Wells Fargo Financial Leasing Inc.
|Copyright 2014 by Virgo Publishing.|
|By: Elaine Foxwell|
|Posted on: 11/01/2005|
With interest rates still low and property values climbing toward the sky, industry experts agree self-storage is an excellent investment. When people want to enter the business or existing owners wish to expand, one of their first concerns is where to find the money.
Established in 1977, Wells Fargo Financial Leasing Inc. specializes in competitive financing programs. Having entered the self-storage arena in 1990, the company offers a variety of products to meet owner and investor needs, including real estate loans, notes, and tax-oriented leases for new site construction plus land and equipment. Financing is also available for existing facilities, sale-leasebacks and remodels.
Wells Fargo employs a national sales force and tenured management team. Its self-storage specialists are ready to use their industry expertise to help grow storage businesses. “One of the reasons we formed the self-storage group was to leverage our experience to the next level from an industry-wide perspective,” says Ronald Pope, regional sales manager for the self-storage division. “Our group has the industry connections and expertise to bring a lot of value to the first-time developer or seasoned self-storage owner.”
Fulfilling a Market Niche
Over the years, Wells Fargo has seen many owners work with one lender on construction financing, another to get them through to stabilization, and yet another to provide permanent financing, Pope says. With two or three different loans, closing costs really add up.
In an effort to be unique in the marketplace and provide distinct value for developers, Wells Fargo provides for the short- and long-term needs of a new project—with only one set of closing costs. Loans can be made for land acquisition, construction, and the purchase of existing facilities and commercial property. “On a national scale, it’s unusual for an institute to offer a financing package that takes an owner from acquisition to permanent financing with only one set of closing costs,” says Pope. “That is our market niche, and it fits into our strategy of being a full-resource lender.”
Wells Fargo’s real estate mortgage and commercial loan rates are fixed up to 15 years, with the potential for a 25-year amortization. Loans often have no prepayment penalty after the third year.Preparation is Key
Initially, a self-storage specialist talks with the client to understand his long-range goals. Then Wells Fargo tailors a finance package to complement the borrower’s objectives. “We are a relationship-style lender, so we want to know our customer and not just see numbers,” Pope says.
Once a customer decides to finance with Wells Fargo, he is given a detailed outline of what the company would like to see for financials, feasibility studies, appraisals, etc. Then a credit analyst and field specialist works with the client toward a timely turnaround. The loan closes when it’s approved. If construction is involved, Wells Fargo will set up an interest-only construction loan, which is converted to permanent financing once building is complete. Usually, the permanent loan is interest-only for a specified period. All leases and loans are internally funded and administered.
What’s the key to successfully securing a loan? Careful and knowledgeable document preparation. “The key is the completeness of the information we ask for and timeliness in receiving it,” says Pope.
Financing the Future
With the thriving self-storage industry, finance options, too, have grown. “I see more lenders becoming comfortable with financing self-storage,” Pope says. “As interest rates go up, and if the stock market performs better, we will see less private money.”
However, financiers have become increasingly savvy about self-storage build-out. Good sites that make economic sense are tougher to find and lenders, in turn, require more due diligence to prove a project’s viability. “The key is to find a lender that understands the industry so the borrower does not have to educate him,” says Pope.
For more information, call 800.451.3322; visit www.wffleasing.com .