Transactions and Deals: January 24, 2020
posted on 1/24/2020 7:25:00 AM
Mesa, AZ, facility sells to Prime Storage Group
Quantum Property Advisors brokered the sale of Self Storage With More, a 91,569 square foot self storage facility located at 5932 E. Brown Road, in Mesa, Arizona. The one- and two-story facility consists of 780 units, both exterior drive-up and air-conditioned units. The property was constructed in 2006.
Norman Herd, president of Quantum Property Advisors, represented the seller, Brown Recker SS Investors, LLC. The buyer, Prime Storage Group, an institutional owner of storage facilities based in Saratoga Springs, New York, paid $11.1 million for the facility.
Miami moving toward storage moratorium
Miami’s Planning, Zoning & Appeals Board backed two proposed ordinances that will put the brakes on new storage facilities in the city of Miami, according to The Real Deal.
The first rule, banning storage facilities near mixed-used residential areas zoned T5 and T6, passed unanimously during the board’s meeting January 15th. A second piece of legislation, a 270-day moratorium on any new storage facilities throughout the city, passed with a vote of 5 to 4, pending a “comprehensive review.”
Miami has sought in recent years to curb the development of new facilities. In March 2017, the city passed legislation mandating that new storage facilities in T5 and T6 have ground level retail and be at least 2,500 square feet apart.
Both ordinances must be passed by the Miami City Commission prior to becoming law. However, the board’s passage of the moratorium will prevent applications for new facilities from being processed due to the city’s zoning-in-progress law.
SD mall to transform to storage
The Mitchell, South Dakota, planning commission has approved a conditional use permit to transform the former Palace Mall into a multi-use building with self storage, according to the Daily Republic.
Mitchell Storage, LLC, a company owned by Mark Bigelow of Idaho, plans 500 storage units. The 151,044-square-foot building recently sold to Bigelow. The property is at 1801 N. Main Street.
St. Joe Co. plans FL storage development
Land development company, The St. Joe Company, plans to build and own a self storage facility in Santa Rosa Beach, Florida. The facility is planned for the South Walton Commerce Park near U.S. Hwy 98 and Serenoa Road.
The project will be three stories, approximately 90,000 square feet with more than 600 units. Completion is expected in spring of 2021.
PA developer rolls a strike on bowling alley conversion
Parkway Lanes bowling alley in Allentown, Pennsylvania, has sold to a local developer who will convert it to self storage, according to The Morning Call.
Raymond Bartolacci III purchased the bowling alley and a nearby auto repair shop at 1449 Lehigh Street. The new business will be StorHouse Self Storage-Lehigh Street.
Bartolacci bought the property from Abe Atiyeh’s Parkway Ventures LLC for $1.96 million and paid Atiyeh’s Abra Development 14 LP $25,000 for the repair shop property. The bowling alley is 44,700 square feet.
Storage planned for Los Angeles Op Zone
Staley Point Capital plans to demolish a 21,000-square-foot South Los Angeles light manufacturing complex in a federal Opportunity Zone and replace it with a self storage facility, according to The Real Deal.
Century City-based Staley Point is a new venture formed by Kevin Staley — who co-founded the Magellan Group — and his son, Eric, who recently left Blackstone Group.
In December, the investment firm paid $7.35 million for the site located at West 25th Street and Broadway. It plans to replace the existing structures with a 109,000-square-foot storage facility.
Developers who undertake projects in Opportunity Zones can realize significant tax benefits by investing their capital gains in designated census tracts.
CMBS lending increased 28% in 2019
Talonvest Capital offered the following insights on capital markets:
Regarding fixed rate perm loans, volatility concerns in the second half of the year have led several lenders to encourage borrowers to close on their 2020 refinances by the end of the second quarter.
CMBS lending volume in 2019 totaled $96 billion, a 28% increase from 2018, and those lenders expect 2020 volume to grow slightly. 10-year interest-only loans continue to be readily available in the market with an all-in fixed rate in the mid 3.00% range and LTV typically up to 65%.
