Earlier this month, real estate investment group Equity Based Services, Inc., announced that it is acquiring a new self-storage facility, Advantage Self Storage (now to be called American Mini Storage) in Plano, Texas. The facility is located at 3900 McDermott Road in Plano, and has 554 units and 71,435 rentable square feet. The Advantage acquisition ushers in a new policy for EBS, one of aggressively acquiring new self-storage properties. EBS and other real estate investors have found that the economic climate currently is very favorable for buying self-storage. EBS, which currently owns and operates 64 self-storage properties in 11 states, plans to double its self-storage acquisitions over the next year.
"This is EBS' first acquisition under its new aggressive acquisition model," said EBS' Chief Operating Officer, Eric Kaplan. "In the next twelve months EBS expects to double its acquisition volume with high quality, cash flowing properties like Advantage Storage of Plano."
EBS financed the acquisition of Advantage Self Storage with an assumed loan from Bank of America. The loan is a 72% LTV mortgage. It has a 5.6% fixed interest rate, non-recourse, with an interest-only period that will end in 2012. After the interest-only period has expired, the loan will become a 30-year amortization. The equity for the acquisition came from EBS' Income Fund III and from EBS' pool of private investors. "The debt that EBS assumed for this property simply doesn't exist in the current lending markets....The ability to assume such a strong loan was definitely a bonus with this deal," remarked EBS' Fund Manager for its Income Fund III, Troy Downing. Angelo Tomasello, the president of Locke Acquisition Group, secured the transaction.
EBS considers Plano to be a good location in which to invest in self-storage, partly because Plano is the wealthiest city in the United States, according to the U.S. Census Bureau. CNN Money Magazine also rates Plano as the wealthiest U.S. city, and has designated Plano as the best place to live in the western United States. Plano was also selected by Forbes as one of the top three "Suburbs to Live Well."
"Advantage Self Storage in Plano is a great addition to the portfolio," says EBS CEO Stephen Kaplan. "This is quality, class-A construction, in a class-A location and an already stabilized, cash-flowing occupancy."