Capitol Self Storage in Tucson, Ariz., recently sold from Capitol Storage Properties to U-Haul affiliate AMERCO Real Estate Co. for $1.7 million. The 36,000-square-foot facility at 6755 East Golf Links Road was built in 1987. It comprises 444 units on 2.3 acres. Features include high street visibility, all-steel construction and an onsite residence. U-Haul is adding this site to its already extensive list of Arizona properties.

This deal was a desirable acquisition for U-Haul due its close proximity to Davis-Monthan Air Force Base and the high demand for self-storage and truck rentals services. U-Haul will be upgrading the existing self-storage facility and operating the property without onsite personnel from a remote location, said Stephen Grossman, a broker in the Orange County, Calif., office of  NAI Capital, which represented both buyer and seller.

AMERCO is the parent company of U-Haul International Inc., Oxford Life Insurance Co., Repwest Insurance Company and Amerco Real Estate Co. Established in 1945, U-Haul has 36 million square feet of storage space at more than 1,000 owned and managed facilities throughout North America.

Based in Encino, Calif., NAI Capital is a commercial real estate firm with 14 offices throughout California. The company is the Southern California affiliate of NAI Global, a real estate service network with 350 offices worldwide.

StoreRight Self Storage is expanding its presences in the Florida self-storage market with the purchase of a fifth facility in Vero Beach for about $3.1 million. The seller was Vero Stow-A-Way LLC.

The facility has 62,000 square feet of rentable storage space and more than 500 climate- and non-climate-controlled units. It also offers RV and boat storage, Penske truck rental, indoor and drive-up storage, and an onsite manager.

Headquartered in Lakeland, StoreRight Self Storage launched two years ago. The company also has facilities in Brooksville, Lecanto, Ocala and Winter Haven. Mathew Clark, vice president of acquisitions, said StoreRight will continue growing with more acquisitions and hire new staff as needed. The company currently employs about 15 people.

North Henry Self Storage in Ellenwood, Ga., and All-American Self Storage in Warner Robins, Ga., were recently sold in separate transactions.

The Ellenwood facility at 1955 Panola Road sold for $2.4 million at an 8.47 percent cap rate. The 48,281-square-foot property was 87 percent physically occupied at the time of sale. North Henry Self Storage, built in 1986 and renovated in 1999, comprises 181 conventional storage units, 43 climate-controlled units, 69 outdoor parking spaces and 15 offices/warehouses. It sits on 6.5 acres.

Henry County is one of the nation's fastest-growing counties. The area has experienced strong population growth since 2000.

All-American Self Storage at 202 Osigian Blvd. sold for $2.5 million at a 15.07 cap rate. The 38,675-square-foot property was 70 percent physically occupied at the time of sale. Built in 2002, the facility has 262 climate-controlled units and sits on 2.59 acres.

Warner Robins has experienced 129 percent population growth since 2000. The market's median household income is $55,326.

Stacey Gorman of Marcus & Millichap Real Estate Investment Services represented the buyers and sellers of both transactions. Gorman joined the company in 2002 and has actively negotiated the sale of more than 45 properties representing more $96 million in real estate. She specializes in self-storage transactions.

A popular mural that has graced the side of a multi-story Planet Self Storage facility in Bostons South End since 1998 may become obstructed by a new development project planned for the parking lot next door. The giant mural depicting killer whales has become a landmark for motorists traveling along the Southeast Expressway and has provided the self-storage business with tremendous exposure since it was painted by commissioned artist Ron Deziel.

Normandy Real Estate Partners has plans to build an 11-story hotel and an 18-story apartment complex that would likely block a significant portion of the mural.

Bryce Grefe, an owner of Storage Investment Management Inc. (SIMI), which has managed the Planet Self Storage location since August 1998, said he is hopeful some of the mural will remain visible. Although he acknowledged the construction will impede the buildings  visibility, Grefe said he does not expect the project to adversely affect the facilitys business.

The current artwork is actually the second whale mural to adorn the storage building. The first was covered by the buildings owners after extensive repair work was necessary. The current mural also was covered for nearly two years between 2007 and 2009 in favor of an iPod advertisement.

Planet Self Storage operates several facilities in Connecticut, Massachusetts, New Jersey, New York and Pennsylvania. SIMI offers facility-management and consulting services in the Northeast and mid-Atlantic regions. Its principals also own self-storage facilities.

