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.
Cutting-Edge Finance Trends
No matter your vantage point, it’s easy to see that self-storage has become a respected real estate product. According to the Self Storage Association, the industry is a $15 billion business, with more than 38,000 facilities nationwide; and these numbers are likely to ...More
Startup Essentials: Financing
Do you really need a bank to start a business? What role does a bank or other financial institution play in your ongoing success? How do you build a solid business and be in position to expand or exit at will—profitably?In this column, I’ll explore these questions and ...More
As Good as Gold
Most of you are familiar with Aesop’s fable about “The Goose With the Golden Eggs.” Those of you who are not, consider this your lucky day. You’re about to be transported back in time to when moral values were taught using delightful little tales of human foolishness and ...More
Wells Fargo Financial Leasing Inc.
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. ...More
While the Window Is Open
From a self-storage owner’s perspective, the legacy of Federal Reserve Chairman Allen Greenspan may well be the window of opportunity he has created for those who can put fixed-rate, permanent financing in place during this period of historically low interest rates. This ...More
It’s nearly the end of 2005, and who would have thought we would continue to see such a low interest-rate environment? The opportunity to refinance and get out of a rising adjustable rate, pull out cash or lower your monthly payment is still available. In this article, I’ll ...More
What Makes a Good Deal?
In any business transaction, investors look for the right mix of critical elements. In self-storage, that mix includes an experienced management team, a good marketing plan, strong cash flow and an ability to adapt in a changing marketplace. At the heart of every deal is a ...More
Electronic Revenue Options
The traditional payment methods accepted by self-storage businesses—cash, check and credit card—are now available in the form of electronic funds transfer. Electronic banking provides merchants with ever-increasing opportunities to streamline payment processing while ...More
Making the Most of Tax Benefits
Following 9/11, significant but temporary tax changes were enacted to entice real estate owners to invest in their properties. These benefits are running out at the end of the year, so self-storage owners would do well to cash in while they can. For starters, 2005 is the ...More
Buchanan Storage Capital
Today’s self-storage environment is a lot like chess. Owners and investors move along a constantly changing battlefield checkered with opportunity and potential danger. They have to be nimble and patient in their movements, balancing agility with long-term strategy. ...More