Public Storage Inc., a self-storage real estate investment trust (REIT), has acquired Derby Self Storage in Holiday, Fla., from Aegis Storage LLC. Built in 2004 on more than 5 acres, the property at 2262 U.S. Highway 19 comprises 64,100 net rentable square feet of storage space in 558 units, 223 of which are climate-controlled. The units range from 25 to 300 square feet. It also contains five vehicle-parking spaces as well as 600 square feet for parking, according to a press release from SkyView Advisors, the investment-sales and advisory firm that represented the seller in the deal.

“We are continuing to experience strong interest in the self-storage assets we have on market, and Derby Self Storage was no exception,” said Ryan Clark, director of investment sales for SkyView, which specializes in self-storage acquisition, development, facility expansion and renovation, refinancing, and sales. Based in Tampa, the firm also has offices in Cleveland and Milwaukee.

Just last week, Public Storage opened a new facility in Humble, Texas, a growing suburb that lies northeast of Houston. The three-story asset at 8717 N. Sam Houston Parkway E. comprises 140,000 square feet in 1,183 units. The climate-controlled building includes three drive-up units. The property is part of the REIT’s “ongoing effort to expand in the region,” according to a press release.

Based in Glendale, Calif., the REIT has interests in 2,354 self-storage facilities in 38 states, with approximately 155 million net rentable square feet. Operating under the Shurgard brand name, the company also has 220 facilities in seven European countries, with approximately 12 million net rentable square feet.

Boardwalk Development Group LLC, a self-storage acquisition and development company, has purchased Killian’s Park N Store, a boat- and RV-storage facility in Canton, Ga. The property at 1265 Univeter Road is the largest of its kind in Cherokee County, according to a press release.

Boardwalk has redesigned the parking layout to add more than 100 new spaces. The company also plans build 80,000 square feet of climate-controlled and traditional storage units next year, the release stated.

“We have developed a strong marketing plan to ensure we fill every available parking space, including the launch of a new interactive website [that] will allow customers to rent a parking space online and pay their bill online,” said CEO Rajen Sheth. “To provide greater convenience, Boardwalk plans to install a self-service kiosk on site and offer concierge services. The concierge will assist Killian’s members with arranging transportation to the airport, boat and RV detailing, and arranging repair services.”

The developer launched a $10 million equity-investment fund called Boardwalk Storage Fund I LLC last year, with the intent to purchase $50 million in self-storage properties. The fund will focus on facilities valued at $2 million to $8 million in Alabama, Florida, North Carolina, South Carolina, Tennessee and Virginia.

Headquartered in Johns Creek, Ga., Boardwalk is led by Sheth, who launched the ValueSpace Storage Fund I in 2008. The brand was sold last year to SecurCare Self Storage, one of eight participating regional operators of National Storage Affiliates Trust, a self-administered and -managed real estate investment trust headquartered in Greenwood, Colo.

 

A man who allegedly set fire to two vehicles at Buford Superior Self Storage in Georgia earlier this month was arrested shortly after he returned to the scene of the crime. Nicholas Minardi, 21, visited the facility at 1600 French Blvd. the day following the arson under the guise that he wanted to check on his girlfriend’s storage unit, according to the source.

Fire crews responded to the facility at 7:22 p.m. on July 23 after the storage manager heard a popping sound and discovered a car on fire. The blaze spread to two adjoining storage units, and fire crews found a second vehicle on fire at the opposite end of the storage facility, according to Capt. Tommy Rutledge of Gwinnett County Fire and Emergency Services. The vehicles and units suffered extensive damage.

"In a strange twist, Minardi actually returned to the scene Monday evening under the guise that he was checking on his girlfriend's property to see if it was OK," Rutledge said. "He claimed that he heard about the fire in the news, which wasn't true based on the fact that the fire department had not yet issued a media release about the incident."

The facility’s surveillance video also showed Minardi's vehicle on the property on the day of the fire, Rutledge said. Minardi was arrested at his home late Tuesday afternoon. He’s being held at Gwinnett County Detention Center on two charges of second-degree arson, two charges of second-degree criminal damage, entering an auto, and possessing a tool for the commission of a crime.

Buford Superior Self Storage is a part of Carpenter Storage LLC, which operates three facilities in Acworth, Alpharetta and Buford, Ga. The sites offer 24-hour access, vehicle parking and a retail store that sells moving and packing supplies.

When it comes to building self-storage, most owners tend to focus on the tasks they most enjoy, whether they relate to site selection, financing, design or operation. This is normal, but the construction phase of the project can’t be overlooked.

Hiring the right general contractor (GC) is an important step in the development process. There will always be issues that need to be resolved during construction, and the owner should be involved in the resolution of each. A qualified self-storage GC will help you avoid problems and enjoy financial success once the project is complete. Here’s how best to choose and collaborate with this key business partner.

