Self-Storage Companies Lose Business as Customers Pinch Pennies

Self-storage companies are finding that during a recession, customers are willing to part with their personal items to save cash. As a result, self-storage real estate investment trusts are feeling the pinch, as share prices have dropped as much as 40 percent. General concerns for these companies are the challenge of luring new customers, declining occupancy and refinancing debt.
 
Robert Schoff, chairman of the Self Storage Association Board of Directors, said it will be interesting to see if self-storage facilities lose business this year because customers choose to cut cost vs. save stuff.
 
Source: The Wall Street Journal, Savers Drop Self-Storage: As Pack Rats Cut Costs, Storage Companies Lose Business

Mini Warehousing Receives SOMWBA Certification

Mini Warehousing Inc., a provider of portable-storage containers in Massachusetts and Rhode Island, has been reviewed by the Department of Business and Technology and received certification from the State Office of Minority and Women Business Assistance (SOMWBA). The company meets the requirements under state and federal statutes and regulations to receive affirmative business opportunities for minority-owned businesses.
 
SOMWBA is an agency within the Commonwealth of Massachusetts that promotes the development of business enterprises and non-profit organizations owned or operated by minorities and women. Its certification is a marketing tool used to enhance a firm's ability to do business in public markets.
 
Mini Warehousing has been in business for more 30 years.

Northwest and Southern Self Storage Partnership Buys Memphis Portfolio

The Northwest and Southern Self Storage Partnership bought two Memphis, Tenn.-area self-storage facilities from 4Guys LLC for $2.4 million. The portfolio, developed by 4Guys in the 1990s, includes Southern Self Storage in the Oakhaven/Parkway Village area and Northwest Self Storage in Frayser.
 
Southern Self Storage is a 57,290-square-foot, multi-building facility on 4 acres. Northwest Self Storage is a 56,185-square-foot, multi-building facility on 3.5 acres.
 
Anne Williams of Marcus & Millichap’s Memphis office brokered the transaction for the buyer and the seller.
 
The Northwest and Southern Self Storage Partnership is comprised of representatives from Brentwood Investors Group­–Memphis LLC, Hauco Investments II LLC, Tim II LLC and Superior Realty Investments II LLC. The partnership financed the purchase with a $2.1 million loan through Planters Bank Inc.
 
Source: The [Memphis] Daily News Online & Chandler Reports, Storage Portfolio Sells for $2.4 Million

Wiggin Properties Negotiates $2.8M Self-Storage Sale

23rd Street Self Storage in Oklahoma City was recently sold for $2,765,000. The seller was BEBOP Real Estate Investments LLC, and the buyer was Tom Kilpatrick, president of Kilpatrick Investment Co. Jeff Lester and Clay Moss of Wiggin Properties brokered the transaction. The property, constructed in 2003, consists of 52,070 square feet, 13,845 of which are climate-controlled. Additional land is available for the storage of RVs and boats.
 
Wiggin Properties specializes in the sales, leasing, management and development of commercial and investment properties in Oklahoma.

Storage Investment Management Takes on Three New Facilities

Storage Investment Management Inc. (SIMI) has been appointed property manager of Framingham (Mass.) Self Storage, All American Self Storage in Methuen, Mass., and Storage America in Garden City Park, N.Y.
 
Framingham Self Storage is a 63,000-square-foot property featuring 500 climate-controlled units and office space for rent. All American Self Storage, with 32,000 square feet, features 266 drive-up units. Storage America is a 96,000-square-foot facility featuring 693 climate-controlled units as well as office and conference-room space.
 
SIMI is an owner-operator, fee manager and consultant of self-storage property, predominantly in the Northeast. The new contracts bring the number of SIMI-managed properties to 11 in Massachusetts and seven in New York.

