Phoenix Partners LLC received zoning approval last week to convert a former Kmart store in Roanoke, Va., to interior, climate-controlled self-storage. The 84,000-square-foot building on Franklin Road closed last year, according to the source.

During the Aug. 8 hearing, attorney Cooper Youell, who represented the developer, said the firm originally purchased the 1970s structure to create a grocery store or big-box retail space. It soon learned potential tenants weren’t interested in these uses due to limited market growth in the area, competition with online sales, and the orientation of the building, which doesn’t face Franklin Road.Phoenix Partners plans to relocate the main entrance, update the façade and add new landscaping.

About a third of the 11-acre parcel could be used for outparcel development, the source reported. Prior to the vote, Barbara Duerk, president of Neighbors in South Roanoke Inc., asked the developer to collaborate on a plan for the outparcels.

Phoenix Partners is led by B. Painter, Bland Painter and Joe Thompson, the source reported.

Source:
The Roanoke Times, Permit OK'd to Convert Former Roanoke Kmart Into Indoor Self-Storage Facility

Real estate development firm Miller-Valentine Group and self-storage developer Coastal Storage Group have completed construction on a three-story self-storage facility in North Charleston, S.C. The property comprises 90,000 square feet at the intersection of N. Rhett Avenue and Sumner Avenue, according to a press release. The property will be managed by Extra Space Storage Inc., a real estate investment trust and third-party management company, and branded under its name.

Miller-Valentine and Coastal are also jointly developing a three-story storage facility in Murrells Inlet, S.C. In March, they completed construction on a similar property in Goose Creek, S.C. Both projects include “commercial-grade” climate control.

Founded in 1963, Miller-Valentine provides design/build construction, development and property-management services in the Midwest, Southeast and Southwest. The company has built more than 83 million square feet of commercial space and more than 16,000 residential housing units.

Based in Charleston, S.C., Coastal was founded in 2016 by Brent Case of CBC Atlantic, Steve Koewler of the Miller-Valentine Group and Aaron Rowley of Dominion Holdings Inc. The company owns five self-storage facilities in the Charleston market.

Headquartered in Salt Lake City, Extra Space owns or operates 1,568 self-storage properties in 39 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.09 million units and 119 million square feet of rentable space.

Trends in zoning regulations and political attitudes toward self-storage seem to be shifting. Historically, many cities forced storage into industrial areas. Over the last several years, however, there’s been a more relaxed approach, allowing projects onto commercially zoned property. Now, a growing desire for more pedestrian-oriented developments in those areas may be incompatible with the self-storage use. In addition, recent legislation and moratoriums in states including Colorado, Florida, New York and Washington are creating additional barriers to storage development.

Fortunately, facility owners and developers can renew their strategic approach with local governments and neighbors who may oppose storage uses. By paying attention to zoning-code interpretation, design and education, they can successfully navigate the maze of challenges and deliver new facilities to the market.

Examine the Codes

As the saying goes, “The devil is in the details,” and the adage certainly fits when reviewing zoning codes. Calling the planning department to inquire whether self-storage is allowed will frequently result in a negative response; and a cursory review of a use chart may prove fruitless. Yet you can still explore the regulations to see whether they might be interpreted to allow the use. If a city has a mixed-use zoning, it’s worth investigating to see if the addition of a small, sidewalk-oriented retail space or office can create the mix of uses that satisfies the code requirements. It’s a step developers often overlook.

In addition, elected officials are sometimes open to changing the code to allow self-storage, with stipulations on size, interior access and other elements to prevent that outdoor warehouse-style most people associate with these facilities. Land-use attorneys who have relationships with planning staff can be a valuable resource for making connections, analyzing the code and providing insight.

By looking into the codes and thinking outside the box, you might determine self-storage is actually authorized when at first glance it didn’t seem likely. Being creative with code interpretations and proactive with your approach will, at a minimum, set the stage for a discussion and move the project one step closer to realization.

Change Perceptions

“A picture is worth a thousand words” isn’t just an idiom; it can be the key to changing the perceptions of planning staff, elected officials and neighbors. One of the often-overlooked benefits of self-storage is the flexibility in exterior design. Developers who are willing to design a building that reflects the desired aesthetics of a neighborhood may have more luck with approvals. It’s not uncommon to meet with a planning director who has a negative opinion of storage—until he sees the pictures. Recent projects have embraced modern design and adopted an architectural style that’s substantially like popular and successful mixed-use developments.

A focus on style shows the developer is interested in partnering with the community and adopting the vision residents and officials have for the area. Those outside the industry spare little if any thought for the many design types that can be employed for a storage building or the fact that it can be designed to fit any community. Exploring a more upscale design, and demonstrating that vision through pictures, is an extremely useful tool getting zoning approval.

