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Former N.C. Dairy Plant Converted Into Self-Storage Facility

A former dairy plant has been converted into a 100,000-square-foot self-storage facility in Greensboro, N.C.

The facility, Gateway Storage Solutions, is owned by Market Street Storage LLC, a new venture between Gateway Holdings LLC and Return Holdings. The facility offers drive-up, climate-control units, boat/RV storage, and other amenities.

Gateway is on an 8.3 acre site originally developed in 1948 by Guilford Dairy and operated through 2001 by Flav-O-Rich Dairy. Only two of the three buildings were able to be converted into self-storage. However, more than 85 percent of the demolished building was recycled on site and in other area commercial projects, says Frank Hinman, President and CEO of Gateway Holdings. “Our goal was to rebuild in an environmentally friendly manner while providing the neighborhood and city with an aesthetically pleasing project.”

The two-story glass storefront faces West Market Street and includes landscaping to mimic an upscale office park. Landmark Builders of the Triad was the general contractor, with financing provided by High Point Bank. Four acres of the project were saved for future development.

Source:  SYS-Con Media,  Gateway Storage Solutions Opens Its 1st Self Storage Facility in Greensboro 

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STORE Self Storage (Fla.) Hosts Sale to Benefit Red Cross

STORE Self Storage in Palm Beach Gardens, Fla., will host an inside yard sale Nov. 21 from 8 a.m. to 2 p.m. to benefit the American Red Cross. The items will be provided by private residents and will include jewelry, purses and more. Admission is $2. 

Palm Beach Gardens Medical Center will provide free health checks, flu shots for $24.99, and a blood mobile for donors. Entertainment will also be provided. Goodwill will accept any unsold items following the sale.
Source:  TCPalm,  STORE Self Storage Inside Yard Sale To Benefit the Red Cross 

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Illinois Self Storage Association Fights Tax, Contracts Lobby Firm

Today the Illinois Self Storage Association sent a formal letter to facility operators in the state, asking their assistance in the battle against a proposed service tax for self-storage. The letter explains that while action on HB174―a bill that would institute a 6 percent sales tax on self-storage―will likely be delayed until the February primary, the association and local self-storage operators must work to progress their cause now.
For help with its legislative effort, ISSA has contracted with lobby firm Cook-Witter, a government-advocacy service provider. To help pay for the firm’s services, the ISSA Board of Directors is encouraging association members to pledge a voluntary assessment of $100. Payment can be made in installments and can be paid by credit card. The donation is strictly designated for government advocacy and will not be used for political contributions or general operational expenses.
ISSA is requesting a response in writing to the call for donations by Nov. 18. A copy of the response form can be found at

To view a copy of the letter sent by ISSA President Michael Metzger and Executive Director Mike Lane, visit

For more information, e-mail [email protected]; visit

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Spring Mill Self Storage Hosts Grand Opening With Benefits

On Nov. 14, Spring Mill Self Storage of Westfield, Ind., will celebrate its grand opening with a ribbon-cutting presided over by Westfield Mayor Andy Cook. The facility will also be giving away prizes, making donations to local organizations that feed the hungry, and providing free document shredding. The event will take place from 9 a.m. to 1 p.m.
During the event, visitors can enter prize drawings for $100 Kroger gift cards and free holiday self-storage rentals. The facility will give away three-month rentals on two “Santa’s Closets,” 5-by-5-foot units that are perfect for hiding presents, and one “Santa’s Workshop,” a 10-by-10-foot unit. (Some restrictions apply.)
For every new lease signed between the grand opening and Dec. 1, Spring Mill Self Storage will make a cash donation equal to one-month’s rent to either Meals on Wheels of Hamilton County Inc. or the food pantry at Our Lady of Mt. Carmel Catholic Church. Tenants can designate which group receives the funds.
Spring Mill will also offer free shredding of unneeded documents during the grand opening. Visitors can drop off up to one banker's box full of papers, binders and CDs to be destroyed by IndyShred (locked bins will be provided). In addition, NetLiteracy will be on site to collect used but functional computers and monitors for use in schools.

Spring Mill Self Storage is owned and managed by the Gene B. Glick Co. Inc. Founded in Indianapolis in 1947, the company is a property-management and development firm with more than 18,000 apartment units in 10 states.

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Westy Self Storage of Stamford Participates in Operation Santa

On Nov. 23, Westy Self Storage of Stamford, Conn., will distribute children’s wish lists as part of Operation Santa, an annual drive that collects and distributes winter coats and toys to underprivileged children at Benjamin Franklin School/P.S. 55 in the Bronx, N.Y. The self-storage facility is designated as the drop-off location for the donated goods from Nov. 23 through Dec. 15. It will also store the goods and provide the final delivery to the school via one of its moving trucks.
To kick off the event, Westy will host a reception in its grand lobby at 80 Brownhouse Road on Nov. 23 at 7 p.m. ‘Dear Santa’ letters written by the children will be distributed; guests can take as many letters to fulfill as they wish. Letters can also be obtained by visiting
Westy is open for donation drop-offs seven days a week. Hours are 8 a.m. to 6 p.m. on weekdays, 9 a.m. to 6 p.m. on Saturday, and 11 a.m. to 4 p.m. on Sunday.
Operation Santa was founded by Kaisa Newhams.

