StorageMart Enters European Storage Industry With UK Acquisition

StorageMart has entered the European self storage sector with the acquisition of 15 Big Box Storage Centre locations in Southern England.  The deal in excess of 100m British pounds is the largest ever single self storage transaction in the UK.

StorageMart is the world’s largest privately-owned self storage company with 189 locations in the United States, Canada and now the United Kingdom. StorageMart plans to use the 15 locations in counties such as Kent, East Sussex and Buckinghamshire, to grow within the UK. The portfolio includes new stores recently developed and opened in Tonbridge, High Wycombe and Colchester.

“These are great locations in solid markets, and we look forward to applying our technology platform and revenue management strategies at these stores,” said Cris Burnam, president of StorageMart.

The entry into the United Kingdom is another significant growth step for StorageMart. The Columbia, MS,-based company expanded into Canada in 2007 and two years later became one of Canada’s largest single owner/operator with the friendly buyout of Canadian InStorage Real Estate Investment Trust.  By 2012 StorageMart had more facilities in Canada than any other storage operator.

In the United Kingdom, StorageMart has added almost 10,000 storage units and 674,756 square feet of space.

StorageMart was founded in 1999 by Gordon Burnam. Prior to founding StorageMart, Burnam founded Storage Trust, which he took public in 1994 and sold to Public Storage for $600 million in 1999.

Public Storage Expands in Sooner State With 11 Stores

Public Storage (NYSE:PSA) is dancing in the end zone after acquiring 11 properties developed by famed Oklahoma football coach Barry Switzer.

In October Public Storage acquired 11 properties in the Oklahoma City area, more than doubling its presence in the state. Public Storage purchased most of the Switzer’s Locker Room locations. That business was started by Switzer, his son-in-law Hunter Miller, and country music star Toby Keith some years ago.

While the deal is under a confidentiality agreement, the portfolio is estimated by some at $40 million or more, according to The Oklahoman newspaper.

Public Storage’s new locations include four facilities in Oklahoma City, two in Edmond, two in Lawton, one in Moore, one in Norman and one in Broken Arrow.

 Oklahoma City is a prime market for Public Storage, growing at 9 percent over the last 5 years and topping out at 630,000, according to the US Census Bureau. Tech, aerospace and healthcare are growing industries there.

The Switzer partnership is developing two more storage facilities that it’s likely to sell to Public Storage.

In a separate announcement, Marcus & Millichap said that Charles “Chico” LeClaire (SVP of investments) and Adam Schlosser (VP of investments) represented Switzer and his investors in the transaction. LeClaire and Schlosser also procured the buyer, Public Storage.

“This portfolio is the finest in the state of Oklahoma,” said LeClaire. “These facilities, along with the eight properties already owned, will give Public Storage a formidable position in the Oklahoma market. It was a perfect match, giving the seller a great price and the buyer an opportunity to lease up existing vacancy and increase NOI substantially.”

U-Haul Helps Hurricane Matthew Victims

Victims of Hurricane Matthew in early October have received help from 12 U-Haul Companies across four Southeastern states.

Residents in Florida and North and South Carolina affected by the storm were offered 30 days of free self-storage and U-Box container usage to residents impacted by the storm. In total 112 self storage facilities in 59 cities are available to provide assistance. Residents fleeing the flooding and looking for a place for themselves will also have a place for their furnishings and photos.

Hurricane Matthew was a Category 5 window that ripped across the Caribbean and southeastern United States in early October, causing devastation in Haiti, Cuba, Dominican Republic and the southeast, including Florida, Georgia, South Carolina and North Carolina. The storm is blamed for 47 deaths and $8.2 billion in damage.

Talonvest Report: Borrowers Facing More Lending Pressures

Borrowers are facing more cautious lenders, higher expectations of performance and increasing regulatory time pressures as they seek bank, bridge and CMBS loans. That’s according to an October capital market update by Talonvest Capital, Inc., of Irvine, CA.

“Banks are becoming more cautious and are scrutinizing borrowers’ personal financial statements more thoroughly with increased focus on “global cash flows” and “contingent liabilities,” Talonvest financial advisors report. 

Lenders are facing increased regulatory pressures as new regulations are slated to go into effect in December. This means some banks are putting more emphasis on the appraiser’s lease-up projections for construction loans, which may result in more conservative underwriting. Borrowers seeking a CMBS loan may encounter spreads that will likely increase for loans that won’t close by early November. It’s a move by the conduit lender to protect themselves again the risk that those loan can’t be included in securitizations before new regulations go into effect.

Despite that risk, Talonvest relationship managers say one large CMBS lender is bucking that trend and offering lower pricing than competitors.

CBRE Group, Inc. Releases Third-Quarter 2016 Self Storage Investor Survey

Self storage cap rates are falling and are expected to continue to compress. A cap rate is the ratio of net operating income of a property to its market value, or the percentage return an investor would get if she purchased the property with cash.

That’s the finding of CBRE Group, Inc.’s third-quarter 2016 Self Storage Investor Survey. Self-storage cap rates have declined to an average of 5.64 percent, down 10 basis points compared to the fourth quarter of 2015.

“The decline is due to continued investor interest in the sector and an increasing spread between the average cap rate and the 10-year Treasuries,” the report states.

The survey also looked at absorption time, marketing time, optimism index, profit on costs, trade-area size and other metrics. The survey is based on interviews with more than 50 buyers, brokers, investors, lenders, owners and real estate investment trust analysts.

CBRE’s report also says storage is likely to be less impacted by an increase in interest rates than other core real estate types.