Experience Is Key

The GC you hire must have experience in building self-storage. This is my No. 1 rule. You’ll allow this person to have substantial control over all aspects of your project, from start to finish. He’ll be responsible for the entire job, including the hire of all subcontractors and their ensuing levels of performance and quality.

Most GCs I’ve interviewed, whether for a small addition or a new build, claim they can handle a self-storage job because the buildings are lightly loaded and construction is relatively simple. However, a storage project is a slightly different animal. Our buildings have become more complex over the years. They contain unique elements that require specialization. A GC with little or no industry experience may be a good contractor, just not a good self-storage contractor.

The subcontractor tasks are generally simple to complete, but a GC who’s unfamiliar with self-storage may make too many assumptions about the use and, hence, underperform. In other words, he may not pay proper attention to the grading, soil compaction, concrete placement and strength, building materials and erection, paving quality, access-control installation and other ancillary work such as electric, HVAC, landscaping and lighting. This is why you should always hire a GC who has extensive industry experience.

Vetting Your Candidates

Once you’ve narrowed your choice to a small list of GCs with self-storage knowledge, you need to look at their licensing, financial stability and customer referrals. You need to know your GC is appropriately licensed to do business in the state where you’ll be building. You’ll normally be able to check this online with the state agency that oversees contractors. You may also check to see if any complaints or disputes have been filed against each candidate.

Ask every prospective GC for several financial references. These should include a primary bank as well as suppliers. Then follow up and verify.

A quick word here about bonding: I normally just check to see if the GC has the ability to be bonded by a reputable insurance company. Actual bonding is only occasionally necessary; however, it’s a major red flag if a contractor doesn’t have a solid financial track record or is unable to secure a bond.

The final vetting process involves customer referrals. Every candidate should provide several references from prior self-storage clients. Again, follow up and make sure the firm does quality work, on time and within budget.

Dealing With Conflicts

Once you’ve properly vetted and selected an experienced GC, you’ll sign a contract and related documents to help define and control the relationship between you. I’m normally comfortable using the American Institute of Architects contract and related forms because they’re detailed in scope and define the responsibilities of each party. Of course, you may opt to have your attorney draft a construction contract for you, depending on the project’s level of complexity.

As part of the contract, the GC should provide a project estimate, a detailed schedule of values for the work, and a Gantt chart showing when each task will be performed. Hopefully, the construction process flows smoothly from start to finish.

However, conflicts can arise. These can be due to something unexpected that necessitates a change order, such as poor soil conditions, or the perceived quality or timeliness of some aspect of the work. In my experience, the contract is important in working through these struggles, but the GC’s reputation for fairness and honesty is paramount. You should be able to discuss solutions with him for any issues that arise during construction. It’s important for both sides to be reasonable and have some room for give and take in any dispute.

If a direct discussion doesn’t resolve the issue, your contract should provide for arbitration or some other legal remedy. If the situation deteriorates to litigation, you and your GC will both lose. The legal system is simply too costly. The only parties in a construction lawsuit who win are, in fact, the attorneys. It’ll cost you many thousands of dollars before anything is resolved and your storage development is complete. No progress will be made on your project while litigation is ongoing! Try hard to resolve any disputes before you get to this point.

Final Thoughts

In summary, hire a general contractor who has experience in building self-storage facilities. Vet his licensing, financial ability and direct referrals. Use a trusted, legally binding contract that details the project costs, scope of work, schedule of values and timeline for completion. Finally and perhaps most important, hire someone who stands behind his work and has a reputation for fairness and honesty.

Following this advice will help you avoid expensive and perhaps unnecessary legal issues if a conflict arises during the construction process. It’ll also allow you to have a financially rewarding experience during development.

Jeffrey Turnbull is president of Kodiak Property Management Corp. He’s been involved in the self-storage business as a developer, operator and owner for more than 20 years. He owns three stores in Charlotte, N.C., and is currently developing a fourth in the city. He’s also a licensed attorney in North Carolina, a licensed real estate broker in North and South Carolina, and a past president of the North Carolina Self Storage Association. To reach him, e-mail turnbull1031@aol.com.

By Lauren Nicholson

Like any brick-and-mortar business, a self-storage facility is vulnerable to property damage. Whether unforeseen events are caused by natural or man-made forces, it’s important your business is protected through a quality insurance policy.

Commercial-property insurance coverage protects your owned property and everything contained within. Most policies will cover you on a “replacement-cost” basis up to a stated limit. This includes the building contents such as office furniture and equipment, computers, security monitors, and retail inventory. Replacement-cost coverage is preferred because it doesn’t factor in depreciation over time. If there’s a claim, the policy would reimburse you for the cost to replace the building or items at today’s cost.