By Jim Jones

Planning is as natural to the process of success as its absence is to the process of failure.

~Robin Sieger, author of Natural Born Winners

Everyone has an estate plan. Your current plan either benefits your family or benefits lawyers and the government. Which plan do you have?

Using a few legal documents, self-storage operators can create an effective estate plan, and prevent up to 50 percent of their estate from being lost to unnecessary probate costs and wealth-destroying death taxes.

What Is Probate?

Probate is the legal process by which a court distributes the assets of a deceased person according to the last will and/or state law. The court first determines the validity of the will, and then resolves all claims from creditors and competing claims from heirs.

There are three main reasons why you want your estate to avoid probate:

• Its expensive. Up to 10 percent of your estate can be lost to probate costs alone. Costs may include court fees, legal fees (to the executor of the estate or to resolve disputes), appraisals and accounting services.
• Its a lengthy process. While its possible for an estate to be probated in six to 12 months, its also common for the process to take years.
• Its an invasion of privacy. Your entire estate will become a matter of public record during the probate process. Anyone can go to the courthouse and learn what assets are in the estate, their value, and to whom the assets are to be distributed. There are instances of dishonest people searching probate records trying to identify and claim the assets of an estate.

Why Some Attorneys Recommend a Will

Many attorneys recommend their clients create a will without a living trust. This ensures the estate will go through probate. Why? Because attorneys dont always have their clients best interest in mind. The attorney wants to collect the legal fees associated with probate and, in some states, the attorney receives a percentage of all the assets that go through probate. Probate is time-consuming, costly and public. The only person that benefits from your estate going through probate is the attorney.

Can You Use Joint Ownership to Avoid Probate?

You can avoid probate by holding assets in joint ownership, but there are several problems with this approach. For example, a couple built a farm worth several million dollars. An estate planner advised them to own the farm in joint ownership with their four children to avoid probate. A few years later, the parents and one of the adult children were killed in a car accident. The farm did avoid probate, since the assets went to the three surviving children as joint owners, but the spouse and children of the child that died were disinherited.

Furthermore, whichever of the surviving three children who outlives the other two will eventually own 100 percent of the farm. The descendants of the other three children will lose everything. Even a will doesnt ensure the deceased persons wishes are followed because property held in joint ownership, in almost every instance, goes to the surviving joint owner(s).

Need another example of the danger of joint ownership and using a will as an estate plan? A couple, Ed and Mary, had three children. After Mary died, Ed remarried and had a fourth child, Tom, with his second wife. Eds will specified his desire for the estate to go equally to his four children. However, all of Eds assets were owned in joint ownership with his second wife, and upon Eds death, she, as the joint owner, became the sole owner of the estate. She instituted a plan to have all the assets go to her only child (Tom) on her death, completely excluding Eds other three children. Eds wish for his assets to go equally to all four of his children went tragically unfulfilled.

Setting Up an Estate Plan

The key document to an effective estate plan is a revocable living trust, which enables you to avoid probate, keep your estate private, and reduce or eliminate estate taxes. It also ensures your assets quickly transfer according to your wishes upon your death. With a revocable living trust, no court action is involved, and the property is distributed privately.

Other documents frequently used in conjunction with a revocable living trust include a living will, pour-over will, medical power of attorney, durable power of attorney, and irrevocable life-insurance trust.

Setting Up a Living Trust

A living trust is a legal document created during your lifetime and is revocable, which means you can amend, alter or cancel the trust at any time prior to death. Setting up a trust is a simple process.

First, you name the trust. Typically, its named after the individual or couple setting up the trust, such as The John and Jane Doe Living Trust. Next, you specify where you want your assets to go upon your death(s). Once you sign and notarize the living trust, its a legal and binding document. You are not required to file with the state, you do not need a Tax ID number, and there are no filing fees or tax returns.

A living trust provides no income-tax savings, and for income-tax purposes, its as if it doesnt exist. However, if the size of your estate is above the amount exempted from estate taxes, the trust can be structured to reduce or eliminate estate taxes.