Educate Your Audience

It’s essential to acknowledge that most elected officials, planning directors and neighbors know little about the business. A warehouse with drive-up access is what most people think of when storage is mentioned. Using that as a starting point, create an education strategy that addresses the benefits of self-storage over other commercial or retail uses. For example, traffic congestion ranks high among complaints from residents in growing markets, so the low volume of trips per day generated by a storage facility can be particularly appealing in those areas.

To maximize your potential for changing opinions and gaining support, it’s vital to edify government officials and other neighborhood stakeholders. Engaging and educating increases your chances of success.

The emphasis on pedestrian-oriented development isn’t a passing whim but a shift in the way people live. Finding creative approaches to zoning approval will likely continue to be a challenge for self-storage. By delving into the code, being flexible with design, and engaging and educating officials and neighbors, self-storage will continue to grow in desired markets.

Julie Sellers is a partner at law firm Pursley Friese Torgrimson in Atlanta. Her practice focuses on advocating zoning and land-use requests for property owners, builders and developers. For more information, call 404.876.4880; e-mail [email protected]; visit www.pftlegal.com. 

In reviewing rental agreements for self-storage businesses nationwide, one thing I notice is they sometimes fail to include certain policies that are in effect at the facility, such as those regarding tenant payments. If you have rules about when and how you accept cash, checks and credit cards but you don’t clearly state them in your contract, their enforcement could be viewed as discriminatory. It may be unintentional, but that’s how it might appear to customers.

Following are a few examples of self-storage payment policies and how to enforce them without seeming like you’re being prejudicial to tenants.

Check Payments

Your facility may have a policy that once a tenant has bounced a check with your business, you’ll no longer accept this form of payment from that person, either for a set period or forever. Or, perhaps you refuse to accept checks from past-due customers if they’re a certain number of days prior to lien sale. These are policies you’ve probably had and regularly enforced for a long time—hopefully, with consistency for every customer.

However, if you don’t state these rules in your rental agreement, your refusal of a check from a tenant in these cases could be viewed as a discriminatory action. The customer may wonder and, worse, ask a civil- or human-rights commission to look at whether you refused the payment, not because he had insufficient funds or was X days late, but because of his color, race, nationality, religion, etc. It only takes one extra line in a rental agreement to clarify this policy and avoid problems.

Credit Card Payments

Another area that needs to be clearly outlined in your rental agreement is credit card payments. Do you let tenants know in which scenarios you’d refuse to accept a credit card? Many operators will reject this type of payment before a lien sale to avoid a charge dispute after cancelling the auction. Perhaps once a tenant is X days late on the rent, you’ll only take cash or a cashier’s check. These rules need to be in writing, in the rental contract.

I receive at least one message a week from a self-storage tenant who says something like: “I’m a customer at ABC facility. I admit I was behind in my rent. I was ready to pay the day or two before the sale. I logged onto the website and found the manager had blocked me from making payments over the Web.”

These customers go on to say why they think the manager blocked them. They often think it’s a case of discrimination, when that isn’t true. Because of the risk of dispute, many storage operators set their facility-management software to automatically turn off Web payments when a tenant is a certain number of days late.

Again, a one-line statement in the rental agreement reduces the possibility that a tenant can come back and say you had a biased intention by refusing a credit card payment. Your written policy should explain the circumstances under which credit cards aren’t accepted, in person or via technology platforms such as kiosks, websites, call centers and the like.

Payment-Processing Timeline

Finally, you need to consider when your payments are processed. If your policy calls for a unit to be overlocked or the tenant to be denied gate access as soon as the payment is late, you need to consider how quickly the overlock can be removed or access re-established. For example, if the facility is closed on Sunday and a customer makes an online payment that day, when it will it be posted to his account? When will he again have access to the unit? This is especially important during holidays when many operators have limited office hours.

You need to make your timeline clear so a tenant can’t claim he was denied access to his unit even when his account was paid in full. Moreover, you don’t want him to allege the lockout was at all related to discriminatory practices. By adding just a few short sentences to your lease, you can make your policies easily known to customers and avoid potential allegations.

Ward Against Claims

Because the self-storage industry is now clearly on the radar, we’re more vulnerable to claims that were once only the purview of the multi-family asset class. While there isn’t a storage equivalent to the Fair Housing Act, civil- and human-rights commissions have proven their willingness to investigate the practices of facility operators when a customer makes what appears to be a valid claim for discrimination.

If you haven’t taken the appropriate steps to disclose your policies and procedures to tenants within your rental agreement, do so immediately. Be smart and keep your lease up to date. If you have rules in play at your facility, make sure they’re part of the written documentation a tenant receives at move-in. This way there’ll be no miscommunications, misunderstandings or bad feelings that could turn into an expensive legal claim.

This column is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of your own attorney.

