Real estate developer Joe Thompson is building a self-storage facility and retail building in Roanoke, Va., on Dale Avenue, near a newly opened Wal-Mart Neighborhood Market. Parkside Storage will comprise 45,000 square feet of climate-controlled space. The property will begin taking reservations in early 2016 and open in the spring, the source reported.

Thompson is also developing Parkside Commons, an 11,500-square-foot retail building that will include multiple storefronts. The project has received some interest from retailers since construction started, but space is still available, Thompson said.

The large lot is currently being prepped for construction. Thompson’s plans were already approved prior to Walmart’s application submittal in April 2014, the source reported. The grocery store at 2141 Dale Ave. opened in January. The parcel also includes a small warehouse for Parts Depot, a distributer of agricultural, commercial, industrial, and lawn and garden parts.

Just weeks after breaking ground on a self-storage facility in Downtown Charleston, S.C., Atlanta-based real estate development and investment firms NitNeil Partners and Live Oak Capital Partners have announced their intent to develop a storage facility in the prestigious suburb of Mount Pleasant, S.C. The three-story building will feature 52,500 square feet of climate-controlled storage. The property at 1426 Highway 17 North, near the intersection of Interstate 526, will be centrally located along the city's primary commercial corridor, according to a NitNeil press release.

"With excellent schools, sophisticated restaurants and high-end retail, Mount Pleasant offers residents a high quality of life in close proximity to Downtown Charleston and the surrounding beach communities," said Steve Tedder, principal of Live Oak Capital Partners. "This well-designed, highly visible facility will be the highest quality, climate-controlled self-storage in the market and will address the unmet needs of local residents and businesses."

Construction will begin later this summer, with the property expected to be open to the public in spring 2016.

NitNeil Partners is a regional investment firm that specializes in the acquisition, development and management of commercial real estate, including self-storage. The company’s self-storage portfolio comprises more than 800,000 square feet across five states.

Founded in 2012, Live Oak Capital Partners focuses primarily on “niche property types and off-market” opportunities, according to the release. It has investment interests in self-storage, industrial, manufactured-housing and office properties.

Portable self-storage operator Mobile Mini Inc. recently acquired Allstate Containers, a Tennessee-based company that has a fleet of about 2,600 portable-storage units. Financial terms of the transaction weren’t disclosed.

Allstate’s locations in Chattanooga and Knoxville, Tenn., are in markets that project growth, according to Erik Olsson, president and CEO for Mobile Mini. “We continue to execute on our growth strategy by pairing internal revenue growth with strategic acquisitions of high-returning assets. Knoxville and Chattanooga are good markets that continue to grow, and this acquisition allows us to further strengthen our position in Tennessee without adding significant costs,” Olsson said.

Last year, Mobile Mini acquired Beacon Equipment Leasing, a portable-storage business based in Buffalo, N.Y., as well as Houston-based Evergreen Tank Solutions. Through the Evergreen subsidiary, Mobile Mini has 24 locations that provide specialty containment solutions.

Founded in 1983 and based in Phoenix, Mobile Mini is a provider of portable-storage and mobile-office solutions. The company operates more than 134 locations throughout North America and the United Kingdom. It reported first-quarter 2015 revenue of $132.6 million, a 29.5 percent increase from the same quarter in 2014, the source reported. Second-quarter financial results will be released on July 23.           

Storage Pros Management LLC, which owns and manages 60 self-storage facilities in six states, has acquired University Pines Self Storage in Pembroke Pines, Fla., from Ireland Cos., a family-owned real estate investment and development company based in Miami. The facility will be branded as Storage Pros Self Storage.

The two-story building at 8321 Pines Blvd. is comprised of 74,783 square feet and features 1,020 units, 712 of which are climate-controlled. It also has 18 uncovered parking spots. Storage Pros has launched a capital-improvement program to upgrade the property.  