Once the trust is notarized, you need to fund the trust. Funding the trust is the process of transferring ownership of your assets to the trust. For titled assets (bank accounts, cars, stocks, etc.), you change the ownership of the asset to the name of the trust. For real estate, new deeds are filed with the county recorder where the property is located. For assets without title (jewelry, artwork, antiques, etc.), you simply list the items on the Schedule A of the Trust. You would also write a description of the items, such as "American Heritage billiard table, brown leather couch and diamond wedding ring."

You can also fund the trust indirectly by transferring your interest in other entities. For example, if you hold assets in family limited partnerships or LLCs, the trust can hold your interest in these entities. Its important to remember any asset not funded in the trust will pass through probate.

The vast majority of Americans dont have an effective estate plan in place when they die and, by default, subject their heirs to the frustrations and costs of probate. Setting up a revocable living trust enables you to pass assets to your heirs efficiently, and is one of the most loving things you can do for your family.

Jim Jones is the director of legal services for the American Society for Asset Protection. To receive the complimentary 80-minute audio CD, Advanced Lawsuit Protection, Tax Reduction, and Estate Planning Strategies, send your name and mailing address to [email protected] . For more information, visit www.americansocietyforassetprotection.com.

OpenTech Alliance Inc., a Phoenix-based provider of self-storage kiosks and call-center services, has partnered with PTI Security Systems Inc. to be the exclusive distributor of PTI's electronic door-lock system for self-storage. Now branded the INSOMNIAC ILock, the wireless, battery-powered lock secures the door on individual storage units by preventing movement of the hasp to the open position.

Nicknamed MAXXand presented as a virtual "little brother" to OpenTech's Megan customer-service technologythe new door-locking system provides security and access for occupied units as well as automated overlocking and protection for vacant units. With the ILock, if an existing tenant becomes past due on rent, he is automatically denied access his unit.

Over the past two years, the system has been used successfully by self-storage operators who wish to automate their operations.  My Stuff Storage in Clinton, Tenn., was built to run exclusively via the ILock. "My Stuff Storage operates using self-service automation and minimal staff. The INSOMNIAC kiosk and ILock limits our payroll expense to two to four man hours per week and offers our customers a secure experience when renting and making payments," said facility owner Bill Schubert.

Established in 1979, PTI develops and manufactures access-control and security systems for self-storage and other industries. The company's Digitech and PTI branded products include access controllers, keypads, software and more. The company has installed more than 25,000 security systems in more than 30 countries.

OpenTech develops and provides automation and service solutions for the self-storage industry, including seven models of INSOMNIAC self-service kiosks, self-storage cloud services, INSOMNIAC Online Web and mobile applications, the INSOMNIAC Live! call center, and the INSOMNIAC Self Storage Network for online storage reservations and rentals.

Looking back at the first nine months of 2012, theres no doubt the real estate transaction market has improved significantly, and with it, the pressure to overprice properties has increased. This is due primarily to the two most critical factors that affect a fluid transaction market: the ability to finance an acquisition, and the buyers and sellers perception of fear or greed in the market.

With more than 50,000 self-storage properties around the country, theres bound to be an owner whos contemplating parting with his beloved facility on a daily basis. However, weve learned theres a material difference between thinking about selling and becoming an actual seller. Eventually, almost everyone will end up being a seller; its a matter of when that concerns most owners. Thinking through the following factors will help you determine how close you are to becoming a real seller, which will help maximize your investments return.

Personal Issues

Retirement, estate planning, partnership problems, liquidity and divorce are just a few things that make owning an investment property difficult. Experience has shown the vast majority of self-storage sales are a result of a personal issue and not what real estate brokers would consider a market-driven issuea sale that takes advantage of the market conditions or concern for the future market. This proclivity to make the final decision based on personal issues is entirely appropriate, but with a little planning and forward thinking about the current market, a small adjustment in the timing of a sale (one to two years) can be very rewarding.

Competition

Another factor affecting the decision to sell is increased competition, or even future competition. We're seeing many local markets that are seriously affected by larger, more sophisticated operators. In addition, the prospect of new competition being built is coming back into the picture after a five-year hiatus.

Capitalization Rates/Ability to Finance

Capitalization (cap) rates are the shorthand way real estate professionals talk about values. In short, the lower the cap rates, the higher the real estate prices are in the current market. Todays cap rates are near the lowestthe highest pricesthat theyve been in the last 40 years! This change in cap rates is almost exclusively related to the unprecedented lower interest rates the market is experiencing.

