To the disappointment of California self-storage operators and the satisfaction of the states newspaper publishers, Gov. Jerry Brown signed a revision to the self-storage lien law last week, reverting it to an older, less storage-friendly version.

Despite efforts by the national and California Self Storage Associations, state officials succumbed to pressure from the newspaper lobby, undoing the legislative changes achieved by the associations last year. Although Assembly Bill 655 still required self-storage operators to advertise their lien sales in a newspaper of general circulation, the law had been expanded to include any newspaper in the storage operators county as opposed to the smaller and less clearly defined "judicial district." Senate Bill 279 reversed this modification.

According to the California Self Storage Association (CSSA), the law as it was passed last year made the lien-sale advertising market more competitive, and storage operators had begun to report significant cost savings. But the states newspapers, suffering from declining advertising revenue, were outraged.

"We opposed SB 279 because it was not in the best interests of our members or the customers of self-storage facilities who have payment problems, said CSSA Executive Director Erin King. The CSSA believes that limiting advertising of self-storage lien sales to newspapers of general circulation is bad public policy in the Internet age.

SB 279 puts even more limits on how self-storage lien sales can be advertised by restricting placement to the judicial district where the sale is held, King explained. By law, a judicial district is a geographical area where only 40,000 people reside. In the large coastal counties, this can be an area of just a few square blocks.

Each day, fewer people go to newspapers to get specialized information such as where self-storage lien sales are held, King said. Unfortunately, the California Newspaper Publishers Association is still a very powerful special-interest group and was able to use its formidable political clout to force a bill through the legislature that only serves the narrow interests of the newspaper industry.

We believe that the newspaper monopoly on public-notice advertising will eventually be broken, but that will take time and effort by organizations like the California Self Storage Association and it members who see every day the fiscal impact that this legislatively mandated monopoly has upon small businesses and their customers across the state."

The CSSA will host a Manager Education Day on Aug. 9 in Sacramento, Calif., to teach members about legislative changes and best practices. The event will be presented by Carlos Kaslow, an attorney and the original author of the California lien-law bill. He will provide a practical explanation of the California Lien Law 21700 of the Business and Professions Code as well as a detailed focus on the significant statutory changes surrounding the passage of AB655. Event details can be found at CaliforniaSelfStorage.org.

National Self Storage in El Paso, Texas, is acting as a drop-off location for a uniform-swap charity drive for students headed back to school.

The Third Annual School Uniform Swap this Saturday enables families to recycle old school uniforms to ease family financial burdens.

The event was initiated three years ago by a group of parents from the Horizon City Lions Club. Last year, the swap drew 400 families.

Gently used uniforms can be dropped off at three locations in El Paso, including National Self Storage, 7620 North Loop and Carolina. The swap will run 8 a.m. to 11 a.m. at Eastlake High School.

Sovran Self Storage, the real estate investment trust (REIT) that operates facilities under the brand Uncle Bob's Self Storage, will issue financial results for the quarter ended June 30 after the market closes on Aug. 3. The company will hold a conference call to review financial results and discuss operations on Aug. 4, at 9 a.m. ET.

To access the conference call, dial 877.407.8033 (domestic), or 201.689.8033 (international), at least five minutes prior to the scheduled start of the call. Management will accept questions from registered financial analysts after prepared remarks; all others are encouraged to listen to the call via webcast at www.unclebobs.com/company/investment/events.

The webcast will be archived for 90 days; a telephone replay will be available for 72 hours by calling 877.660.6853 and entering pass codes 286/375595.

Sovran Self Storage Inc. is a self-administered and self-managed equity REIT that acquires and manages self-storage facilities. The company operates 371 facilities in 24 states.

