Phoenix-based U-Haul International Inc., which operates more than 1,300 self-storage locations across North America, is converting a former office building in Colorado Springs, Colo., to self-storage. U-Haul acquired the 201,515-square-foot structure at 6805 Corporate Drive on March 9, according to the source.

U-Haul Moving & Storage at Tiffany Square has a temporary showroom offering moving and packing supplies, trailer and truck rentals, towing equipment, and U-Box portable-storage containers. Renovations are underway to add more than 400 indoor climate-controlled storage units in varying sizes. Professional hitch installation and covered vehicle storage will be added later, the source stated.

U-Haul plans to hire 15 employees once the facility is fully operational, said Dave Hellmers, president of the U-Haul Co. of Southern Colorado. "This property had a bad reputation because it was always changing and nothing really stuck,” he added. “Utilizing this space will provide a much-needed product and service to this part of Colorado Springs while also helping the community with its goal to be more sustainable."

Established in 1945, U-Haul owns more than 44 million square feet of storage space. The company’s corporate sustainability initiatives, which support infill development to help local communities lower their carbon footprint, has led to dozens of conversion projects in recent years.

Jon Halverson, owner of Albion Self Storage in Edgerton, Wis., died Sunday after his lawnmower overturned. The 52-year-old Stoughton, Wis., resident is survived by his wife, Rachael, and adult children, Ben, 22, and Bailie, 18.

Halverson also owned Forever Sandfill & Limestone Inc. on Oak Park Road in Deerfield, Wis. Over the years, he clashed with nearby property owners, who claimed blasting at the site was damaging their buildings including St. Paul’s Liberty Lutheran Church, according to the source.

In response to the controversy, city officials passed new mining and blasting ordinances in 2015. Halverson called them “more restrictive than what makes sense” and “impossible to comply with.” He didn’t apply for a new license after his expired in December. The city approved a new mining operator’s license in March that would allow Halverson to sell the rock already mined on the site, the source reported.

Born in 1964 in Madison, Wis., Halverson graduated from Stoughton High School in 1983. He began working for the family business, Jim Halverson Trucking, when he was 16. Later, he opened several businesses including Jon Halverson Trucking Inc., Halverson Logistics Inc., J&R Halverson Farms LLC and JHTI Shop LLC.

Memorial services will be held at 11 a.m. on Saturday at West Koshkonong Lutheran Church in Stoughton. Visitation will take place 4 to 8 p.m. tomorrow at Cress Funeral Home in Stoughton, Wis., and 10 to 11 a.m. on Saturday at the church. A formal obituary can be found on the Cress website.

A man is in critical condition after a five-alarm fire broke out Tuesday morning inside a unit at Stateline Self Storage in Roscoe, Ill. The victim was conscious when airlifted to a local hospital, but suffered serious burns, according to a source.

Black smoke was visible for miles as the blaze destroyed six units and damaged the roof of the property at 12905 N. Second St. Vic Anucauskas, who owns the storage facility and the adjacent Annon Auto Sales, told the source his son first noticed the fire about 11:30 a.m.

The victim, whose name hasn’t been released, was a tenant of the facility, Anucauskas said. The man operated an auto-repair shop on the property and was working in the unit when the fire began.

Shari Ellis, a surgical technician, was working nearby at Advantage Chiropractic Wellness LLC when she noticed the smoke and headed to the site. As she was assisting the victim, he told her the fire started after a gasoline container was knocked over. Sources have provided contradictory reports on who tipped the can.

"I'm not sure what the ignition source was, but he said he had kicked the container out of his way and that's when his hands engulfed,” Ellis said, adding that the man’s hair, mustache and eyelashes were burned away. “And he was burned pretty much in the arms, his hands, his torso [and] was fairly burned. Apparently, he had to jump through the fire to get out of the building. He was going into shock and he was very afraid. He kept saying, 'I'm afraid.'"

Seventeen fire departments responded to the blaze. They were originally told the cars at a dealership on North Second Street were on fire, a source reported. Although the incident is under investigation, it appears to be accidental, Harlem-Roscoe Fire Department Chief Donald Shoevlin said.

While watching crews get the fire under control, Anucauskas expressed his concern for the tenant. "Buildings can be replaced. The gentleman who was in the building, I'm more concerned about."      