The debt fund/alternative lender space continues to be very robust for bridge loans. There are estimates that 200+ non-bank bridge lenders are in the marketplace.
Banks continue to dominate the construction lending space with leverage typically in the 60-70% range. Banks are requiring some level of personal recourse on nearly all construction lending scenarios.
BETCO improves its Model 500 door
BETCO Inc. has made several enhancements to its Model 500 Roll-Up Door. The new model will be available in late spring. The redesign allows for more standard and premium color options, shortens manufacturing and installation lead times, and extends the door’s expected lifespan. It also complies with the Americans with Disabilities Act for self storage roll-up doors. The new model incorporates a dead-axle design and an enclosed torque tube assembly, which provides a smoother operation compared to previous designs. The enclosed tube protects the door spring while simultaneously strengthening the door’s axle. Together, these features eliminate axle shift and allow one-spring adjustments with dual spring impact, according to BETCO.
Based in Statesville, North Carolina, BETCO produces steel roll-up doors and hallway systems for self storage and other industrial applications. It also provides refurbishing services for existing self storage buildings.
MO storage sells to KC firm
Block & Co. Inc. Realtors has arranged the sale of a 28.6-acre self storage property in Independence, Missouri, for $10 million. The facility features 741 enclosed units and 450 parking stalls. William Glasgow of Block & Co. represented the seller, Lake City U-Store. The buyer, State Storage Group Kansas City LLC, plans to modernize the facility.
Lindsey brokerage names associate in Europe
Lindsey Self Storage Group has named Pieter Ligtvoet as its newest European associate. Ligtvoet has 22 years in the self storage industry and has worked on 500 projects in 22 countries as a management or marketing consultant. Ligtvoet is co-founder of the French Inter-professional Chamber of Self Storage.
Yardi: 1.7% street rate decline over 2019
The U.S. self storage sector enters the new year where it left off in 2019 as operators continue reducing street rates amid high levels of supply, according to a new report from Yardi Matrix.
The report documents a 1.7% year-over-year national street rate decline for standard 10x10 non-climate-controlled units in December 2019. Highly oversupplied Charleston, South Carolina, shed a full 9%. Rates for similar-size climate-controlled units fell by an average of 3%. Of the 31 major markets tracked by Yardi Matrix, only Los Angeles, San Francisco Peninsula/East Bay, California’s Inland Empire and Las Vegas saw rate growth in both categories.
Portland, Oregon, whose new-supply pipeline equaled 18.8% of total inventory, had the most development in December, followed by historically underpenetrated markets New York City and San Jose, California. In Seattle, however, robust employment gains have helped create adequate demand to keep pace with new supply.
LeClaire Group sells 12-property MI portfolio
The LeClaire Group of Marcus & Millichap brokered the sale of a twelve property self storage portfolio with facilities located across southern Michigan. The portfolio spans 747,146 net rentable square feet with 6,209 units and was built from 1972 to the most recent expansions in 2013.
Charles “Chico” LeClaire, executive managing director investments, and Adam Schlosser, senior vice president investments, had the exclusive listing to market the assets. The brokers originally sold the portfolio in 2014 to the current seller, a joint venture between an unnamed private equity group, Paragon Outcomes, and Kurt O’Brien, CEO of Simply Self Storage. Simply Self Storage also managed the properties on behalf of the joint venture. The buyer, also procured by The LeClaire Group, was Oak Brook, Illinois-based Inland.
The twelve-property portfolio spans across multiple locations in Ann Arbor, Chesterfield, Grand Rapids, Kalamazoo, Lake Orion, Lansing, Novi, Okemos, Westland, Wyoming, and Ypsilanti.
Tags: Self Storage With More
, Mitchell Storage
, South Dakota
, StorHouse Self Storage
, Staley Point Capital
, CMBS lending
, Kansas City
, Lindsey Self Storage Group
, Yardi Matrix
, Simply Self Storage
, The LeClaire Group
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