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.


  • Section-1031 Exchange
    Since the 1920s, savvy taxpayers have been growing their wealth on a tax-deferred basis by using Section 1031 like-kind exchanges. Originally used by cattle farmers to defer payment of capital-gains tax on the exchange of cattle, 1031 is currently used to defer ...More
    February 1, 2005 Thomas E. St. Jean and Nicholas Malagisi Posted in Articles, Finance
  • Overcoming Objections From Small Business
    Selling records storage is easy once you understand the two prime objections you’ll get from customers and how to overcome them. This is an important ingredient in the records storage “lite” model designed for self-storage implementation. My last three columns have focused ...More
    December 1, 2004 Cary F. McGovern Posted in Articles, Finance
  • What's Up With Permanent Financing?
    “Unbelievable” is the only word to describe continued financing opportunities for self-storage and most other commercial-property types. To illustrate, the following chart shows a sample of long- and short-term index rates over the last 10 years. Today’s rates are still ...More
    November 1, 2004 David Smyle Posted in Articles, Finance
  • Cap Rates—A Mystery Unveiled
    If you are buying, selling or refinancing a self-storage property, you can’t have a three-minute conversation without the term “cap rate” coming up. Everyone acts as if they know what this is—a few really do know, many more think they know, and some refuse to admit they ...More
    November 1, 2004 Michael L. McCune Posted in Articles, Finance
  • Capital Types and Trends
    What are two financing facts many storage owners are surprised to learn? One, there are more types of permanent, bridge and construction loans available today than at any time in the history of the industry; and two, lenders are more likely to add “custom” loan terms and ...More
    November 1, 2004 Jim Davies and Eric Snyder Posted in Articles, Finance
  • The Time of the True-Tax Lease
    In today’s self-storage market, with spiking steel prices and an upward trend in interest rates, facility owners need to consider every money-saving technique available. Of course, the best method is the one that does not require you to spend money to save money. Over the ...More
    November 1, 2004 Ronald J. Pope Posted in Articles, Finance
  • Self-Storage Construction Loans
    Many first-time self-storage developers assume a construction loan is similar to permanent financing. But approaching financing from this perspective may create long-term negative consequences. Construction and development financing is radically different from other credit ...More
    November 1, 2004 RK Kliebenstein Posted in Articles, Finance
  • Employee Credit-Card Fraud
    Incidents of credit-card fraud and identity theft have risen dramatically in recent years. With increased use of e-commerce and technology in business, it has become easy for thieves to steal and misuse credit-card numbers. The dangers do not always come from outside a ...More
    November 1, 2004 Amy Brown Posted in Articles, Finance
  • Financing Your Car Wash
    Before investing in a car wash, potential investors and operators ask these basic questions: How much does it cost? How do I finance it? What options are available? How do I put this whole project together? What kind of return can I expect? These are the fundamental ...More
    November 1, 2004 Fred Grauer Posted in Articles, Finance
  • The Conduit-Financing Pool
    Regardless of the weather, the pool is open—the conduit-financing pool, that is. More commercial real estate borrowers are diving into the opportunities offered by conduit financing. With its proven structures and acceptance by the investment community, conduit financing ...More
    November 1, 2004 Neal Gussis and Shawn Hill Posted in Articles, Finance