 

Entrepreneur Bryson Butts, a former pastor, has launched Stor and Deliver LLC, a startup business specializing in valet self-storage in the Wichita, Kan., metropolitan area. The company uses an online platform that allows customers to schedule item pickup, maintain a visual catalog of stored belongings, and schedule delivery of items to their home.

While other valet-storage operators have concentrated on by-the-bin storage and delivery services, Stor and Deliver targets residents who don’t have adequate home storage by offering five space packages ranging from “Micro” to “Huge.” Items are stored in a climate-controlled, secure warehouse, with space designated based on cubic feet. The Micro package provides 320 cubic feet for $79.95 per month, while the Huge plan offers 2,048 cubic feet for $247.50 per month, according to the company website.

Individual items and bins are photographed and marked with barcodes for identification and retrieval. Customers aren’t allowed to visit the storage warehouse but can manage their belongings and schedule return deliveries through the company’s mobile app or website. They can follow their delivery driver’s location and estimated time to their destination through the app, according to the website. The company charges the same amount for pickups and deliveries, but doesn’t publicize the fee totals. “We [charge] based on how much stuff you have,” Butts told the source.

Butts was previously a pastor at GracePoint Church in Wichita and is partnered in several businesses, including three uBreakiFix stores, which specialize in smartphone repair. He started Stor and Deliver after he and his wife, Susan, grew tired of trying to locate items in their traditional self-storage unit. “Personally, I would get depressed every time I had to go over there and get any of my stuff,” Butts told the source. “Invariably, it’s in the back of the storage unit.”

The company could expand its service area in the future, Butts said. The company website identifies nine cities targeted for expansion, including Des Moines, Iowa; Kansas City, Mo.; Oklahoma City; and Omaha, Neb.

Strategic Storage Growth Trust Inc. (SSGT) and Strategic Storage Trust II Inc. (SST II), both public, non-traded, self-storage real estate investment trusts (REITs) sponsored by SmartStop Asset Management LLC, have released their financial statements for the quarter that ended June 30. In general, the entities showed gains in revenue, net operating income (NOI) and occupancy.

SSGT increased same-store revenue by 15.6 percent, with NOI growing 44.1 percent, compared to the same period in 2016. Same-store occupancy was 94.8 percent as of June 30, up from 89.3 percent the previous year. The REIT also reported growth in same-store annualized rent per occupied square foot, showing an increase of 9.8 percent ($12.11) year over year. Modified funds from operations (FFO) grew $700,000, though the company reported a net loss of $1.1 million.

During the quarter, SSGT closed on two self-storage acquisitions in Asheville, N.C., and Sarasota, Fla., for approximately $17 million. Combined, the assets comprise 173,000 net rentable square feet in 1,345 units.

“Our second-quarter results represent our fifth consecutive quarter of double-digit growth in same-store revenues and NOI,” said H. Michael Schwartz, chairman and CEO of both REITs. “This trend is a testament to our investment strategy of buying growth-oriented assets and driving performance.”

SST II increased total revenue by about $9.3 million, a 95 percent bump compared to the second quarter last year. Same-store revenue grew 11.6 percent, while NOI showed a 23.2 percent increase year over year. Modified FFO grew $2.7 million, or 119 percent, though the company reported a net loss attributable to common shareholders of $3.5 million.

Same-store occupancy was 93.3 percent as of June 30, up from 89.9 percent the previous year. The REIT also reported growth in same-store annualized rent per occupied square foot, showing an increase of 6.2 percent ($13.62) year over year.

SST II didn’t close on any acquisitions during the quarter.

“Our second-quarter same-store results show the continued execution of our strategy: acquiring quality assets in strong markets and recognizing greater revenues as the properties mature,” Schwartz said.

SSGT focuses on the acquisition, development, redevelopment and lease-up of self-storage properties. Its portfolio currently consists of 20 storage facilities in nine states comprising approximately 1.5 million net rentable square feet in 12,900 storage units.

The SST II portfolio includes 83 self-storage facilities in Canada and the United States. It comprises approximately 51,300 self-storage units and about 6 million rentable square feet of storage space.

Both REITs are sponsored by SmartStop Asset Management, a diversified real estate company with a managed portfolio of 107 self-storage facilities in Canada and the United States. Its managed properties comprise approximately 7.8 million rentable square feet.

