US Economy Set for More 2 Percent Growth

The US economy is likely to continue its slow but steady pace into 2017, according to John Connaughton, Barings professor of financial economics at the University of North Carolina at Charlotte’s Belk College of Business. The US has enjoyed an 89-month economic expansion since the financial crisis of 2008. It’s the 4^th longest expansion of the 33 expansions since economists started counting in 1854.

Positive indicators for the self storage industry include low unemployment (just under 5 percent) and the highest consumer confidence index since the summer of 2007.

Those positive signs and others mean the Federal Reserve is likely to raise the Federal Funds rate next week. It’s been a year since the Fed raised from .25 percent to .5 percent, and Connaughton said the question is whether the Fed makes another .25 percent jump or .5 percent jump this time. He expects the Fed to repeat the task several times in 2017.

“The Federal Funds rate may be 1.25 percent or 1.5 percent this time next year,” Connaughton said. Still he didn’t expect such a rise to have a negative impact on major purchase decisions, such as home buying, boat or RV buying, which impacts storage.

“It’s hard to see how a 1.25 percent Federal Funds Rate is going to cause people to postpone buying big things. That’s the same with home buying. A home mortgage rate goes from 3.25 percent to 4 percent, which isn’t much when you consider the price increases of homes going forward.”

The US economy has grown by an average of 2 percent each of the last seven years. Without major changes to the size of the labor pool or gains in productivity, that number is expected to remain the norm.

NSAT Buys 26 Properties in Four States

National Storage Affiliates Trust has acquired a 26-property portfolio in four states from Kayne Anderson Real Estate Advisors, LLC. The 1.8-million-square-foot portfolio consists of six facilities in California, five in Florida, eight in Indiana and seven in Ohio. Five of the properties will be expanded by 345,000-square-feet, adding another 796 units.  Marcus & Millichap brokered the deal.

“We are especially enthusiastic about the opportunity to apply NSA’s technology platform tools to these new acquisitions, which will further fuel the company’s growth,” said Arien Nordhagen, NSAT CEO and Chairman.

The buyer and seller were represented in the transaction by Chico LeClaire, senior vice president of investments and Adam Schlosser, vice president of investments, in the Marcus & Millichap Denver office.

National Storage Affiliates Trust is a self-administered and managed REIT focused on self storage. The company owns 446 storage properties in 23 states.

Jernigan Capital Makes Florida Investments

Jernigan Capital Inc. has invested $12.6 million in the development of two self storage facilities in Florida.

The facilities include a $7.5 million investment in a planned 784-unit, climate controlled facility in east Jacksonville that PLG Properties LLC is developing. It’s the first co-investment between Jernigan and PLG Properties. The second project was a $5.1 million investment commitment for an additional 256 units to be added to an existing CubeSmart-managed facility in Ocoee that opened in May 2016. The facility is currently 65% leased. Storage Builders II LLC is the developer of that facility.

Big Tex Self Storage Gets Bigger

Big Tex Self Storage opened a third self storage facility in the Houston area in November. The new 100,000-square-foot building contains units for residential and commercial storage and wine storage.

The project incorporates landscaping and sidewalks along Richmond Avenue in Montrose, TX, along with a 15-by-10-foot exterior “art wall” that will feature artists’ works rotating quarterly.

Big Tex operates a combined 290,000-square-feet of self storage in the Houston area. In 2018 the company plans to add an additional facility in the area.

HFF Hires New Director for Self Storage Investments

HFF has hired Tom Doyle as a director focusing on the company’s self storage investment sales transactions in the southeast and southwest. Doyle will work in the firm’s Tampa office.

Doyle comes to HFF from SkyView Advisors brokerage firm where he was a senior vice president.  Prior to his career in self storage real estate, Doyle played professional baseball at the AAA level for the Phillies, Padres, Reds, Rockies and Mariners over a 14-year span and was a special assignment coach with the Yankees and the Rays. He is a member of the Florida Self Storage Association board of directors, Georgia, North Carolina, Tennessee and Alabama Self Storage associations.

“Tom is a respected leader in the self storage space and has developed a reputation for integrity and professionalism, knowledge of the market and dedication to his clients through his long-term relationships,” said Mat Mitchell, senior managing director and co-head of HFF’s Tampa office.

Global Self Storage Buys in Northeast

Global Self Storage Inc. will buy two storage facilities and an adjoining commercial property from Tuxis Corporation. The properties include a 185-unit storage facility in Clinton, Conn, a 142-unit facility in Millbrook, NY, and an adjoining 1,875 square foot Millbrook commercial property. Global Self Storage will pay $7.8 million in cash and stock.

Global Self Storage is a self-administered and self-managed REIT. Tuxis Corporation is a self storage and real estate development company.