Marcus & Millichap Real Estate Investment Services has released its Self-Storage Research report covering the first half of 2011, the overall message of which is that banks are beginning to loosen their lending restrictions and self-storage investment activity should increase this year. The report includes an industry outlook by region addressing facility occupancy, rents, cap rates and prices. Highlights from the report include:

• Investment activity will increase as banks sell off real estate-owned properties, drawing regional syndicates from the sidelines to target class-B and -C assets throughout the Sun Belt.
• California and Florida will register a sizable share of closings as maturing loans and soft operations push properties into foreclosure.
• Financing for new buyers seeking properties below $5 million and with a stable operating history will emerge in the form of SBA (Small Business Administration) loans.
• At the top of the market, cash-heavy real estate investment trusts and institutions are moving back into the self-storage arena, leveraging operating efficiencies to add value to recently purchased properties.
• Class-A assets in primary markets, including those in the Northeast, will garner the most attention.

Marcus & Millichap Research Services is a division of Marcus & Millichap Real Estate Investment Services, a commercial real estate investment services firm. As a service to its clients, Marcus & Millichap provides research reports through the Research Services page of MarcusMillichap.com. Additional information on a particular self-storage market can be had by contacting a local office and speaking with one of the companys investment specialists.

Issaquah Highlands Self Storage opened in May in Issaquah, Wash. The facility, on High Street between Ninth Avenue Northeast and Northeast Highlands Drive, features six stories and 68,000 square feet with 503 heated storage units. Unit sizes range from 25 square feet to more than 200 square feet.

The facilitys retail store includes boxes and packing supplies. Staff will also accept small commercial packages for customers. Customers have access year-round from 6 a.m. to 10 p.m.

The property is managed by West Coast Self-Storage.

I-5 Self Storage teamed with gourmet food trucks to host the Orange County Food Truck Faire to benefit Laura's House Charity. The event took place at the storage facility in Tustin, Calif.

Laura's House Charity assists individuals and families by providing shelter, counseling and education. In addition, Laura's House Emergency Shelter Programs provides clinical services to children, including psychosocial assessments, educational activities, counseling and tutoring.

"What better way to support the community than by sharing a delicious meal with friends and neighbors from your favorite local food trucks," said I-5 owner Randy Scott Wong. "Participants had such a great time sharing their opinions and unique gourmet creations with one another."

A portion of the proceeds from the day's sales was presented to Laura's House from each of the food trucks, which included local legends Dos Chinos, Rolling Sushi Van, The Flip Truck, Komodo, Mun-chee 5, Slap Fish, Oh for sweetsake, Baconmania, Longboards, Dogzilla, The OCFoodTruck, Kona Ice and the Chomp Chomp Truck. Additionally, tickets for Dodger's games including VIP parking were raffled off by I-5 with 100 percent of the proceeds donated to Laura's House.

"It continues to be a challenging economy for both businesses and individuals alike," said Wong. Our staff and partners feel its particularly critical and beneficial to help others and give back to the community during these times."

By Greg Moore

A Washington lumber company forayed into self-storage and expanded with the conversion of a former beer-distribution warehouse. Though its project was not developed without difficulties, the mill-town star succeeded and went on to build an award-winning facility.

When H.O. Seiffert Co. was established in 1901, it owned and operated one of the largest retail, wholesale-lumber and building-materials businesses in Everett, Wash. The company grew with the mill town, and in 1987, it shifted its focus from lumber to self-storage, building its first development on a portion of its own property. Today that facility consists of 464 units and 43,380 rentable square feet.

In 2002, H.O. Seiffert purchased a downtown building constructed in 1918. It had been converted to self-storage in 1987, with 19,063 rentable square feet over three floors and 292 units. Despite this acquisition, the company felt there was additional demand for storage in the area, and it sought more opportunities.

The company quickly focused on an industrial area on the downtown perimeter. After several months, it found a 48,000-square-foot beer-distribution warehouse that had been vacant for several years. Because there was no onsite parking, several potential sales for manufacturing and warehouse uses fell through. However, the property was zoned properly for self-storage and in a market H.O. Seiffert knew well. The building emerged as a good portfolio candidate.

The Decision to Build (And Bumps Along the Way)

After entering the building through one of its truck-loading bays, the H.O. Seiffert team found it had a clear ceiling height of about 22 feet. They realized a second floor could be added, increasing the square footage to 96,000 gross square feet of heated self-storage. Given these numbers, everyone knew this was a good site for the project. The company closed escrow on the property in September 2007.

