GYS Development LLC, a construction and development firm, has purchased 2.5 acres in Fulshear, Texas, on which it plans to build a three-story Fulshear Bend Self Storage facility. The property is near Cinco Ranch Boulevard and Farm-to-Market 1463 in the Cross Creek Ranch master-planned community. Once complete, it’ll comprise 105,000 square feet of storage space, according to the source.

The self-storage project is the eighth developed by GYS. The company also has several developments underway in Arizona, Colorado, Texas and Wyoming.

“Our units offer state-of-the-art features that are appealing to tenants, including security, climate control, drive-up units, onsite management and online renting capabilities,” said co-owner Brandon Grebe. “You will continue to see new storage facilities launching in the Houston area with GYS Development leading the way.”

GYS was represented in the land purchase by Bill Brownfield, principal of Brownfield & Associates LLC, and Tommy LeBlanc, a senior associate with Avison Young.

GYS is a real estate development company focused on the self-storage asset class. Its services include site review and evaluation, entitlements and approvals, building layout and design, and construction management. It’s a division of Grow Your Storage LLC, a Texas-based property-management company.

 

Public Storage Inc., a self-storage real estate investment trust, has acquired Summerville Self Storage in Summerville, S.C. The property at 11055 Dorchester Road is 23 miles northwest of Charleston, S.C. Built in 2007 and expanded last year, it comprises 53,859 net rentable square feet of storage space in 405 units.

The seller was a partnership between an Austin, Texas-based private company and Absolute Storage Management (ASM), which owns and operates 105 self-storage facilities in 15 states. The buyer and the seller were represented in the transaction by Bill Bellomy and Michael Johnson, brokers with Bellomy & Co., a commercial real estate firm with offices in Austin and Houston.

Last month, Public Storage purchased six Central Self Storage properties in the Minneapolis market. The locations total more than 360,000 square feet of storage space in 3,243 units.

Founded in 2002 and headquartered in Memphis, Tenn., ASM has regional offices in Atlanta; Charlotte, N.C.; Jackson, Miss.; and Nashville, Tenn.

Based in Glendale, Calif., Public Storage has interests in 2,615 self-storage facilities in 39 states, with approximately 171 million net rentable square feet. Operating under the Shurgard brand name, the company also has 223 facilities in seven European countries, with approximately 12 million net rentable square feet.

Cost segregation is the process of identifying personal vs. real property along with individual building components for tax purposes, rather than treating a building as one large asset. This determination allows the owner to depreciate his assets over their useful life.

To see how cost segregation applies to self-storage, let’s answer 10 frequently asked questions regarding this depreciation strategy.

1. Does my property qualify?

All investment properties, including self-storage, qualify for cost segregation. When a cost-segregation study is applied, you’re simply telling the IRS that you’re choosing one approved depreciation method (modified accelerated class recovery system, or MACRS) vs. another (straight line). Both are acceptable, however, MACRS requires an analysis to identify the value of each individual asset you own, rather than looking at your property as one large asset.

2. When does it makes sense to do a cost-segregation study?

Cost segregation can be applied to a newly purchased building, new construction or a building you’ve owned for around 15 years or less. If the property isn’t fully depreciated (39 years is the length of normal depreciation), then there’s an opportunity to change the method with cost segregation. Although any property can be depreciated under MACRS, the cost of performing a cost-segregation study may outweigh the benefits if the property was acquired for less than approximately $300,000.

3. What items are reclassified via cost segregation?

Under straight-line depreciation, a property’s total cost (less an allocation for land) is depreciated evenly over 39 years. Under MACRS, the assets are identified and reclassified in five-, 15- and 39-year class lives, depending on the IRS determination of its actual useful life, along with considerations to whether the assets are used for business or the basic function of the building’s use as a structure.

For example, a 39-year property includes windows, walls, doors, roof, HVAC systems, plumbing and electrical. A 15-year property includes exterior improvements, such as fencing, exterior signage, asphalt, curbs, landscaping and exterior lighting. Five-year properties include carpet, appliances, specialty lighting, woodwork, unit partitions, individual unit locks and security, as well as business-specific heating and ventilation systems.

4. Does the type of property affect the tax savings?

Some property types will have a higher reallocation percentage than others. Interior, climate-controlled self-storage properties will see a higher amount than a shed-row or boat/RV-storage asset. The allocations are based on actual assets and values, or each of the components within the property.

5. What information is required to do a cost-segregation study?

Surprisingly, the information required to perform the study is limited. For a recent purchase, the closing or HUD statement is the only requirement. Blueprints are helpful but not necessary. New construction projects require cost breakdowns, including total costs for construction and development, but individual invoices aren’t required.

6. Will I get audited if I do a cost-segregation study?

Cost segregation isn’t a “trigger” for an audit. The IRS issues automatic consent for deprecation whether applying a change from straight-line or MACRS at the time of purchase or retroactive to a property you bought 10 years ago. This means taxpayers are allowed to make this change with the approved forms offered by reputable cost-segregation firms. However, in the rare case of an IRS review, rest assured that a detailed report with the proper IRS-approved methods and audit support will effectively defend your tax-filing position.

