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.


  • 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
  • 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
  • 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
  • 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
  • Protecting Payments
    The key to sustaining a healthy relationship with employees who handle facility revenue is a clear set of operating rules, segregation of duties, and a checks-and-balances atmosphere. Many operators ask, “What if my operation is too small to accomplish separation of duties? ...More
    October 19, 2006 Ross Federgreen Posted in Articles, Finance
  • Self-Storage Tax Advantages
    If it were possible to expense the entire construction cost of a new facility the year it’s incurred instead of capitalizing it, most self-storage owners would do so in a heartbeat. Although that’s not feasible, cost-segregation studies provide a good—and absolutely ...More
    September 21, 2006 Jerome Kootman Posted in Articles, Finance
  • SIA Offers Free Self-Storage Property Valuations
    Storage Investment Advisors LLP (SIA), a Houston-based investment real estate services firm, now offers no-cost property valuations to self-storage facility owners. ...More
    August 28, 2006 Posted in News, Finance