Construction drawings were finalized at the end of 2007. Contractors were solicited and permits filed with the City of Everett, all in hopes of executing the storage-conversion plan as quickly as possible.

An early obstacle to development was parking requirements. The property had been fully built out to the boundary on all four sides. Despite improvements to city curb, gutters and sidewalks, which created 11 new parking stalls adjacent to the building, the city still required one interior parking stall per 300 square feet of interior office space. Original plans for a larger retail-oriented office were scrapped for an 850-square-foot version that required only three interior parking spaces.

The team suggested to the city that the proposed interior loading areas were large enough for at least four vehicles and provided the additional required customer parking. This argument was rejected, and the developers were forced to sacrifice three rentable drive-in units for customer parking bays to get plans approved.

Construction Challenges

Interior demolition on the project began in February 2008, and the construction permit was issued in March of that year. Although the single-story, concrete tilt-up shell was mostly empty, there were still a number of design challenges to overcome, including the many additions that had been made to the building over the years. Obstacles included the need to cut hallways through interior load-bearing walls. Steel-moment frames were constructed and installed to maintain structural stability in these areas where the building was modified.

Petroleum-like compounds were unearthed during the digging of the elevator pits, and the project was immediately red-tagged. Core test samples were done at the limits of the excavations and came back positive, a possible indicator of widespread contamination. After more probing and sampling, it was concluded that further soil removal might jeopardize the structural integrity of the original structure.

With advice from an environmental consultant and attorney, the difficult decision was made to encapsulate the remaining contamination and drill groundwater wells to ensure no contaminants were migrating offsite. Fortunately, additional groundwater-drilling tests indicated a water table below 50 feet in depth. This meant no need for ongoing water-well monitoring and no chance of encapsulated contaminates migrating to neighboring properties.

The general contractor, PugetWest Construction, ultimately removed and disposed of 87.5 tons of environmental contamination from the site. Thousands of dollars later and almost a two-month delay, construction continued and final Environmental Cleanup Reports were completed and submitted to the Washington State Department of Ecology under its Voluntary Cleanup Program.

A restrictive covenant on the deed was necessary to properly record the environmental contamination remaining onsite. This covenant requires notification of the known contamination prior to any digging on the property and full disclosure in the event of any transfer of the property.

It was also discovered portions of the new property were formerly used by the railroad industry. Further investigation revealed that a railroad-switching turnstile once existed where one of the elevator pits was being dug.

Maximizing Existing Features

The H.O. Seiffert team remained focused on the positive, maximizing the sites net rentable square footage while modifying the existing structure as little as possible. The new second-floor, concrete-deck mezzanine doubled the footprint, but due to seismic restrictions, the exterior walls had to be independent from the new infill structure. The team essentially built a steel box inside the existing building.

Careful consideration was given to the unit-mix plan, which had to complement the Everett urban demographics while matching existing market demand. Working with existing conditions such as full-height interior loading docks with 14-foot exterior panel doors, structural systems and existing utilities proved to be a challenge that offered many opportunities. The integrated design features two 24-by-40-foot covered loading areas, 12 12-by-30-foot exterior drive-up units with automatic door openers, a centralized rental office, skylights, and two split-elevator locations to keep travel distances minimal. The combination of these amenities makes the property easy to manage, but more important, customer-friendly.

A Grand Opening

Everett Downtown Storage was completed in November 2008. The building features 67,740 net rentable square feet with 709 heated units and the following amenities:

• Kiosk
• Two interior-drive loading bays
• Two commercial service elevators
• 12 gas-forced air furnaces providing heated space throughout
• Exterior wall and ceiling insulation for added efficiency
• Second-floor skylights and windows for natural light
• Energy-efficient motion-lighting controls
• New roof membrane
• Large drive-up exterior units with power-door operators and keyfob remotes
• Individual door alarms with quickswitch sensors
• Eight manager call-station boxes
• All-facility music and paging system
• Video-monitoring DVR with a 16-camera system and large office display
• 14-foot box moving van for customer use

While H.O. Seiffert didnt accomplish its goal of opening in time for the busy summer/fall renting season, the facilitys occupancy has steadily grown, reaching 60 percent to date and averaging 35 new leases per month. Leasing has been slow but steady in a very tough economic time. The urban location has the good fortune of a strong pool of commercial customers. The large drive-up units with automatic doors have rented quickly and are 100 percent occupied.