One material difference in the market today is the low cap rates being paid are almost exclusively in major cities such as Chicago, Los Angeles, New York and San Francisco, whereas the rest of the country is seeing more historical norms. This is the new reality all potential sellers must understand. Properties in non-major markets will continue to see higher cap rates (lower values), as the market has consistently valued these properties at higher cap rates for the last few years. This is unlikely to change any time soon.

The low interest rates have also created tremendous opportunity for smaller investors because there are many compelling opportunities within smaller markets. With the cap rates 100 to 400 basis points higher in smaller markets, and with interest rates in the 4 percent to 6 percent range, it has created an arbitrage play within smaller markets worth considering.

Are You a Seller?

Determining if and when youre a real seller is the single most important step in the process of your investment. This is someone who has a defined reason to sell and is willing to price the sale at a level thats within the market of the property. Serious buyers want serious sellers, and when a buyer finds out a seller isnt realistic about selling because of price, timing or market conditions, serious buyers will seldom get interested again. The result is a non-serious seller offends his best prospectsand they will remember. Over pricing is not harmless.

Experience has shown that motivated sellers who are willing to accept a price thats reasonable in the marketplace will, in fact, see their property sell in a reasonable amount of time. This doesnt mean you have to accept a lowball offer, it simply means a deal is made so you get a fair value for your investment, and the buyer gets a fair value for the future potential of the property.

In summary, prices are strong and the uncertainties of the world never less settled, so if youre at or near one of those personal crossroads, its time to get serious about selling. These high prices will not last forever, maybe not even much longer. If youre thinking about selling in the near term, you should hurry while qualified buyers are scrambling to take advantage of the lowest interest rates in history.

Ben Vestal is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to self storage buyers and sellers and operates SelfStorage.com, a marketing medium and information resource for facility owners. For more information, call 800.55.STORE; e-mail [email protected] .

Self-storage operator Pogoda Cos. recently acquired the Stop N Lock VII storage facility on Plymouth Road in Ann Arbor, Mich. The 53,000-square-foot facility will undergo renovations and be rebranded under the National Storage Centers name.

Plans include adding climate-controlled units, painting, remodeling the office, and installing surveillance cameras and a security system. Lifts will be added to provide customer access to second-floor spaces. Other changes include resurfacing the asphalt and adding cosmetic improvements, such as landscaping. The facility currently has 550 units.

This is a distressed property that has long been neglected. We have five other properties in the Ann Arbor market, and this one fills a gap in our coverage, said Maurice Pogoda, company president. Ann Arbor is one of Michigans strongest markets. It has consistently low unemployment rates and an upscale clientele supported by the growth engine that is the University of Michigan. We see this acquisition as another excellent opportunity to carry on our practice of buying strategically located properties that can benefit from our professional management.

Pogoda also recently sold a National Storage Center facility in Grand Blanc, Mich. The company had managed the property for 17 years but sold it when the owner decided to retire. The 35,000-square-foot facility offers more than 250 units and RV parking spaces on more than five acres. The asking price was $975,000.

We had great success managing this property, Pogoda said. The economic growth in the Grand Blanc area is phenomenal. When we started managing it in 1995, the property was surrounded by cornfields. Now, there are shopping centers and every other conceivable type of development. Its a great property with a lot of potential, and we would have considered buying it but it is smaller than our standard sized store. So, we brokered it instead.

Based in Farmington Hills, Mich., Pogoda Cos. is a self-storage operator and broker with 39 facilities and approximately 3 million square feet of self-storage space in Michigan and Ohio. The firm provides brokerage, management, investment and consulting services to the self-storage industry through its Pogoda Group Inc. and Pogoda Management Co. divisions.

Stor-Age, the largest operator of self-storage facilities in South Africa, has begun a phase-two expansion of its facility in Tokai with the addition of two floors. This phase will add approximately 3,000 square meters of storage space. It will also include a rebranding of the existing facade, adding height and visibility to the company's first "big box" development.

Stor-Age Tokai was originally developed in 2009 with more than 5,000 square meters of rentable area over three floors.

Stor-Age operates almost 20 self-storage facilities throughout South Africa, with a corporate office in Cape Town.