Monday, December 20, 2010

Strategic Storage Acquires Two Properties in Southern California

In an all cash transaction, Strategic Storage Trust, Inc. (SSTI) – a publicly registered non-traded REIT targeting the self-storage market – recently acquired two properties in Long Beach and Hawthorne, Calif., totaling approximately 1,600 units for an aggregate purchase price of $26 million.

The sites will be rebranded under the SmartStop℠ Self Storage trade name.

“These are premium Southern California infill locations that add significant value to our portfolio,” said H. Michael Schwartz, SSTI’s chairman and CEO. “Dense population and newer construction are key attributes to both sites.”

The first property is located at 8150 E. Wardlow Road in Long Beach and contains approximately 87,000 rentable square feet with approximately 830 units on approximately 3.7 acres of land. The facility is located in Los Angeles County with easy access to Interstate 405, Freeway 91 and Interstate 605. Built in 1999, it consists of four buildings, one of which is two stories. Amenities include surveillance cameras, individual locks, climate control, keypad entry and an office for on-site management.

The second property is located at 12714 S. La Cienega Boulevard in Hawthorne, which is also part of Los Angeles County. The building contains approximately 87,000 rentable square feet with approximately 770 units on approximately 1.7 acres of land. It is adjacent to Interstate 405 access and is within one mile of access to Interstate 105. Built in 2004, the facility has one four-level building and another two-level building, along with a basement with ramp access. Amenities include surveillance cameras, individual locks, climate control, keypad entry and office and apartment for management.

“The Hawthorne site stands out due to its close proximity to the 405 Freeway, a dense surrounding population, newer construction and a great location between LAX and Manhattan Beach,” said Wayne Johnson, senior vice president of acquisitions for SSTI. “Both Long Beach and Hawthorne are high quality sites that will carry out our brand well.”

Although the properties were never put on the open market, there was competition from several other potential buyers, said Dean Keller of Bancap Self Storage Group, Inc., who brokered the transaction for SSTI.

“This deal could have easily fallen apart if Strategic hadn’t been such a strong and qualified buyer,” Keller said. “The seller had turned down many compelling offers on these first-class properties, but selected Strategic based on their track record, financial strength and ability to perform. Everybody worked hard – both the seller and the buyer - and it was a very fast close.”

The Los Angeles Metropolitan area is the third largest metropolitan economy in the world, with a population of 13 million and a GDP of over $500 billion.* Major economic drivers include international trade and commerce with an extensive transportation network with Los Angeles International Airport and the shipping ports of Los Angeles and Long Beach.

SSTI also owns a location in Orange County, California at 25650 Baffin Bay Dr. in Lake Forest, which consists of approximately 1,300 units.

Since the launch of SSTI 2.5 years ago, SSTI’s portfolio of wholly-owned properties has expanded to include 43 properties in 15 states (Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Mississippi, Nevada, New Jersey, Pennsylvania, South Carolina, Tennessee, Texas and Virginia) and Toronto - Ontario, Canada.

Friday, October 1, 2010

California Governor Signs Bill Amending State's Self Storage Lien Law

Governor Arnold Schwarzenegger signed into legislation this week a bill amending the California self storage lien law. The legislation (AB 655) was championed by the California Self Storage Association with significant funding support from the international Self Storage Association. The law addresses the "Declaration in Opposition” provision of the lien law resulting in a more cost-effective process and eliminating the number of baseless "declaration” scenarios. It also provides for a more reasonably-priced lien notification method. Storage operators will need to revise their current lien procedures by the law's January 1, 2011 effective date.

"We believe that the updates to the law will create a more efficient and cost effective process for operators and their tenants to communicate when customers have fallen behind in their rent,” says Shelley Geiler, president of the CSSA, board member of the SSA and a partner of SoCal Self Storage and SSA board member. "We could not have been successful in this endeavor without the joint effort of the national self storage association and the incredible support we received from our membership.”

Previously self storage lien circumstances where the "declaration” had been employed were settled in superior court creating a lengthy and expensive legal course of action. The new law enables self storage operators to resolve lien and auction disputes in small claims court. Taking into account the typical number of lien situations each year, the potential savings from the new process will be thousands of dollars for each facility and millions annually throughout the state. Also under the new law, verification of delivery of lien notices can be satisfied through certificate of mailing rather than certified mail, a much more costly method.

"We congratulate our partners of the California Self Storage Association for all of their hard work in streamlining that state's lien law,” said Michael T. Scanlon, Jr., president & CEO of the SSA. "The national SSA is working from state-to-state to modernize many of the lien laws so that they are fair to storage operators and take advantage of today's more efficient technologies.”

According to Jim McNamee, president of West Coast Self Storage and past president of the CSSA, "It was a lengthy three year battle for these common sense changes to become law; however it was well worth it. The passage of this bill is a win-win, and will save self storage operators and their customers time and money.”

Thursday, September 30, 2010

The Self Storage Sales Market is Hot Again

The Self Storage Sales Market in California is Hot Again!

Over the past couple months, there has been a dramatic improvement in the self storage sales market! Specifically for institutional quality properties in primary market areas, there has been a significant increase in activity.

Here is what we are seeing now:
A pent-up demand for quality properties.
Ample equity capital that needs to be invested.
Lenders are becoming more active with funds to lend.
Interest rates at or near all time lows.
Buyers are getting more aggressive.
Cap rates are coming down again.
Bidding wars on available self storage offerings.

Although buyers are still primarily interested in only purchasing based on "real" current income, they are becoming more aggressive in what they are willing to pay for that income stream.

We Have Motivated Buyers!
We Have All Cash / Quick Close Buyers!
We Have 1031 Exchange Buyers!
We Need More Good Properties to Sell!

I encourage owners of "investment grade" self storage properties in California to call us today for a free "No Obligation" analysis of the value of your self storage property.

Thursday, January 21, 2010

Five Star Storage in Vallejo sells for $4.5 million

Bancap Self Storage Group, Inc., the “#1 Self Storage Broker in California,” announced that the firm has successfully brokered the sale of the Five Star Storage property located in the city of Vallejo in Solano County, California. Bancap Self Storage Group, Inc. was the exclusive agent for the property. No other brokers were involved in the transaction.

The property sold for $4,500,000 in an all cash transaction. Both the seller and buyer were private parties in the local area. The sale was the 8th self storage deal in California that Bancap Self Storage Group had completed in the past twelve months, which is several times more than any other real estate brokerage firm had completed during that same time period.

Five Star Storage contains 81,664 net square feet of self storage space demised into 483 units. The single story project was built in 1980 and is located on Lemon Street. The property was approximately 90% occupied at the time of the sale.

Bancap Self Storage Group is the “#1 Self Storage Broker in California” with over $850 million in completed self storage sales, including many lender-owned REO properties, numerous portfolio sales, and a record setting single property sale at over $31 million. For more information, visit the company web site at

Monday, January 4, 2010

Just Sold: Five Star Self Storage - Vallejo, California

Bancap Self Storage Group just closed the sale of Five Star Self Storage in Vallejo, California. Complete details to follow soon.