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The Right to Refuse Service

Self-storage is often a magnet for drug users and makers, con artists, thieves and other baddies. For a relatively small monthly fee, people can slip in, close the rolling door and conduct their business in private. While security cameras and gates can help keep crime and criminals out, the self-storage manager is truly the gatekeeper. 

A recent thread on Self-Storage Talk explores whether it’s OK to say no to a potential renter based solely on a manager’s gut feeling. While many may see this as “profiling,” others view it as safeguarding their self-storage operation. Self-Storage Talk member Danielle writes, “... we do not need every customer that walks through the door. It pays to be selective.”

Much like the old “no shirt, no shoes, no service” signs still found outside some restaurants, bars and retailers, turning away a potential problem is a manager’s right. In the same thread Gina 6K shares what happens when a baddie slips through the cracks: cops, a whole lot of swearing, and a generally bad night.

During this time of year, more people are charitable and in better spirits. However, giving someone the benefit of the doubt could result in a nightmare down the road. While I’m not suggesting you turn away anyone outside your comfort zone—whether it be piercings and tattoos, religious clothing, whatever—I do recommend you go with your gut. If the guy seems shady, he probably is.

On the flip side, how do you gently show these people the door? The obvious answer is a simple, “We’re full.” But be forewarned, these people will often come back a few days—or even weeks—later and may seek entry via a different manager so make sure everyone’s on the same page.

Turning a potential renter away is never easy—especially for operators fighting for every rental dollar. But sometimes it’s just the right thing to do.

Share your thoughts on refusing service by posting a comment below or join the discussion Self-Storage Talk.

Survey: Commercial Real Estate Recovery Will Be Slow

The road to recovery for commercial real estate will be slow and long, according to a study commissioned by PricewaterhouseCoopers (PwC).

The Korpacz Real Estate Investor Survey shows real estate investors don’t expect a recovery in the commercial sector until late 2011 or 2012. In addition, billions in commercial mortgages are expected to come due in 2010.

Self-storage has fared better than most other commercial real estate classes. Revenue has declined but remains relatively stable compared to office, multi-family and warehouse sectors, the report shows. Overall, investors are optimistic about self-storage investment.

Despite the challenges, the firm says next year will be a good time to purchase commercial real estate. Prices will likely be influenced by politics rather than occupancy rates, PwC says. However, sales activity will likely remain sluggish across all property types. Government policy has already had a positive influence on the commercial real estate sector and will likely determine the shape of its recovery, the firm says. 

Source:  DSNews.com,  Commercial Real Estate Has Long Road Ahead to Recovery

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Canadian Mini-Warehouse Properties Opens Self-Storage Facility in Ontario

Canadian Mini-Warehouse Properties Co., the general partner of Public Storage Canadian Properties, opened a new self-storage facility in Oakville, Ontario, Canada.

The facility consists of a three-story climate-controlled building and three single-story prefabricated buildings totaling approximately 86,000 net rentable square feet and 770 self-storage units.

The total cost to develop this facility (including the land purchase price) was approximately $15.7 million. The facility will be managed by Canadian Mini-Warehouse Properties Co., the manager of the partnership’s other properties.

Public Storage Canadian Properties is a publicly held limited partnership. The partnership owns 28 operating self-storage facilities across Canada, 16 of which are located in Ontario. In addition, the partnership owns parcels of land in Orleans, Ontario, and Richmond Hill, Ontario for development into new self-storage facilities.

Source:  Earth Times,  Public Storage Canadian Properties Announces Opening of New Self-Storage Facility in Oakville, Ontario

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Bancap Brokers Sale of Lender-Owned Self-Storage in CA

Bancap Self Storage Group Inc. brokered the sale of St. Thomas Self Storage in Hesperia, Calif.  

Located on nearly 5 acres of land, the facility has about 73,000 net square feet of self-storage space with nearly 500 units. The sale also included an acre of vacant land adjacent to the storage property. The single-story project was built in 2007, and constructed of concrete block and metal walls with metal partitions, roofs and doors.

Bancap President Dean Keller was the exclusive listing broker for the transaction. Greg Wells of Grubb & Ellis|BRE Commercial represented the buyer. The seller was a regional bank that had foreclosed on the property earlier this year. The buyer was a private real estate investment trust with other self-storage holdings in the area. It’s the third lender-owned storage property Bancap has brokered this year.

The property sold for $2.7 million, which was significantly less than the development costs. The seller provided purchase financing to facilitate the sale. Occupancy was approximately 35 percent.

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Robson Communities Pursues Self-Storage in Sahuarita, AZ

Real estate developer Robson Communities submitted a rezoning request to the town of Sahuarita, Ariz., for a 50-acre commercial center that will include a self-storage facility, a convenience store, retail space and an RV-storage yard, according to a preliminary plan submitted to the Planning and Zoning Department. The proposal will go before the commission on Jan. 4.