With corporate headquarters in Stamford, Conn., Westy has seven self-storage facilities centers in New York, six in Connecticut and three in New Jersey.
Source: Connecticut Plus, Westy Self Storage supports Operation Santa Donation Drive

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20 Units Compromised at Budget Self Storage in Manatee, FL

On Tuesday, locks were cut off of approximately 20 units at Budget Self Storage in Manatee, Fla. According to the sheriff’s office, all property owners have been contacted, but it is not yet clear how much was stolen. Authorities believe three people were involved in the burglary. Anyone with information should call Crimestoppers at 866.634.TIPS.
Source: Bradenton Herald, Self-storage units burglarized on Manatee Avenue

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Lackland Self Storage Works With Radio Station to Help Needy Families

For the second year in a row, Lackland Self Storage of New Jersey has partnered with local 101.5 FM radio in assisting needy families throughout the state. From Nov. 5 through Nov. 16, the station’s on-air personalities are asking their audience to donate items for families in domestic-abuse shelters and transitional housing facilities. The families will be anonymous to protect their privacy, but the on-air talent will share information such as clothing sizes, ages, toy suggestions, etc. Listeners can drop off their donated items to any of Lackland’s 25 locations.
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Self-Storage Financing: Facing the Break Point and Predictions for 2010

Much has changed in our economy and financial market in the past year. While there were some positive developments over the past 12 months, bad news still lingers on many fronts. The “other shoe” is now dropping: commercial real estate. Declining property values, coupled with limited access and viability of debt, are contributing to the nation’s new financial break point. 

In tennis, a break point occurs when you’re one point away from losing the game, even though you’re serving the ball. Outside the court, a break point can refer to how individuals handle a situation at a critical point.

These days, self-storage owners and investors try to maintain their “serve” by closely managing their businesses to minimize decreases in occupancy that, in many cases, is coupled with lower rental rates. Few property owners are immune to the drastic changes in commercial real estate value and available leverage experienced in the past year. Consider:

  • Relatively few storage sales transpired in 2009, and construction starts are now at a 10-year low.
  • Financial markets came close to a grinding halt, perhaps more aptly termed a “rolling stop.” Only what lenders deemed to be the best deals seemed to cross the finish line.
  • Most of us saw the largest property-value decreases in the shortest time period in our lifetimes. 
  • Across all property types, cap rates increased approximately 200 basis points. 
  • There are no signs of any positive value adjustments in sight. 

Welcome to a New Year

Self-storage owners should now strategize their equity positions to best maximize their return on investment. In many cases, this is far from a clear-cut analysis. Begin by realistically examining the property’s current value. While you may be shocked by its lower-than-expected valuation, this is your starting point.

Next, if you determine a need to finance in the next 24 months, consider whether you have enough equity to obtain financing without putting up additional proceeds. If you’re facing a potential sale, a current valuation helps you address various “what if” scenarios.

When examining these situations, analyze future risks vs. rewards. You might be well-positioned to ride out this economic cycle for several years. On the other hand, the only practical solution may be to sell the property or even return it to the bank.

The need to leverage or finance in the 2010 to 2011 time period will be critical in determining your path to protect your storage investment. This analysis will help you in choosing the best route.
Following are my predictions for the new year:

Relative strength of self-storage. It’s important to keep everything in perspective. In most cases, even with a decline in bottom-line income, the self-storage asset class is still covering debt and performing at profitable levels. 

Compared to the retail, hotel, office and multi-family real estate sectors, with their higher exposures to vacancy and rental pressure, storage is strong. Self-storage will also be on the leading edge of an economic recovery, as our industry’s month-to-month rental format will allow upward rental adjustments in a timelier manner.

As a property type, storage also tends to be on the smaller scale of commercial real estate deals. That’s a benefit in a tight market since lenders are more likely to make credit decisions on smaller transactions. Smaller deals also tend to be less complex.

Conservative money/changing risk tolerance. While liquidity will lead the banking sector’s recovery, it alone will not initially solve the leverage issues facing many owners. With some exceptions, expect loan-to-value ratios to remain at 50 percent to 65 percent. This low leverage, combined with lower property valuations, will crimp your ability to repay existing debt unless you currently have very low leverage.

Property performance and its ability to cover current and future debt will always be a big part of any banker’s decision process.  In 2009, many lenders restructured, modified or extended loans.  Based on individual circumstances, the tend will continue this year.

Projections indicate approximately $10 billion to $12 billion of self-storage loans will mature in 2010.  This amount is similar to prior years; however, there seems to be a shrinking acceptance of the storage property type with local and national capital sources that are able and willing to finance self-storage owners. In today’s environment, each bank has a unique philosophy guiding its ability and desire to extend credit.

Most lenders are now trying to work out troubled commercial real estate loans. Many will continue to clean up and maintain current balance sheets and focus on existing clients, thus making lending approvals a highly competitive experience for property owners. 

