Contributing Editors

Self Storage Investment Activity on the Rise According to New Study

by John Stevens July 22, 2011 9:16 AM
Self storage has weathered the downturn in the economy surprisingly well and has gotten much attention from investors in the process. In fact, in the second half of 2011, self storage real estate is expected to see an increase in investor activity as banks sell off distressed assets throughout the Sun Belt, particularly in California and Florida, according to a new report from Marcus & Millichap. [More]

Investor Interest in Self Storage Niche Grows As Annual Returns Hold Strong

by John Stevens April 4, 2011 12:14 PM
Self storage has caught the eye of commercial real estate investors with its impressive returns for 2010 and anticipated continued success for 2011. Publicly-traded self storage real estate investment trusts (REITs) yielded total returns of about 30 percent in 2010, faring better than the broader REIT sector and more than doubling the average total return for companies traded on the Dow Jones Industrial Average. [More]

Self Storage Acquisitions Too Hot to Handle?

by John Stevens January 17, 2011 8:09 AM
In the second half of 2010 investors swarmed to the self storage industry, buying up businesses like they were on the clearance rack. And the 2011 outlook for the domestic self storage market has “bullish” written all over it. Niche investors and lenders are increasing movement to this sector as In the second half of 2010 investors swarmed to the self storage industry, buying up businesses like they were on the clearance rack. And the 2011 outlook for the domestic self storage market has “bullish” written all over it. Niche investors and lenders are increasing movement to this sector as capitalization or CAP rates continue to decline and new investors join the buying game. [More]

LifeStorage Makes Rundown Building Shine and Wins MiniCo Award for Efforts

by John Stevens December 20, 2010 11:35 AM
It is hard to imagine that a dilapidated building nearly 100 years old that once housed drug addicts and homeless persons has been converted into a solidly built, attractive storage facility. And that’s not all! It just had the honor of winning the 2010 Facility of the Year Conversion Category by Mini-Storage Messenger, the leading international self storage trade magazine published by MiniCo Insurance Agency, LLC. [More]

Safestore Reports Loss Despite Increase in Customers

by Kim Kilpatrick February 2, 2010 10:47 AM
The United Kingdom's largest self-storage company, Safestore, has reported a full-year loss for 2009, even though the number of customers using its facilities has steadily increased. After making a pre-tax profit of £14.9 million in 2008, it recorded a pre-tax loss for 2009 of £9.4 million ($15 million). Per share earnings fell from 6.68p to a loss of 0.14p.

Occupancy of Safestore's storage units grew by 57,000 square feet in 2009, against a drop of 195,000 square feet in 2008. Rental rates also rose 4.9 percent. At year's end, Safestore was charging £25.24 per square foot of unit space. Safestore's UK and French earnings rose 1.9 percent, from £82.9 to £84.4 million. [More]

Tide Turning in Real Estate Markets; Self-Storage to Outperform the Rest

by Winnie Hsiu December 30, 2009 7:32 AM
The Wall Street Journal this morning predicted a much more stable real estate market for 2010 than the wild ride the market took investors for in 2009.... the WSJ reports that the Dow Jones Equity All REIT (Real Estate Investment Trust) Total Return Index is up 31% this year, which means that it has improved over its 2008 performance, when it was down 38%. In 2009, the real estate market showed its strongest performance since 2006. It even outdid the Standard & Poor's 500-stock index, which posted a 25% return. "It's been very much a roller coaster ride this year," noted Goldfarb. "And we're about to end this year on a high note."
....Lucas told the WSJ that he expected self-storage to be one of three types of REITS that will outperform the rest of the market (the other two are industrial and student-housing REITs). Self-storage can be expected to do well because it does not depend on the creation of new jobs. The recession has been less damaging to the self-storage industry, in general, than it has been for other real estate businesses. According to Inside Self Storage, this is partly because self-storage owners use 30-day leases, and therefore have the flexibility to change their rates immediately in response to changes in the market and to changes in demand. ISS also attributes the stability of self-storage companies to the fact that self-storage business owners, unlike the REITs Kirby refers to, tend not to over-leverage their businesses -- they are more likely to keep their leverage within responsible limits. As a result, they are less vulnerable to sudden shifts in the market.... [More]

Self-Storage Financing Options Still Include Non-Recourse Commercial Loans

by Holly Robinson December 22, 2009 12:05 PM
Equity Based Services (EBS) announced today that it has purchased two more self-storage facilities....The deal used a combination of equity and debt financing.

EBS financed the purchase in part with non-recourse loans, showing that non-recourse mortgages are still viable financing options within the self-storage market. Non-recourse loans are preferable to recourse debt when it is possible to obtain them. The debt financing, which was set up by Tavernier Capital Partners, came from a life insurance company.

The equity financing for the deal came from EBS' private investor pool and from the EBS Income Fund III, which was recently closed. The fact that EBS was able to arrange privately placed equity financing in addition to its mortgages shows that investors consider self-storage facilities to be strong, viable, low-risk businesses in which to invest. [More]

Wine Collectors Heat Up Singapore Self Storage Market

by Kim Kilpatrick December 21, 2009 10:11 AM
....Invista has received a $42.7 million investment from an American institutional investor, which it plans to invest in Big Orange. The new investment in Big Orange shows investor confidence in the Asian self storage market, which is beginning to heat up....Big Orange was established in 2006 to focus on the Asian self storage market. Many self storage investors are finding the Singapore market to be robust. In November, Hersing Corporation of Singapore, which owns the first self storage facility to open in Singapore (StorHub), reported that its 2009 third quarter profits were quadrupled over its profits from the third quarter of 2008. Not all of Hersing's profits came from StorHub -- many came from the Asia-Pacific branch of ERA Real Estate, which saw a 58 percent revenue increase during the same period -- but Hersing noted that the StorHub Self Storage business had proven to be very recession-resilient....

In Singapore, the demand for self storage is in large part driven by the demand for specialty storage such as wine cellars.... [More]