Jeffrey Greenberger is a partner in the Cincinnati law firm of Greenberger & Brewer LLP. Licensed to practice in Kentucky and Ohio, he focuses primarily on representing the owners and operators of commercial real estate, including self-storage. His website, selfstoragelegal.com, contains legal opinions and insights as well as an article archive. To reach him, call 513.698.9350; e-mail [email protected]. 

Strategic Storage Trust IV Inc. (SST IV), a public non-traded real estate investment trust sponsored by SmartStop Asset Management LLC, has purchased a self-storage facility in Naples, Fla. Olde Naples Self Storage at 275 Goodlette-Frank Road comprises 77,900 net rentable square feet in about 700 units. It includes climate-controlled, drive-up units, vehicle and wine storage, remote-control gate access and two elevators, according to a press release.

"This facility is strategically located close to the heart of Downtown Naples, adjacent to several newly opened and under-construction condominium projects," said Wayne Johnson, chief investment officer. "We believe this will continue to enhance demand for the facility and generate greater value for our investors. Additionally, the facility has served the Naples community for many years, and we look forward to continuing the high level of service that our tenants have enjoyed."

SST IV has been actively acquiring property this year. Recent deals include a 66,400-square-foot property in North Las Vegas, purchased last month, and a 85,000-square-foot facility in Puyallup, Wash., acquired in May.

Based in Maryland, SST IV owns seven self-storage properties comprising about 481,800 net rentable square feet. It intends to invest in a portfolio of self-storage properties in Canada and the United States.

SmartStop is the asset manager for 118 facilities in Canada and the U.S. Its portfolio comprises approximately 8.7 million rentable square feet.

Source:
PR Newswire, Strategic Storage Trust IV Acquires Approximately 700-Unit Self Storage Facility in Naples, Florida

Update 8/10/18 – Three Upper Darby residents have filed an appeal against the zoning-hearing board for approving the MCBH Drexeline Plaza project on June 28. Donald Fields, Bonnie Hallam and Janice Haman filed the petition on July 27 in common pleas court, arguing the board “abused its discretion and committed errors of law” in making its decision, according to the source.

The citizens took issue primarily at granted variances they believe will have a negative environmental impact on the area, particularly the elimination of stream buffers along Darby Creek and the use of impervious space as dictated by town code, the source reported.

In an opinion report, officials indicated a remedy for storm-water runoff would be provided as part of the project, while improvements along the creek and a reduction of an impervious surface are “dynamically better than the present condition.” Among the conditions required as part of board approval was a provision that MCBH provide underground retention/detention facilities for storm-water management.

Kilkenny Law LLC is representing the citizen group. A hearing hasn’t been scheduled to hear the appeal.

6/5/18 – MCBH Drexeline Plaza LP, an affiliate of commercial real estate investment firm MCB Real Estate LLC, has proposed a mixed-use project including self-storage to revitalize the Drexeline Town Center in the Drexel Hill area of Upper Darby, Pa. The plan includes an 800-unit storage facility in addition to a 142-unit apartment building, a Wawa convenience store, a medical center and underground parking for 190 vehicles. Combining four parcels into one, the project would also involve renovations to Anthony’s Restaurant, PNC Bank and a Shop Rite supermarket, which operate on the 16.5-acre site at 5100 State Road, according to the source.

The application includes 12 variances and one special exception related to apartments, building-height restrictions, the self-storage facility and location of loading docks. The site is zoned for traditional, general-commercial uses. “The trend today is mixed-use,” Dan Shabel, a portfolio manager at MCB, told the zoning board during a recent meeting.

The project would require the demolition of most existing buildings. Shabel indicated the first phase would focus on construction of the apartment building and convenience store, along with renovations to the bank and restaurant. The self-storage facility would be designed to look like an apartment building, the source reported. Construction for the entire project is estimated at up to three years.

Part of the site redesign would improve ingress and egress on the property and allow the developer to add green space, including a meadow between Wawa and Darby Creek. A walking path along the creek is also part of the plan, along with new sidewalks and crosswalks and traffic-signal upgrades. “The entire property will be walkable,” Shabel said.

The project would allow Shop Rite to expand from 50,000 to 75,000 square feet, which is necessary for the market to survive at its present location, owner Patrick Burns told the board. Additions would include a second-floor family restaurant, pharmacy, cooking classes and a nutritionist. “I need to expand or move,” Burns said.

A four-hour meeting about the development attracted several residents, many of whom indicated they would like to see the site redeveloped but were wary of all the variances. “Storage facilities are prohibited in the comprehensive plan,” resident Jennifer Hallam told the board. “It is not evident the neighborhood is in need of self-storage.”

Though the board delayed a decision until June 28, four councilmembers and state representative Jamie Santora publicly expressed their support for the project. “I want to see this site developed,” Santora said during the meeting. “[MCB has] other town centers and are top-notch, and we need this in Upper Darby. We have an opportunity to increase the value of the gateway to Upper Darby. We want the trail to go in the earliest phase possible.”