Schroders PLC, a global investment-management firm, has entered the self-storage market with the purchase of a five-property portfolio in London for £44M. The Schroder UK Real Estate Fund (SREF) acquired the facilities from The Self-Storage Co. The assets total more than 230,000 square feet of storage space, according to the source.

As part of the deal, SREF will acquire The Self Storage Co. brand and intellectual property. It plans to retain the company’s staff to manage the portfolio, the source reported. The fund will also look at expanding through acquisitions.

“The growth in demand [for] self-storage is inextricably linked to key demographic trends that are driving demand for real estate,” said James Lass, fund manager at SREF. “The way we use space is changing like never before, and consumers are now increasingly looking for flexible storage in response to shifting demographic trends for a variety of different reasons.”        

Founded in 1804 and headquartered in London, Schroders has 41 offices in 27 countries. It’s traded on the London Stock Exchange.

A self-storage owner is facing opposition from city planning staff to build a $6 million office park that will include storage in East Topeka, Kans. Frank Meade, owner of Aeolian Mini-Warehouse & Storage, is seeking a zoning change to build 16,000 square feet of office space and 500 storage units on a 10.7-acre plot at the northeast corner of S.E. 29th Street and Wittenberg Road. Currently zoned residential, the site is near the foot of the dam for Lake Shawnee, an 1,100-acre recreation area.

In an Aug. 11 report, the city planners said they would advise the planning commission to reject Meade’s request during its Aug. 21 meeting, according to the source. The report stated the proposal “is not compatible with the general character of the neighborhood and threatens to degrade the value of Lake Shawnee as a recreation destination enjoyed by many city and county residents.”

Meade has asked the commission to delay voting on the project for a month to allow him to address some of the staff’s concerns, such as the storage facility’s size, the potential loss of area vegetation and the aesthetic of the office buildings. He’s working with Landplan Engineering PA to create an attractive façade for the storage structures, which would be north of the four office buildings. “We’re actually putting windows and rock columns in. We’ve gone to extremes to make the storage buildings not look like self-storage,” said Meade, who’s been working on the proposal for about six months.

The storage facility would offer traditional storage, vehicle storage and 174 climate-controlled units powered by Lennox solar-powered air-conditioning systems. “We’re going to be using the new, ultra-thin solar film on the roofs. You won’t see big panels sitting there. We’re going to try to come close to generating all the electricity,” Meade said.

Revenue from the storage units is expected to support the financial investment needed to build the office park, which is set up as a planned unit development. “It’s unrealistic that we can pay for these projects with the offices,” Meade said. “We have to get a lot of people in; the buildings are very expensive to build. They’re not high-return items. The storage, in essence, is the engine that we hope keeps this thing alive.”

The front of the complex facing 29th Street would include a series of office buildings. Phase one would feature a 4,000-squre-foot building, with up to three structures added as needed. Housing could eventually be developed on the back of the lot where the terrain is rough, Meade said.

The plans include leaving many of the area’s trees intact a well as accommodating the expected widening of 29th Street to five lanes. Initially, the entrance to the site was off Wittenberg. The street widening would allow the buildings along the front of the park to be used for retail or restaurants, Meade added.

“We’re taking a big risk. But we will never know if East Topeka’s going to grow or not until somebody does this,” said Meade, who has lived in the area all his life and owned commercial printing firm Zercher Photo, a 112-year-old business, for 22 years until its closing in 2012.

“I can’t guarantee people are going to come there,” he added. “I can’t make them come there, but we won’t know and we won’t have a chance to develop on the east side of Topeka unless we have this kind of stuff available.”

Aeolian Mini-Warehouse & Storage operates five facilities in Auburn, Lawrence and Topeka, Kans. Three of the properties offer vehicle storage.

By Barry Sharpe

The property-appraisal process is imperfect, and there are no national standards. Real estate moguls like Donald Trump use this to their advantage when it comes to reducing their property-tax assessments. Why shouldn't self-storage owners do the same? Here’s what you need to know.

Real Estate vs. Income

In addition to the rental of space, self-storage facilities have other sources of income, including truck rentals and the sale of moving and packing supplies. Storage properties are mainly purchased for the income they can generate rather than their potential as appreciable real estate. Therefore, a property assessment based primarily on a facility’s sale price—in which a buyer paid for income potential—may result in the overpayment of property taxes.