The company is excited about the ability to draw from new and existing customer bases, and also refers business from its existing stabilized properties. The Everett project has been well-received by the local community and current customers, recently winning a Neighborhood Friendly Business award, sponsored by the City of Everett and its Office of Neighborhoods.

Despite significant construction obstacles, H.O. Seiffert Co. was able to increase its portfolio with a converted state-of-the-art storage facility that includes high-end amenities and is embraced by its market.

Greg Moore is principal of Moore Design Associates, formed in 2002 to specialize in self-storage design services. Moore has several years of design experience including high-rise office buildings, retail design and planning, multi-family housing, and institutional design. To reach him, e-mail [email protected] .

Everett Downtown Storage Project Team

• Owner: Eds McDougall LLC and The H.O. Seiffert Co.
• Architects: Peter Schroeder, Peter Schroeder Architects
• Structural engineer: Structural Design Associates
• Metal-building vendor: DMBS
• General contractor: PugetWest Construction
• Civil engineer: Perteet Inc.
• Landscape architect: Moore Design Associates
• Project design consultant: Moore Design Associates
• Doors and hallway systems: Janus International

The Store House, a self-storage facility in Pearl, Miss., sold on June 30 to an out-of-state investor for $1 million. The facility is comprised of 55,238 square feet and 400 units on 3.06 acres. 

Bill Barnhill, Shannon Barnes and Stuart LaGroue of Omega Properties Inc. represented the seller, a Louisiana bank. The buyer was represented by Ricky Lennard of Lennard Properties LLC. All of the brokers are part of the Argus Self Storage Sales Network. Barnhill, Barnes and LaGroue are the Argus broker affiliates for the Mississippi, Alabama and Florida Panhandle markets.

An Argus broker, Linda Cinelli of LC Realty, also represented the seller and buyer in the acquisition of Paramount Self Storage in Stanhope, N.J.  Cinelli is the Argus Self Storage Sales Network broker affiliate for the Northern New Jersey and NYC/Long Island markets.

The 49,466-square-foot property sold on June 23 to a national self-storage buyer for an undisclosed price. The property was attractive to buyers due to its close proximity to major highways, variety of units and U-Haul truck-rental dealership.

The facility features six buildings on six acres of land and nearly 450 units in various sizes, plus climate control. It also includes a retail store with items such as boxes, locks and packing supplies.

After reading about the success of self-storage in the United States, two brothers in the Philippines decided to open their own facility.

Mark and Carlo Coronel, along with their mother Celina Martinez-Coronel, opened Safehouse Storage Facility 18 months ago. It is the first business of its kind in the Philippines.

The family also owns Insular Rural Bank and needed a place to store financial records. The family was leasing warehouses in Taguig and determined theyd be ideal for self-storage units.

In addition to traditional storage, Safehouse also offers packing and transporting of items to the facility. Tenants include a mix of homeowners storing furniture and personal items, and small or medium businesses that use the units to store inventory and records. Storage of records is in such demand that the brothers are developing a filing system to make it easier for tenants to locate files. The company will also add units and staff in the coming months.

Two men in Texas discovered documents belonging to the Federal Emergency Management Agency (FEMA) when they purchased the contents of a self-storage unit at an auction.

The unit at West Bay Self Storage in Leelanau County had been rented to a man who worked for FEMA as a subcontractor in 2005. The man currently works for a car dealership.

The abandoned unit contained claims filed with FEMA following 2005s Hurricane Rita, a laptop registered to FEMA and car loan applications.

The buyers, Lawrence Betz and William Petersen, purchased the contents of the unit for $500 in October. FEMA is investigating why the documents were in the unit.