The facility is on the northwest corner of a large commercial parcel that includes big-box and in-line retail tenants. These businesses generate significant traffic to the area resulting in significant exposure for the property, according to the source. The property is located in the C-1 zoning district, the only zoning district in Pembroke Pines that allows self-storage development. Barriers to entry for new competition are extremely high, as the property is in a dense urban area, according to a press release from JLL (Jones Lang LaSalle) Capital Markets, the investment-management firm that represented the seller in the transaction. JLL Managing Directors Steve Mellon and Brian Somoza of the company’s National Self Storage Team were the brokers.

Founded in 2007, Storage Pros is a privately owned company specializing in the acquisition, development and management of self-storage facilities in the eastern states. The company owns 50 facilities and manages an additional five in Florida, Massachusetts, Michigan, New Hampshire and Tennessee. The properties comprise more than 3.2 million square feet of storage space, more than 28,000 units and more than 2,000 vehicle-parking spaces.

JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. The firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet. It completed $118 billion in acquisitions, finance and sales in 2014. Its investment-management business, LaSalle Investment Management, has $53.3 billion of real estate assets under management.

Founded by Tom Ireland in 1960, Ireland Cos. owns retail-shopping centers and two golf courses in Miami. University Pines Self Storage was its only self-storage property, according to the company website.

 

A self-storage development proposed for Saugerties, N.Y., has drawn the ire of local residents, although village planning-board members appeared to back the project during a recent public hearing. Real estate developer 42 Livingston Street LLC intends to build a 20-unit facility targeted at apartment residents who live in the area, according to the source.

Project engineer Khattar Elmassalemah told the board the facility would accommodate only foot traffic and provide off-street parking. Customers would need to either carry their items to their units or use a dolly. The facility would have perimeter fencing. As part of the project, the developer would repair the sidewalk along First and Livingston Streets, the source reported.

Resident Charles Perry spoke against the project, arguing the facility is unnecessary with four additional self-storage locations within a 5-mile radius, all with vacancies upward of 60 percent, according to the source. “There is no need for this,” he said.

Another resident told the board a self-storage facility targeting apartment renters would be a waste of time because the area includes 15 Section 8 housing units, and renters wouldn’t be able to afford self-storage. Section 8 housing “provides assistance to eligible low- and moderate-income families to rent housing in the private market,” according to the New York City Housing Authority website.

Tom Charest, who owns an apartment building next to the proposed site, told planners he believes the self-storage facility would actually make it more difficult to attract tenants. “These shouldn’t be in a residential neighborhood,” he said.

Town officials were generally more supportive of the project. Eyal Saad, the village’s code-enforcement officer, said the zoning for the property was for mixed business and commercial use. Board member Mary Leahy called the project “a disgrace,” but noted, “It can’t be about what we like but what the law says,” the source reported.

Board chair Jeff Helmuth said officials would accept written public comments about the self-storage project until the planning board’s next meeting on Aug. 11. Residents said they planned to submit a petition opposing the project with 61 signatures prior to the next meeting.

A resident self-storage manager at Highbanks Mini Storage in DeBary, Fla., was attacked and held captive this week by three masked men who snuck onto the property at 5 Sanctuary Ave. and knocked on the door of his mobile home. Paul Jones, 61, told investigators the men knocked on his door about 12:40 a.m. on Tuesday, repeatedly yelling his name and asking for help.

When Jones opened the door, two men entered the home, forced the victim into a corner and demanded money, according to Andrew Gant, assistant public information officer with the Volusia County, Fla., Sheriff's Office (VCSO). When Jones said he didn’t have any money, a third man came into the home and allegedly pointed a gun at his face and beat him, according to a source.

“They stuck a gun in his ear so badly that his ear is all cut up,” neighbor Barbara Brocious told local news station WKMG. Jones was also hit in the head with PVC piping, Brocious said.