Mele Helps Self-Storage Owners Battle Property Taxes in Martin County

Self-storage facility owners in Martin County, Fla., have gotten some justice in relation to property taxes and facility value thanks to the efforts of Mike Mele, vice president of investments for Marcus & Millichap Real Estate Investment Services. With Mele in attendance as an independent third-party consultant, 21 self-storage owners made appeals to the Value Adjustment Board in January and won their cases.
 
In late 2008, the Martin County Department of Revenue proposed a change in the way self-storage values were calculated for tax purposes. The potential change involved altering the way facilities were assessed on income. In some instances, owners saw their tax bill triple.
 
“This was an unreasonable and unjustified increase and something needed to be done,” said Mele, who spearheaded the group effort of Martin County self-storage owners. Through e-mails, conference calls and collaboration with facility owners and county officials, he and his team were able to establish vital steps in the process of combating the tax increase. In addition to serving as a point of contact, Mele provided information regarding normal expense ratios, statewide occupancy trends, and a county-specific rent and occupancy analysis.
 
Mele also worked with Martin County’s Property Appraisers Office, helping to educate people on the self-storage industry so they could better understand how facilities are traditionally valued.
 
Mele works in Marcus & Millichap’s Tampa, Fla., office. In 2008, he participated in 24 separate transactions comprising 36 properties and more than $95 million in closed deals. For more information, visit www.melestoragegroup.com.  
 
With more than 1,300 investment professionals in offices nationwide, Marcus & Millichap is the nation’s largest firm specializing in commercial real estate investment services.

Sovran Purchases Cincinnati Self-Storage Facility for $4.3M

Sovran Self Storage Inc., doing business as Uncle Bob’s Self Storage, purchased a 66,520-square-foot self-storage facility in Cincinnati for $4.3 million. The site consists of four buildings in the Red Bank Industrial submarket. Adam Schlosser and Brett Hatcher of Marcus & Millichap represented the seller. Angelo Tomasello of the Locke Group represented the buyer.

Proposed Oregon Bill Complicates Lien Sales for Self-Storage Operators

A new bill has been proposed in the Oregon Legislature that would require self-storage facility owners to dispose of tenant goods that go to lien sale “in a manner reasonably intended to realize proceeds close to market value of property” if no bids are offered at the time of sale. Sponsored by Rep. Brent Barton, D-Clackamas, House Bill 2911 deletes a current statutory provision that allows facility operators to dispose of a unit’s contents if no bids are received during lien sale. In addition, operators will be required to hold the balance of proceeds after satisfaction of the lien for the tenant, and if the tenant does not claim the funds within two years, to report and deliver the balance to the Department of State Lands.
 
The standard for the reasonable realization of proceeds is not defined in the bill. The measure is opposed by the Self Storage Association, which will engage with its sponsors to understand their intent and suggest alternatives.
 
To read the proposed bill, visit http://landru.leg.state.or.us/09reg/measpdf/hb2900.dir/hb2911.intro.pdf.

President Signs $410B Spending Package

President Obama signed a $410 billion spending package Wednesday that includes billions in earmarks like the ones he promised to reign in during his campaign.

He acknowledged the bill was "imperfect," and insisted it must signal an "end to the old way of doing business." He vows to work with Congress to end the abuse of earmarks.

The massive measure funds federal agencies through the fall and contains nearly 8,000 pet projects, known as earmarks and denounced by critics as pork.

Source:  MSNBC.com,  Obama Signs $410B Spending Bill  

U.S. Employers Promote Wellness Programs

Looking to lower health costs and boost employee health, a number of U.S. companies are embracing wellness programs and issuing health challenges.

The Health and Hospitals Corp. of Marion County, Ind., challenged its 800 employees to count the number of steps they take daily. Participants were entered into a raffle to receive a gift certificate to a local sporting goods store. 
   
Companies are also highlighting existing benefits offered through health insurance plans, such as annual physicals and nurse hotlines.

Source:  Workforce Week,  Companies Find Inexpensive Ways to Promote Wellness