7. How much does a cost-segregation study cost?

The cost is usually based on the type and use of the building, its size, and the location of the property. Beware of cost-segregation providers who charge a percentage of the tax savings. The savings is relative to the entity type, number of owners, the year of acquisition and other factors, so the actual cash benefit can vary. Most providers will offer a quote along with projected tax savings, so you and your accountant have the information necessary to make an educated decision.

8. How much will a cost-segregation study save me?

The tax savings can vary depending on the type of building, your total acquisition cost and length of ownership. Self-storage properties vary in type and size and may see reclassification percentages from 15 percent to as high as 40 percent. Request a detailed benefit analysis from a qualified and experienced firm that has a history with self-storage.

9. What does the Tax Cuts and Jobs Act (TCJA) mean for my tax return?

Passed in December 2017 by the Trump Administration, the TCJA is the largest tax-reform bill enacted in more than 30 years. There are significant changes that offer tax cuts for real estate investors. The largest is the adoption of 100 percent bonus depreciation for tangible personal property acquired after Sept. 27, 2017.

Tangible personal property is defined as assets with a useful life of five, seven or 15 years. When cost segregation is performed to identify the personal property apart from real property (39-year assets), it allows the owner to capture bonus depreciation on the reclassified property and immediately expense the entire value in the year purchased.

10. How do I choose a cost-segregation provider?

Choosing a reputable firm is vital to ensure every aspect of the IRS requirements are met, and in the case of an audit, the report is upheld without disallowances or associated interest and penalties. The IRS Audit Technique Guidelines dictate that a physical site visit is performed, with the analysis provided by a professional who has cost-accounting or engineering expertise. The method of determining asset value must also be an approved methodology.

Make sure audit defense is included in your study and the final report offers complete detail on every aspect of your property. Choosing a low-cost provider may be tempting, but the ultimate savings, detail and support of a reputable provider will far outweigh any additional costs. Also, ask for and check references.

As you can see, cost segregation can be well worth the effort, but make sure you work with a reputable provider who can ensure your tax filings meet all IRS requirements.

Heidi Henderson is executive vice president of Engineered Tax Services, a licensed engineering firm focused on specialty tax services relating to federal tax incentives and strategies for real estate owners. She has more than 20 years of tax and accounting experience in the real estate finance, development, construction and commercial property sectors. To reach her, call 801.689.0325; e-mail [email protected]; visit www.engineeredtaxservices.com. 

When pursuing a self-storage investment, having financial backing and support from private investors can provide flexibility and longevity in exploring deals and building a winning portfolio. Thankfully, there are billions of dollars in private capital looking to find its way into this asset class.

In this video filmed at the 2018 Inside Self-Storage (ISS) World Expo, Scott Meyers of Self Storage Profits Inc. teaches “How to Attract Private-Equity Partners to Grow Your Self-Storage Portfolio.” He discusses assembling a group of private money investors and the proper way to create and present an attractive investment offering to this community. Learn how to “10-X” your acquisition and development projects!

This highly informative video is available at the ISS Store in DVD and on-demand formats.

SnapNsure Insurance Services LLC has partnered with technology companies GAPro System Inc. and Mercato Solutions Ltd. to develop a “next-generation” insurance platform through which self-storage tenants can buy coverage for their stored belongings. The collaboration is intended to improve the customer experience by adding speed, options and functionality to SnapNsure’s platform and enable the company to offer additional lines of coverage, according to a press release.

SnapNsure launched its independent storage-contents insurance program last year. Renters can purchase a policy directly through the company website for any facility in their area. Its program is underwritten by The Hanover Insurance Group Inc., a holding company for several property and casualty insurance companies.

“Once we proved our business model, we needed a state-of-the art technology platform to handle the increased volume and customer base [as well as] give us the ability to easily add additional products,” said Matthew Thornton, president and CEO of SnapNsure. “The insurance focus and top-notch technology of GAPro and Mercato have enabled us to do this. They worked with us to design the functionality and optionality we need and are helping to give us a significant time-to-market advantage. We have several new products in the pipeline that the platform will easily accommodate. We look forward to a long-term relationship with them.”

GAPro bills itself as an “insurtech” startup that delivers data-driven verification-as-a-service (VaaS) to “reduce costs and errors associated with legacy certificate form-based approaches,” the release stated. It provides insurance carriers, agent/brokers, the insured and third parties with “secure self-service access to their insurance information, providing real-time and continuing insurance confirmation and compliance verification globally.”

“Customers should be able to easily research, quote, pay and issue coverage for their belongings,” said Herb Gibson, president and CEO of GAPro. “GAPro is honored to be empowering SnapNsure as part of the continuing insurtech revolution.”

Mercato specializes in platform development. Its services include enterprise app development, online marketplaces, pre-sales advisement and price quoting, and information-technology price benchmarking, according to its website.

Based in Wilmington, Del., SnapNsure offers coverages nationwide. Covered causes of loss include fire or lightning, vandalism, burglary, water damage and more. Specialized coverage can be purchased for rodents, flood, earthquake and named storms. Items excluded from coverage include any kind of money or securities, wildlife, firearms, fur garments, jewelry, contraband, valuable documents and records, and others.

