AFC Realty Capital, which originates and executes real estate transactions on behalf of self-storage owners and developers, formed the AFC Self-Storage Finance Group to serve client demand. Paul Fried, an AFC principal who serves as president of the new group, said the sector is largely ignored by investment banks.
In its first transaction, the group arranged joint-venture equity and debt financing for a $94 million portfolio on behalf of the Veritas Group. The capital was used to purchase a 380,000-square-foot portfolio of newly built, institutional-grade self-storage in the Bronx, Brooklyn and Queens, N.Y. The funds include “take out” financing to acquire some future assets such as Wyckoff Self Storage, a 98,760-square-foot converted warehouse in Queens.
The senior mortgage financing was originated and placed by Fried with an investment bank. The balance of the financing came from an institutional equity partner that had not previously invested in the self-storage sector. “These properties don’t fit the standard profile for capital providers used to self-storage assets in suburban locales,” says Fried. “These are large facilities situated in high-density, urban infill sites. Many capital providers were hesitant.”
For more information, visit www.afcrealtycapital.com.