 1953 through 1955.

Due to the proximity of the residential area and the increase in high-performance jet-aircraft accidents at the base, flight operations ceased in 1966, though administrative offices and training remained active. In October 1994, cost-reduction measures taken by the military caused the closure of all offices and training facilities.

Hangar 1 was redeveloped as the Wings Over the Rockies Air & Space Museum. Hangar 2 remained vacant until its rebirth in 2011, thanks to the innovative development team of Hartman Ely Investments (HEI) and Larimer Associates, jointly known as Hangar 2 Partners (H2P).

HEI specializes in the design and adaptive use of historic buildings, renewable energy and energy efficiency. Larimer is a Denver-based real estate investment and management firm, best known for the Larimer Square project in downtown Denver. The company has also created several energetic neighborhood-redevelopment projects and restaurant properties. Together, HEI and Larimer brought complementary synergies to the table and a driving desire to infuse the Hangar with services that would unite the community while preserving its historic value.

Why This Space?

Hangar 2 is a very unusual setting for a self-storage conversion. H2P chose it for four distinct reasons:

• High market demand and barrier to entry for self-storage in the area
• Relatively low construction cost inside an existing hangar shell
• Low parking demand (parking was much needed for other areas of the development)
• Only minor changes necessary to the historic exterior facades

Self-storage consulting veteran Jim Chiswell, president of Chiswell & Associates LLC, was contacted to work on the project. When first asked about his interest in doing a feasibility study for such an unusual facility, Chiswell wasnt sure the offer was real. But after a few phone calls with Hangar 2 principals Joe Vostrejs and Jim Hartman, he was on a plane to Denver.

I quickly discovered the Hangar 2 team had an inspired mixed-use vision of the propertys repurposing that was truly unique for a self-storage conversion, Chiswell said. Despite the surrounding competition, it was quickly evident the facility would be serving primarily the Lowry community. All my research pointed to a market opportunity with extremely high barriers to any further entry. 

With almost 100,000 square feet of column-free space with a solid interior aircraft slab on which to build, H2P was interested in finding the best use for the space. The venture analyzed many redevelopment concepts before settling on self-storage combined with small-scale office/retail as the best option. Although the design went through a number of iterations, the final layout consists of 65,000 net square feet of storage in 600 unitsthats phase 1. In phase 2, restaurants, retail and office space are added, giving the complex a distinct marketing advantage.

The self-storage portion of the master development plan is critically important to the overall financial feasibility because of the positive cash flow it will provide without a significant impact on space for parking, explained Chiswell.

Unique Construction Features

Despite the massive column-free plot, alterations were necessary to adapt new building and fire-code systems. H2P contracted The Rabco Corp. to build a new one-story building within the larger hangar shell without affecting the historic features. The connection of storage walls, roofing and other components to the atypical shape and size of the building caused some clever challenges for Rabco and Janus International, the supplier of hallway components and roll-up doors, as they didnt always match up with a typical 10-foot module.

Each unit that backed up against the historic hangar doors had to be fit differently by our installers, explained Pat Nesbitt, technical sales manager for Janus. H2P chose gloss-white doors and partitions for a clean look, brightness and lighting efficiency. Flush panels were also used, which furthers assists in light reflection.

With a roof peak of 90 feet, temperature control was also a factor. Rabco brought down the roof system to harness the temperature from 12 feet and lower, the optimal cubic space for the projects climate-controlled storage.

H2P was able to incorporate a drive-through unloading corridor that allows customers to be totally out of the weather when accessing their storage units. The joint venture has found that protecting tenants from the rain, snow or sun provides a unique marketing advantage that attracts residential and commercial tenants. However, it was complicated to achieve this goal; it required a great deal of negotiating to reach an agreement with the building and fire departments.

H2P ultimately achieved a creative, custom code solution that includes an engineered smoke-exhaust system, fire walls to break the floor plate into smaller zones, specialized multi-zone fire-sprinkler and -alarm systems, and a carbon monoxide exhaust system for the drive aisles.

Successfully integrating and testing those systems and making them operational was a real challenge, but one that was essential to achieve full code compliance.

Solar Energy

Hangar 2 offers vast amounts of natural daylight through its existing glass doors, and its curved, southeast-facing roof is ideal for producing solar power, which plays a significant roll in the project. More than 500 solar panels were installed on the roof by Martifer Solar. The three rows of panels were designed to replicate the look of the old hangar's skylights, preserving a little touch of building history.

The photovoltaic panels convert solar radiation into direct-current electricity. Theyre expected to provide at least a third of the energy required to run the building. Due to its energy-efficient features, Hangar 2 has the ability to use only half of the energy required by typical buildings of the same size. The project incorporates energy-efficient lighting, heat controls, motion-sensor light switches and premium insulation. Together these sources of clean energy will promote environmental sustainability, combining sophisticated energy technologies with the historic integrity of the building.

The hangars solar power system cost approximately $500,000, but with support from the federal government and a rebate from Xcel Energy, the net costs will be much less. Over the course of one to two years, Hangar 2 will recoup the cost of its solar-power system and enjoy the benefit of free, clean energy for the next 30 years.

The solar-power system is one of the largest and most visible examples of a building-integrated photovoltaic installation in the country, said Hartman, a partner in HEI. Hangar 2 stands as Lowrys solar symbol. In fact, onlookers cheered as the first panels were set in place. He suggests that anyone considering a solar installation should not ignore the significant marketing benefits in addition to the financial benefits before making a decision.