Source:
PRWeb, SnapNsure Insurance Services and GAPro System Partner to Develop Next Generation Insurance Platform

Iron Guard Storage, which operates 20 self-storage facilities in nine states, has acquired Washington Avenue Mini-Storage in Evansville, Ind., its first in the state. The property at 4619 Washington Ave. is near the intersection with Green River Road, across from Washington Square Mall shopping center. It comprises 80,875 square feet of storage space in 680 climate-controlled and drive-up units.

“We are very excited to have acquired one of the finest self-storage facilities in the region and to begin operations in Indiana,” said Iron Guard CEO David Ross.

The buyer and the seller, a limited liability company, were represented in the transaction by Sean M. Delaney, Jeffrey L. Herrmann and Michael A. Mele, investment specialists for Marcus & Millichap (M&M). They were assisted by fellow broker Josh Caruana.

Iron Guard operates facilities in Alabama, Arkansas, Georgia, Indiana, Nevada, North Carolina, Texas, Virginia and Washington. In addition to traditional storage, it offers vehicle storage.

Founded in 1971, M&M is a commercial-property investment firm with more than 1,500 investment professionals in offices throughout Canada and the United States.

Source:
Iron Guard Storage, Website

View Pointe Self Storage has opened in Edgewood, a suburb of Tacoma, Wash. Owned by View Pointe LLC, the property at 10315 12th St. Ct. E. is just east of Meridian Ave. E. and across from Les Schwab Tire Centers.

Designed by Stephen Bourne, an architect with Site + Plan + Mix LLC, the facility contains 680 climate-controlled and drive-up units. Additional features included a covered loading bay, access control and video cameras, and a retail center that sells moving and packing supplies.

The facility was built by JPR Construction of North Bend, Wash. It’ll be managed by West Coast Self-Storage Group (WCSSG), an acquisition, development and property-management company headquartered in Everett, Wash. Its portfolio of managed and owned properties includes 39 sites in Washington, nine in Oregon and seven in California.

“View Pointe Self Storage was built with today’s storage customer in mind,” said Tom Davies, WCSSG District Manager for South Puget Sound. “The facility has top-notch amenities, great security, and a knowledgeable staff that centers their attention on customers’ needs. We’re striving to be the best storage option for folks in the Edgewood, Wash., area.”

Source:
Bonnie Lake Patch, New Storage Facility Opens in Edgewood

Fort Knox Self Storage of Melbourne, Australia, intends to build a $12 million mixed-use development that will include a three-story storage facility and an Aldi supermarket on adjacent lots in Coburg North, a suburb of Melbourne. The 13,420-square-meter storage facility and 1,734-square-meter grocery store will be on Sydney Road. Aldi will lease the store from Fort Knox, according to the source.

“Self-storage has really come into its own, especially over the last decade with the increase in higher density living, renting as opposed to owning, and generational lifestyle changes, among the key drivers. This new facility is about responding to rapidly increasing demand and the very positive feedback we have had from our client base,” Fort Knox Director Guy Wilson told the source.

The supermarket will include two sublet tenancies once the store is built. Its portion of the project includes 123 parking spaces.

Family-owned Fort Knox opened its first self-storage facility in 1996. This latest project will be its 10th location in the Melbourne market.

Source:
Food & Beverage, Vaughan Constructions Delivers More Than $12million in Facilities for Fort Knox and Aldi

Update 9/10/18 – Go Store It has acquired an A+ Storage facility in Mt. Juliet, Tenn., the company’s third Nashville-area self-storage purchase this summer. The property at 166 Belinda Parkway comprises more than 90,000 square feet in 685 units., according to the source.

A+ Storage is the operating brand of A+ Storage of Tennessee LLC. The company still operates five self-storage locations in the state, according to its website.

---

6/13/18 – Go Store It, which operates 20 self-storage facilities in six states, has acquired Avondale Self Storage and Storage Port in Hendersonville, Tenn., and will rebrand them under its name. Combined, they contain more than 60,000 square feet of storage space. The company plans to expand each location by another 50,000 square feet, according to a press release.

“This acquisition presents a unique opportunity for Go Store It and allows us to enter a new market in the Nashville [Metropolitan Statistical Area],” said Neil Dyer, director of acquisitions. “There is a big demand for quality storage and the market has high barriers to entry. We look forward to upgrading the facilities, and we are looking to acquire additional assets in the Nashville area.”

Go Store It is seeking expansion opportunities throughout the country, searching for value-add opportunities as well as new facilities that may not yet be stabilized, the release stated.

Based in Charlotte, N.C., Go Store It specializes in the acquisition, development and management of self-storage assets throughout the county. It currently has more 2 million square feet of storage space under management and construction. It’s an affiliate of Madison Capital Group LLC, which has offices in Charleston, S.C., Charlotte, N.C., and Nashville, Tenn.         

Sources:
REBusiness Online, Go Store It Acquires 685-Unit Self-Storage Facility Near Nashville
PR Newswire, Go Store It Closes on 7th Self Storage Acquisition of 2018