Finance

With changes in the general economy have come changes in the self-storage finance world. Self-storage lenders, like those for all commercial real estate, apply more stringent underwriting standards when evaluating the potential of a construction, permanent or other self-storage loans. Even the refinancing process has become more challenging for self-storage owners, who must weigh their options and exit strategies. Some negotiate with lenders in an attempt to salvage underperforming self-storage properties. Tax issues are also a significant concern for self-storage owners. Cost segregation and 1031 exchange are possibilities to be explored. Financial and operating performance is reported quarterly by the self-storage real estate investment trusts (REITs): Public Storage Inc., U-Store-It Trust, Sovran Self Storage and Extra Space Storage.


  • Over the River and Through the Woods
    During the old days, self-storage was little more than a ramshackle shed with a nice elderly person holding the keys ... but, this isn’t your grandma’s business anymore! Unless you’ve been living in one for decades, you know facilities emerging in the marketplace today are ...More
    November 7, 2006 Drew G. Whitney Posted in Articles, Finance
  • Creative Debt Structures
    It’s still a borrower’s market. The best news is self-storage commercial mortgage backed securities (CMBS) hold one of the lowest default rates of all real estate asset classes including office, industrial, retail and multi-family. Lenders once considered self-storage ...More
    November 7, 2006 Joe Maehler and Scott Sweeney Posted in Articles, Finance
  • Talking in Code
    Internal Revenue Code Section 1031 contains a mere 1,421 words, yet its significance can’t be overemphasized. Investors have enjoyed the advantages since 1921. The overriding principle—continuity of investment—is pretty simple. Boiled down, it means you should be able to ...More
    November 7, 2006 Mary Cunningham Posted in Articles, Finance
  • Properly Structured Construction Financing
    While most commercial real estate lenders understand retail, office, multifamily and industrial property types, fewer comprehend the nuances of self-storage construction financing. All too often, lenders apply financing parameters from other property types to self-storage ...More
    November 7, 2006 Richard M. Kerwin and Devin S. Huber Posted in Articles, Finance
  • The Cup Runneth Over
    Real estate operators have an unparalleled chance to solidify equity capital for the next three to five years, thanks to the strength of the self-storage industry and availability of institutional capital. Establishing a joint venture with an institutional partner positions ...More
    November 7, 2006 John R. Nikolich Posted in Articles, Finance
  • Do Your Homework!
    I recently spoke with someone new to the industry who was certain he owned the best development site on the planet. When I asked about his feasibility study, he sternly told me his county was the “fastest growing in America,” all local competitors were completely full, and ...More
    November 7, 2006 Benjamin Burkhart Posted in Articles, Development, Finance
  • Navigating the Mortgage Maze
    A major factor in the profitability and success of a self-storage facility is mortgage financing. Balancing your long and short-term goals can be tricky—but necessary. Here are some common questions and answers to guide you through the maze. What is the best type of ...More
    November 7, 2006 Anthony DiMarco and Gerard D. DiMarco Jr. Posted in Articles, Finance
  • Conduit Lending
    For self-storage, most of the long-term, fixed-rate financing (10 years or longer) is provided by the Wall Street “conduit” market also known as “securitized” lending. These loans are originated around the country collateralized by various property types, pooled together in ...More
    November 7, 2006 David Smyle Posted in Articles, Finance
  • Slice Your Federal Income Taxes
    Real estate investors could be saving $50,000 to $1 million on federal income taxes this year, but most won’t because they and their accountants overlook a relatively new issue called cost segregation or “accelerated cost recovery.” Opportunities for cost segregation grew ...More
    November 7, 2006 Patrick O’Connor Posted in Articles, Finance
  • A Rising Star
    Just as down-on-his-luck Vince Papale makes pro in the movie Invincible, self-storage has made “pro” in the financial world. From Main Street to Wall Street, lenders are storing capital in the self-storage asset class. In public and private markets, lenders are finding ...More
    November 6, 2006 Christian Sonne Posted in Articles, Finance