The men then forced Jones outside and coerced him to open his personal storage unit, according to Brocious. The robbers locked the victim inside the trunk of the Ford Thunderbird he kept in the unit, while they rummaged through the trailer and unit, according to investigators.

Eventually, Jones heard the trunk of the car unlock, and the three suspects fled away in their vehicle, Gant said. When Jones exited the vehicle, he made his way to Brocious’ house and asked her to call 911.

Jones described the three attackers as young males, possibly 18 years old or younger. He told investigators they wore blue latex gloves.

"They took all those keys to the storage facility, both his cellphones, his billfold, which had $26 in it, and his pants," Brocious told the source.

Jones was treated for lacerations to his head at Florida Hospital Fish Memorial in Orange City, Fla.

Anyone with information about the case is encouraged to call the VCSO at 386.668.3830 or Crime Stoppers of Northeast Florida at 888.277.8477.

By Benjamin Burkhart

“It costs more and takes longer” is a fairly common sentiment among real estate developers. Obstacles to development, whether in finding the best sites or in planning and building the right project, slow the process and are hard on the bottom line.

Self-storage developers face unique challenges. Unattractive and outdated facilities pepper towns of all sizes nationwide. Terms like “mini-warehouse” or “discount storage” on signs next to eyesores with rickety gates, gravel driveways and overgrown weeds present inherent difficulties to the developer trying to build a modern-age storage property.

While there will always be development hurdles, these can be overcome through careful and efficient planning. From selecting the right parcel of land to watching your budget, here are some guidelines to help you surmount the trials that often come with building a new self-storage facility.

Choosing the Right Site

Self-storage has become a “darling” asset that’s reasonably viewed as having some resistance to economic recession. The potential to generate passive income with few employees while outsourcing competitive operations management makes the industry attractive to investors everywhere, and rightfully so. However, many think just about any parcel of empty land will do for a new development, and that’s simply not the case. You want to avoid oversaturated markets, sites that are too costly for a new build, or ones that come with zoning headaches.

One method you can use to target a site is geographic information system (GIS) analysis. By taking a macro look at a broad market, you can quickly identify pockets of competitor concentration, recent growth trends, forecasted growth, traffic patterns and zoning information. GIS provides a strong visual analysis of a broad market, allowing a developer to see the data that’s important to him.

   

For example, the purple graphic shows a geography north of Houston. The darker shades represent the areas with the highest forecasted growth by number of households. The green graphic shows the same geography but reflects median household income. The colored dots represent existing self-storage competitors. Such an analysis can provide a strong starting point for site selection.

Local real estate brokers will usually tell you, with genuine sincerity, that they understand what’s required for developing self-storage. However, unless they specialize in the industry, few truly comprehend it. Providing a high-level market analysis and targeted search strategy will create an efficient platform for vetting sites. Even if your broker isn’t the expert he thinks he is, you’ll be able to guide his search by directing him to target micro-markets with potential.

You want to target sites that have quality access and visibility as well as those that allow for storage development per zoning and local building codes. A site that isn’t visible to a favorable traffic pattern, isn’t convenient to the population or is undersized might be forced to compete on rental rates alone. That’s not a good plan for long-term investment.

If your suburban market demands 500 units, you probably need more than an acre, unless you can justify multi-story construction. You need parking for at least six cars and a moving truck at any one time. You want comfortable access for tenants, signage that’s bright, fresh and visible to local traffic, and curb appeal that’s inviting. You’ll also want an obvious office location that’s easily recognizable as the place to conduct business.

Ideally, you’d like some distance between you and the nearest competitor. However, if the competition is weak, perhaps a “better mousetrap” will perform well. Zoning often forces self-storage sites into clusters. If you have to build within view of other facilities, be sure your vision includes competitive upgrades to attract prospective renters.

Planning Your Project

Once you’ve moved from site selection into planning phase, more obstacles may arise. Zoning, code interpretation and busy professionals can slow the process. Plan for it and get ahead of it with the right team.

