From the Editor

If you tap into news sources regarding real estate and financing, it isnt exactly pretty right now. According to, many Americans are falling behind mortgage payments while stagnant home prices and rising interest rates slam housing affordability. The New York Times tells us that after seven straight years of mega gains, real estate investment trusts are taking a dive. OK, thats the bad news.

The good news, maybe, is that some analysts think the decline has been too drastic and that many property-group REITS will bounce back, including industrial, office, retail and those specializing in lodging, timber and, listen up, self-storage.

What does this mean for you? How do you decipher whats really going on in this whirlwind of speculation? Heres more good news: This issue of Inside Self-Storage will help you decode the headlines and try to set you straight with whats happening in the financial realm. How can you brace yourself for a potentially rough ride? Do you even need to worry? Read on and you may just find answers to your finance questions.

For example, if youre in the loan-application process and need suggestions for gaining lender attention and best placement for debt or equity, turn to Richard Hill Adams article, How to Package Your Loan Request, page 60.

Want some hints about commercial mortgage backed securities? Financial experts Joseph Maehler and Todd Rhodes explain, To restore some order to the market, investors should focus on the fact that CMBS loans are still performing well and return to buying bonds. This would bring liquidity back to the market, and the demand for CMBS bonds would match supply. The increase in liquidity would reduce spreads and ease lender exposure. Turn to page 92 for more details in their article An Adjustment to the Debt Markets.

When it comes to the commercial real estate financing market, 2007 has not been a year for the faint of heart, nor for those uncomfortable with change. Indeed, this year has provided us with some rather dramatic developments related to self-storage interest-rate spreads and loan-program terms, submits Shawn Hill, financial expert and ISS contributor. But, he continues, owners and investors should not despair. Why? Youll find his reasoning in Financing Strategies in a Volatile Market, which begins on page 42.

When times get tough, the tough get smart. If youre not sure what your smartest moves might be financially, turn to the experts. Youll find them here, in our special ISS finance issue.

Good luck and good fortune, 

Drew G. Whitney 
[email protected]

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