Town planners estimate the project would create 370 direct and indirect jobs and yield $120 million during construction. The final project would generate an estimated 540 jobs, the source reported.

MCB Real Estate is a privately held, institutionally capitalized, commercial real estate investment firm that acquires, develops, manages and capitalizes assets in the industrial, mixed-use, office and retail sectors. It owns and operates approximately 6 million square feet of commercial property, according to its website.

Sources:
Daily Times, Residents Appeal Drexeline Plaza Zoning Variances
Daily Times, Developers Unveil Plans for Drexeline Town Center
MCB Real Estate, Website

MSSP Spacebox Fort Myers LLC, an affiliate of Spacebox USA, has purchased a vacant warehouse in Fort Myers, Fla., that it plans to convert to self-storage. The company acquired the 10.3-acre site in June for $6.4 million. In addition to converting the building, MSSP Spacebox could erect additional structures on the property, according to the source.

The building at 2670 Colonial Blvd. was constructed in 1974 and comprises 92,164 square feet. FedEx leased the property for a decade before vacating it a year ago. Prior to that, it was leased to Sears, Roebuck & Co.

The deal is considered the largest industrial real estate transaction in Lee County, Fla., this year, the source reported. MSSP Spacebox was represented by Tom Woodyard, principal of Woodyard & Associates LLC. The seller, Monmouth Real Estate Investment Corp., an affiliate of New Jersey-based UMH Properties Inc., was represented by Derek Bornhorst, Bob Johnston and Jerry Messonnier, brokers for Lee & Associates of Naples-Fort Myers.

“To replace the building would have cost every bit of the amount that they paid, and that would be for the building only,” Johnston said. “And the Colonial Boulevard corridor is really growing in terms of residential, so a self-storage project should do well in that location, if that’s the route they take.”

Based in Hattiesburg, Miss., Spacebox USA operates a facility in Auburn, Ala., and one each in Niceville and Tampa, Fla. It also has a project under development in Lake Park, Fla. 

Source:
Business Observer, Spacebox Entity Has Plans for Self-Storage on Colonial Boulevard Property

When an ash tree at a Milt’s Mini Storage in Omaha, Neb., required removal, the owner decided to turn the tall stump into a memorable work of art. The self-storage property at 4550 F St. now features a freshly carved bear and pair of eagles. The artist also carved the facility address into what remains of the tree, which faces F St.

It took artist Jeff Dahr two days to shape and paint the animals, according to the source. He used chainsaws and torches to craft the piece. “Your chainsaw is an extension of your hand,” said Dahr, who’s been designing with wood for 15 years. “If you know what you're carving, then all you do is take the wood away that's no supposed to be there.”

Dahr carves about 100 pieces of art annually across 10 states. Each costs $400 to $2,000, Dahr said.

Founded more than 40 years ago, Milt’s Mini Storage operates six facilities in Omaha and two in Bellevue, Neb. The company is family-owned and -operated.

Source:
WOWT, Local Business Turns Eyesore Into Art

Safeguard Self Storage, which operates 75 facilities throughout the eastern states, has purchased a commercial building in Plainview, N.Y., for $2.8 million that it intends to convert to self-storage. It’ll be the company’s fifth facility on Long Island and its 32nd in the New York metropolitan area, according to a press release.

The property at 1522 Old Country Road contains an existing 18,000-square-foot, single-story structure that’ll be redeveloped into a two-story self-storage building. Once complete, it’ll comprise 60,300 square feet in 757 units and feature computer-controlled gate access, a drive-up loading area and video cameras. Safeguard also plans to relocate its headquarters from Melville, N.Y., to 1,500 square feet of office space on the facility’s second floor. The property is expected to open in the third quarter of 2019.

“The Long Island portion of the New York metro market has become increasingly important for Safeguard, and this purchase will help the company continue to develop and strengthen its name recognition outside the boroughs of New York City,” said Jim Goonan, executive vice president of development.

Safeguard and the seller, A.M. Property Holding Corp., were represented in the transaction by Kelly Koukou, executive managing director for real estate firm Lee & Associates.

Safeguard has five other projects underway in the New York market, two of which are expected to open later this year. It has six other projects in development outside the state, the release stated.

Founded in 1989 and headquartered in Atlanta, Safeguard operates facilities in Florida, Illinois, Louisiana, New Jersey, New York and Pennsylvania. The company is owned and operated by Morgan Stanley’s Prime Property Fund.

Sources:
Long Island Business News, Plainview Building Sells for $2.8M
openPR, Safeguard Self Storage Completes the Purchase of Land for a New Facility at 1522 Old Country Road in Plainview, New York