Regardless of some complaints that the project is not consistent with the historic nature of Old Nogales Highway and objections that the property is in a flood plain, the Town Council approved a General Plan Amendment changing the planning designation from floodplain to commercial.
 
The self-storage and other businesses would serve the Madera Highland, Quail Creek and Stone House housing communities, which will eventually encompass approximately 6,800 homes. There are few retail services nearby.

Source: Green Valley News and Sun, Quail Creek gets look at commercial plan

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Invista Secures $42.7M for Big Orange Self Storage Fund

Invista Real Estate Investment Management PLC secured $42.7 million from a U.S. institutional investor for the Big Orange Self Storage Fund. The new equity will be used to grow the company’s self-storage assets in Asia.

Invista purchased the fund from Babcock & Brown, the Australian investment house that went into administration in April. Established in 2006, the fund supplies self-storage and storage management solutions in Hong Kong and Singapore. It currently owns 35,000 square metres of self-storage space across five sites.

The fund is currently owned 100 percent by Invista Real Estate International Fund which, in turn, is 50 percent owned by Invista.

Source:  Property WeekInvista Secures a US$42.7m for Big Orange Self Storage Fund

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Marcus & Millichap President Speaks on CNBC 'Closing Bell'

Harvey E. Green, president and CEO of Marcus & Millichap Real Estate Investment Services, was featured on the CNBC program “Closing Bell” on Dec. 15. Anchored by Maria Bartiromo, the show examines the final hour of day trading, addressing how the stock markets are moving, what's driving them and how investors are reacting. Green was invited to discuss commercial real estate conditions, the current state of the real estate investment trusts, and a REIT industry outlook for 2010.
 
To view a copy of the broadcast, visit http://www.marcusmillichap.com/Video/cnbc_121509.asp

Marcus & Millichap is one of the largest investment real estate brokerage firms in the nation, with more than 1,300 real estate specialists in more than 70 offices. The company includes a National Self Storage Group that specializes in self-storage real estate transactions.  

Prior to his appointment as company president, Green served as chief operating officer since 1996. He was previously senior vice president, responsible for the firm’s nine Southwest offices. He joined Marcus & Millichap in 1981 as regional manager, responsible for opening the firm’s Encino office.

During his 37-year career, Green has initiated the close of real estate transactions valued at nearly $6.6 billion, including retail properties, office buildings and apartment complexes ranging in value from $1 million to $100 million. He has been involved in every aspect of the real estate industry, including development, commercial leasing, investment sales and firm acquisition. He also was responsible for the development and implementation of the firm's investment real estate training program.

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Roemer Way Self-Storage Opens, Caters to Wine-Storage Customers

Roemer Way Self-Storage in Santa Maria, Calif., now offers temperature-controlled storage. The facility has 52 temperature-controlled units for local wine enthusiasts, travelers and wineries, says manager Laurie Bickham.

The units will allow travelers to buy larger quantities of wine to take advantage of case discounts, leaving most of it in storage and taking samples home, she adds. The units also offer wineries an alternative to onsite storage and give local wine enthusiasts an option for protecting their collections.

Source:  Santa Maria Times,  Temp-Controlled Storage Offered

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Princeton, N.J., Self Storage Opens for Business

Princeton Self Storage opened this month in Princeton, N.J. This project had been under development for several years and is the only self storage facility in the city. Its first phase contains 304 units and 35,875 rentable square feet. In addition to climate control, it offers 35 parking spaces for recreational vehicles.
 
The management contract for the facility was awarded to Investment Real Estate Management, which will now run daily operation. IREM manages more than 45 self-storage properties in six states.

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Equity Based Services Acquires Two Self-Storage Facilities

Equity Based Services Inc. (EBS) acquired two self-storage facilities, bringing its self-storage portfolio to 66 facilities. The properties, formerly operated as Access Self Storage, were acquired separately as two stand-alone facilities.

The first facility, in Colorado Springs, Colo., has 487 climate-controlled units, 31 of which are office-warehouse units, and 36 RV-parking spaces. The property has 77,720 net rentable square feet. This acquisition represents the second facility in Colorado Springs operated by All American Property Management Inc. (AAPMI) under the direction of Eric Kaplan.

The second facility, in Missouri City, Texas, is a single-structure climate-controlled facility featuring 560 rental units and 55,472 net rentable square feet. AAPMI now operates 26 self-storage facilities in Texas. The facilities will be re-branded American Mini Storage and managed by AAPMI.

Equity financing for the acquisitions came from a pool of private client investors as well as the recently closed EBS Income Fund III. The debt financing for these acquisitions came from a life insurance company and was arranged by Tavernier Capital Partners. The general terms of the loans include non-recourse, 7 percent fixed rate interest, 62 percent loan-to-purchase price ratio, and a 10-year term with a 25-year amortization.

EBS is a private real estate company specializing in the facilitating the acquisition of and the asset management of self-storage property.

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