Banking relationships. Maintaining a proactive relationship with your lenders cannot be overemphasized. Let them know how your property is performing—good or bad. Be sure to provide them with required documents in a timely manner.

Unfortunately, you cannot be certain if your relationship with a loan officer or lender will last. We are all aware of the high turnover rate among these professionals. Many have been transferred to their banks’ distressed-asset workout units given the increase in property foreclosures.

The other uncertainty is the health of the bank itself. More than 100 banks closed in 2009, with projections of another 200 or more being shuttered and assumed by either the FDIC or other banking institutions before this financial crisis is finally over.

Banking deposits. To close a deal today, property owners must be able and willing to provide lenders with operational deposits as well as some depository facility. Be forthcoming in what you and your partners can offer in the form of deposits. Banks will continue to look for sources of capital, and good old-fashioned deposits are the most basic.

Recourse. With some very low leverage exceptions, most loans will require a recourse element going forward. This presents you and your partners with a new decision: Who is willing and has the wherewithal to sign personally for a self-storage loan? Often, the lender answers the question by requiring all the property’s owners to sign recourse.

Before you put your name on the dotted line, though, keep in mind that with many loans being modified and extended, recourse will come into play. As an owner, you’ll need to believe in the property and the ultimate ability to refinance it, even if you’re able to extend for a one- to three-year period today.

Elastic street rents. If an appraisal is required, it’s difficult to peg market rates today. Many owners are pricing concessions into street rents. Actual rent rolls for you and your competitors would reflect an expected rent from occupied units that is higher than if you were to extrapolate street rents currently being quoted. 

It’s important to stress to lenders and appraisers that rents are elastic and can change daily. They need to take into account a period of time and devise reasonable market data points in determining “market.” An appraiser strictly using current discounted market rents will drastically hurt the final appraised value. This may be the difference in whether a deal is financeable or not. 

Extend/modify maturities. A phrase frequently heard in the banking sector these days is “extend and pretend,” which refers to lenders extending loans while hoping for better times. The real question is whether they are simply kicking the can down the road and putting off the problem to a later date.

Property-loan extensions could very well be the best answer when alternative financing is not available, or if a forced sale in a weak market would result in substantial losses to the borrower and even the lender.

In today’s environment, be willing to negotiate. Lenders generally want give and take and expect some additional commitment from the borrower. Often, that arrives in the form of additional collateral, principal paydown, recourse, or additional structure to existing loan terms.

CMBS loans. If you currently hold a maturing commercial mortgage-backed security loan, try to obtain new financing. If you need to work with a servicer, a new rule established in late 2009 allows a master servicer to address a potential extension or modification with the owner prior to the property going into actual default.

Keep in mind that servicers will not write down the loan’s principal balance. The typical extension period is for one year at a time, with at least a one-point fee and some principal paydown. Non-performing loans are handled on an individual basis. 

Seek Professional Advice

Today’s market is moving quickly. Given this highly dynamic financing environment, you should consult with storage-lending experts who are in the market on a daily basis and can help you through these trying times.

Ask questions, get advice, and then decide how to best maintain your serve. The players with the stamina and strategy to survive this cycle will still win, even if they are once again facing a break point.
Neal Gussis is a principal at Chicago-based The BSC Group, a full-service financial services firm, where he provides mortgage brokerage and financial consulting solutions to commercial real estate owners nationwide. During his career, Mr. Gussis has secured more than $1 billion in self-storage financing for client transactions. To reach him, call 847.922.3750; e-mail
[email protected]

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Mansfield Self Storage Unveils New Mural

James Boisvert, owner of Mansfield Self Storage, commissioned artist Linda Goff of LLG Design to paint a gigantic mural on the exterior of the facility in Mansfield, Conn.

Stretching 50 feet, the mural depicts a row of several units including open and closed units. “Everyone tells us how much they like the mural,” Boisvert says. The project is chronicled on Mansfield Self Storage’s Facebook page.

Goff has painted hundreds of residential and commercial murals. She donated a large-scale mural to Saint Francis Hospital. The mural was a reproduction of Eric Carle’s award-winning artwork in the book, The Very Hungry Caterpillar.

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Extra Space Storage Releases 4Q Cash Dividends

Extra Space Storage Inc., a Salt Lake City-based owner and operator of self-storage, announced its board of directors has declared a fourth-quarter cash dividend of $0.13 per share on the common stock of the company. The dividend is payable on December 31, 2009, to stockholders of record at the close of business on December 10, 2009.

Together with the $0.25 cash dividend paid to date, the company's aggregate 2009 cash dividends will total $0.38 per share, which approximates the company's distribution requirements to maintain its status as a real estate investment trust (REIT). Extra Space's dividend policy is set by its board of directors on a quarterly basis.

Extra Space Storage Inc. is a fully integrated, self-administered and self-managed REIT specializing in the ownership and operations of self-storage properties. The company currently owns or operates 749 self-storage properties in 33 states and Washington, D.C.

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