Building Community

HEI and Larimer Associates have a unique relationship with the Lowry and Denver communities. Since both companies are well-trusted in these areas, they were able to pre-lease five large storage units at market rate for a year to a local business tenantall before construction even started. H2P also holds periodic community events within the expansive drive-aisle space and recently started the Lowry Farmers Market at Hangar 2. These types of relationships and community events integrate the hangar into the neighborhood in a symbiotic way thats very unusual for a self-storage facility.

H2P has incorporated 12 spaces for the Lowry Dining District in phase 2 of the project, which was designed by Semple Brown Design of Denver. Currently theres also a yoga studio, and future plans call for the Lowry Dog Spa & Hotel. Negotiations are in progress to lease another 2,500 square feet of retail space to a restaurant.

H2P, which had to get landmark commission and community approval to build its project, is indebted to many local and regional public officials who played a part in its success. Those agencies include the Denver Urban Renewal Authority, who provided essential financing for the project, the Lowry Community Master Association, the Lowry Redevelopment Authority and the City of Denver. FirstBank of Denver was also a key private-sector team member, providing the bulk of the financing to get the job done.

Since the project opening in March, public reaction has been positive. H2P has aggressively marketed the self-storage component with an open house, local media outreach, direct mail, e-mail blasts and personal calls.

Hartmans biggest piece of advice for those tackling a historic-building conversion? Start early with the code approvals. It takes an incredible amount of time. But its time well spent, as Hangar 2 has secured its place in the self-storageand historichall of fame.

The Hangar 2 Project Team

• Developers: Hartman Ely Investments, Larimer Associates
• Facility management: Extra Space Storage Inc.
• Architects: Patricia Mueller Calandra, Jim Hartman
• General contractor: TRC Cos.
• Doors and hallway systems: Janus International
• Building systems: The Rabco Corp.
• Mechanical components: Design Mechanical
• Electrical contractor: Wrangler Electric
• Fire sprinkler: Diamond Fire
• Solar panels: Martifer Solar

Amy Fuhlman manages the marketing communications programs for Janus International, a manufacturer of self-storage doors, hallway systems and building components. For more information, visit www.janusintl.com .

Self-storage operator StorageVault Canada Inc. reported results for the fiscal quarter ended March 31, 2011. Highlights include:

• Revenue increased $681,471, representing a 50.4 percent increase compared to the same period last year.
• Net operating income increased to $315,538, representing a 35.9 percent increase compared to the first quarter of 2010.
• Cash flow as measured by funds from operations decreased to $42,327, representing a 9.7 percent decrease compared to the same period last year.

On Jan. 18, StorageVault agreed to sell a 2.16 acre parcel of undeveloped land in Cambridge, Ontario, Canada, in exchange for $350,000 in cash and a 1.45 acre parcel of undeveloped land adjacent to its B&B Mini Storage location, also in Cambridge. The transaction is expected to close this month.

StorageVault owns and operates several self-storage facilities in Canada, as well as PUPS portable-storage franchises. As at March 31, the companys portfolio included 133,000 square feet of self-storage and 68,000 square feet of portable storage. StorageVault owns and operates Trans Can Mini-Stor in Regina, Kenaston Self Storage in Winnipeg, B&B Mini Storage in Cambridge, and Parksville Mini Storage in the Regional District of Nanaimo.

VIP Self Storage at 1636 N. Magnolia Ave. in El Cajon, Calif., recently sold for $1.8 million, representing an 8.03 percent cap rate. Completed in 1983, the two-story facility has 363 units in approximately 24,077 square feet.

William Anderson, senior vice president and principal of ACRE Investment Real Estate Services, represented the buyer, Catherine Burdick, and the seller, Bernard Martin, trustee of the Bernard J. Martin Trust. Escrow services were provided by Kathy Robinson and Annemarie Lo Coco of Chicago Title's Park Camino branch. Cameron Aldrich, also of Chicago Title, acted as the title agent.

A self-storage operator in La Vergne, Tenn., irate over steep tax increases is part of group looking to dissolve the local government.

Stan Glasgow, owner of LaVergne Mini Storage, is among a group of business owners who began circulating a petition last week.  To hold a special election, the group must present a petition with more than 5,000 signatures of registered La Vergne voters. If the group is successful, the La Vergne government would be absorbed into Rutherford Countys government.

The city will require business owners to pay the city $1 for every $100 of their propertys assessed value annually, doubling a tax rate that had been untouched for 18 years. The rise comes shortly after other business-expense increases, including a 40 percent increase in the water utility rate and a 60 percent increase on the citys sewage rate. La Vergne residents also pay a $2.46 tax rate to Rutherford County.

City officials said the tax increase was necessary due to the growing city population, which jumped 74 percent between 2000 and 2010. The city also has a $30 million debt.

Olympia Steel Buildings of Canada has contracted to design, engineer and supply five pre-engineered self-storage steel buildings for a new facility near Kamloops, British Columbia.

The five pre-engineered steel buildings are 30 feet by 100 feet, providing a total of fifteen-thousand square feet of available rental storage space. Construction is scheduled for completion in summer 2011.

Kamloops is a growing rental storage market. The city is in the Thompson Valley near the confluence of the north and south branches of the Thompson River, with suburbs stretching for more than a dozen kilometers along both north and south branches, as well as to the steep hillsides along the south portion of the city and lower northeast hillsides.

Host of the 1993 Canada Summer Games, Kamloops is also a transportation hub for the region of the confluence of the North and South Thomson rivers.

Olympia Steel Buildings are supplied by Universal Steel Buildings Corp., which has offered pre-engineered steel buildings for more than 40 years to commercial, industrial, agricultural, residential, government, military and civilian agencies.