There’s sometimes hesitation or a desire to short-cut the concept stage of development. However, your vision should include renderings complete with landscaping, signage elevations and bird’s-eye views. Your design team (often an engineer and architect) can help guide the project so it suits local codes and ordinances. Environmental issues, green-space requirements, long-term community development, out-parcels, right-of-ways, setbacks and traffic flow must all be identified and clearly defined.

It’s difficult to get a variance or favorable interpretation of codes if your ideas aren’t apparent to everyone looking at your plans. “Self-storage” or “high-end personal storage” doesn’t carry the same connotation with everyone. Spend the money to cast the vision correctly from the start. Hire an architect to create pretty pictures. Be willing to commit to the appropriate efforts from concept to final submittals and avoid ambiguity.

Planning your new site will take several months, even if you’re laser-focused. If you don’t know the answers, have people around who can provide guidance. As the leader of your development project, you’ll avoid a lot of obstacles by making sure you have team members who can answer questions when they arise.

Of course, politics often burden the self-storage developer. Know the political landscape surrounding your project and talk openly with the people who can have administrative influence over it. Your development team should have clear understanding of the approval process and set out a strategy for moving through it.

Working the Budget

Now, the budget. Here’s where many new to the industry struggle the most. Again, it’s critical to have a plan, and don’t make decisions on the fly. There’s much more to development costs than most people think, and a lot has changed since the last self-storage construction boom. Be prepared with adequate financing for hurdles and changing requirements. What’s reasonable? Below are some budget ranges and timelines for an average-sized project.

There are also other items to include in your budget, such as rezoning. This varies among markets, but you want to add 25 percent to 50 percent to your total predevelopment costs. Understand the reasonable timeframe in your specific market.

You’ll also want to budget at least $2 per square foot of gross-building square footage for miscellaneous expenses. With changing energy and fire codes, $3 to $5 per square foot might be a better estimate.

The above ranges make sense but may not apply to your specific market or site. Averages only help you set reasonable expectations for your budget. Do your homework to answer all questions and identify costs of all line items on the front side of your project to avoid surprise items that become necessities down the road.

Much new development is on the horizon. Being efficient in site selection and planning your new project will help you find and create better self-storage assets that will enable your investment to achieve the best return.

Benjamin Burkhart is owner of BKB Properties in Powhatan, Va. As a consultant to the self-storage industry, he specializes in feasibility studies, acquisition due-diligence and loan-package preparation. He can be reached at 804.598.8742 or [email protected]. For more information, visit www.storagestudy.com.

Westport Properties Inc. (WPI), which operates 85 self-storage facilities under the US Storage Centers brand, has appointed Mike Brady as chief operating officer, effective immediately. Brady has been WPI’s vice president of operations since 2005. In his new role, he’ll oversee all aspects of operation for the company’s portfolio, including revenue management and third-party management. WPI’s senior management in the field will report to Brady.

"Mike has been an integral part of our team over the last 10 years, and the company has experienced significant growth under his leadership," said Charles Byerly, president and CEO. "He has developed and implemented exceptional initiatives that have increased revenue and occupancy, and I'm confident in his ability to lead our operations as we continue to grow."

Prior to joining WPI, Brady worked in various roles at Exult, Hewitt Associates and St. John Knits.

"Westport has significantly expanded its footprint across the self-storage industry in recent years, and I'm excited about this new opportunity to further contribute to that expansion," Brady said. "Our team is made up of an amazing group of talented individuals, and I'm confident that we'll continue to see increases in our revenue and the size of our portfolio."

Earlier this month, WPI appointed Scott Nguyen, a seven-year veteran of the company, as chief financial officer. In his new role, Nguyen will have significant involvement in the company's corporate strategy, investor relations and leadership.

Based in Irvine, Calif., WPI is a real estate investment company that acquires, develops and operates self-storage facilities as well as provides third-party management services. It's affiliated with Westport Memphis Self Storage LLC.