Mass Appraisal and Intangible Assets

It’s also important to understand that appraisers don’t assess each property individually. Instead, they use mass-appraisal techniques and often don’t factor out intangible assets, which shouldn’t be taxed as real estate. Intangible assets have no physical substance and can’t be seen or touched. While it’s true they have value, they shouldn’t be included in the property assessment. They include things like:

• Corporate intellectual property (patents, trademarks, copyrights and business methodologies)
• Marketing and management skill
• An assembled workforce
• Working capital
• Contracts, leases and operating agreements
• Goodwill and brand recognition

The business enterprise value of a self-storage property includes the value contribution of the total intangible asset, including a company’s trade name. Brand recognition can increase a property’s revenue. For this reason, some appraisers assess an enhancement value to brands like Trump, Marriott, McDonald’s, etc. However, this should be irrelevant to a tax assessor. Although a popular brand name may make your property more attractive to customers, it should have no taxable market value.

In effect, the more value that gets placed on a brand name as part of a tax assessment, the stronger your argument should be to lower the valuation. Just as Trump has taken advantage of this aspect, it’s possible that someday self-storage companies like Public Storage and U-Haul will also be able to reap the benefits.

An assessment requires judgment on the part of the property-tax assessor. In each case, he’ll use comparable sales as part of his analysis. The more adjustments he must make to account for intangibles, the less reliable the assessment will be. That, my friends, makes it easier for the self-storage owner to make a compelling argument for lowering his assessment and tax bill.

Challenge the Tax

Remember, questioning your assessment is your right as a taxpayer. Why shouldn't we all be like Trump and avoid unnecessary property taxes? You should take advantage of what’s permitted by law. A smart business owner challenges his assessment to ensure he’s taxed fairly.

No two properties are ever exactly alike, and that can be used to your advantage. Explaining why your property is “inferior” can result in reductions. Your description of your property is your opinion of its value, and it can be fun and rewarding to present it to an assessor as though there’s a large, black cloud hovering above it—particularly if it gets you a lower tax bill or a refund.

In your quest for tax relief, cite capital improvements, income and expenses as well as deferred maintenance. With a proper presentation, your challenge can lead to a full or partial victory. If your assessment isn’t lowered, you can at least feel good knowing your property hasn’t been over-taxed. There must be a reason why Trump files property appeals year after year. Apparently, it produces good results.

Be your own best advocate and argue for a lower valuation. Nationally, less than 5 percent of taxpayers appeal their assessments. If you obtain a tax refund, it won’t make a dent in the country’s economy, but it will certainly improve your cash flow.

Barry Sharpe is a managing member and principal at Hialeah, Fla.-based Property Tax Appeal Group LLC, where he oversees every property-tax appeal case filed with the county's Valuation Adjustment Board on behalf of clients. Barry has done tax-assessment appeals for more than 30 years. He's also the owner of industrial and commercial properties, a real estate broker and a licensed building contractor. To reach him, call 305.693.3500; e-mail [email protected].

West Coast Self-Storage Group has developed and opened a new facility in Shoreline, Wash., near Sheridan Beach. The property at 14535 Bothell Way N.E. comprises 64,780 rentable square feet of storage space in 696 climate-controlled and drive-up units. It offers a covered loading/unloading area, U-Haul truck rentals, and a retail store that sells moving and packing supplies.

The facility was designed by Stephen Bourne, an architect with the firm Site + Plan + Mix LLC and built by SEA CON LLC, an Issaquah Wash.-based general contractor and construction-management firm.

“We’re thrilled to be opening our newest facility in Shoreline. It represents our continued goal of offering customers a higher level of self-storage amenities and service,” said John Eisenbarth, vice president of operations for West Coast. “Shoreline is an ideal location for this facility. The city has continued to grow consistently over the last decade with an influx of young people and families.

The company recently opened a new property in Auburn, Wash. The site comprises 69,800 rentable square feet of storage space in 733 climate-controlled and drive-up units.

West Coast is a self-storage acquisition, development and property-management company headquartered in Mill Creek, Wash. It currently has 41 managed and owned locations, including 28 in Washington, seven in Oregon, and six in California.