Additional coverages that should be listed on the property portion of your business insurance policy are equipment breakdown and utility services. Equipment breakdown is designed to protect you against damages resulting from the electrical or mechanical breakdown of owned systems or equipment. It’s essential, especially if your facility has a climate-control or sprinkler system, or a boiler.

Coverage for utility services is also vital, particularly if your facility is in a severe weather region. Note: There are limits on the circumstances in which insurance will pay for loss due to power outage, so you must have coverage for off-premises power failure.

Business Interruption

If you experience a tangible property loss, your self-storage facility may be affected in other ways. For example, damage to a main building could cause a full or partial closure of the business. For this reason, it’s imperative to have business-income or business-interruption insurance. The coverage should be at sufficient limits in accordance with your gross revenue, so you’re covered for the cost to relocate the office if necessary and operate the business as usual. It’s vital for employee remuneration and to receive reimbursement for lost revenue during the inoperable period.

This coverage typically has a maximum timeframe, such as 12 months, as well as a set time deductible. For example, it may not kick in until 72 hours have passed.

If this coverage is listed on your policy as “ALS” (actual loss sustained), you have the most comprehensive coverage, since it’s not based on an established limit. Rather, it’s designed to indemnify you for the actual lost revenue resulting from the claim.

Prevention Is Key

Identifying potential hazards before a tangible property loss occurs is key to prevention. Here are some of the most common causes of building-damage claims and how to avoid them:

Electrical fires. Inspect facility wiring seasonally. Keep an eye out for any wear and tear, especially chewing by animals that might have entered the premises. Have an electrician conduct a walk-through of each building during normal business hours to ensure all is satisfactory at normal electricity-usage levels.

Fire-safety equipment should also be placed on a regular inspection-service agreement. Fire alarms should be connected to a central station and battery backup. At day’s end, unplug any office appliances that don’t need to be on overnight.

Burglary, theft, vandalism and arson. Recommended safeguards for mitigating these types of claims include a quality perimeter fence and a comprehensive video-surveillance system. Cameras should cover all key areas of the property including the parking area and facility entrance. Lighting is another great deterrent.

Display advisory signs about your security measures to discourage trespassers. In addition, consider a burglar alarm that will automatically notify authorities if a security breach occurs. There are several companies that offer monitoring services for a monthly or annual fee.

Weather. Mother Nature is a force to be reckoned with, and we can’t stop her. However, there are steps you can take to minimize potential building damage.

First, ensure your roof is impact-resistant and coated, so damage from hail is kept to a minimum. Have a certified roofing contractor write an analysis for the best design if you’re in a hail-prone zone. If your facility is in a region where high winds are common, be aware of any roof areas that are lifting so you can repair them before a storm potentially tears off a greater portion. Also, trim any overhanging limbs and scope the land for any dead trees that could easily come down in high winds and damage your buildings.

If a property-damage incident occurs at your site, report it to your insurance agent immediately. If possible, take photos of the impairment. Record the date and time of the incident, and note any parties that may have been involved. Finally, keep your agent in the loop if anything changes. The sooner you file a claim, the quicker an adjuster can be assigned and settlements can be made to reimburse you for damages.

Lauren Nicholson is an account executive with Storage Insurance Brokers, which offers an insurance program designed specifically for the unique needs of the self-storage industry. Based in the company’s Brewster, N.Y., office, she’s licensed to sell accident, commercial, health and life insurance. For more information, call 866.793.9999; visit www.storageinsurancebrokers.com.

Real estate development firm Foulger-Pratt intends to build a five-story self-storage facility in the Eckington neighborhood of Washington, D.C. The company is under contract to purchase a narrow, 0.85-acre lot at 72 Florida Ave. N.E., with plans to replace the former Herson Glass building with a 144,067-square-foot storage project. Though the facility can be built as high as 148,540 square feet by right, the developer must still undergo a large-tract review because the project’s gross floor area exceeds 50,000 square feet, according to the source.

The storage facility would include a large mural on the exterior wall facing Florida Avenue. The site, wedged between two properties owned by XM Satellite Radio, is near several hotel, residential and retail projects that are either in the planning phase or under construction. The neighborhood development boom includes a bevy of small, multi-family residential units, the source reported.

Though the glass company closed two years ago, the property has been owned by the Herson Family for nearly 90 years. The existing single-story structure is rented by development firm The Bush Cos., which is using it as a leasing center for a 182-unit Lexicon condominium complex it’s building nearby.

Foulger-Pratt is also developing a mixed-use property including residential and retail space in Eckington. Founded in 1963, the company specializes in mixed-use, transit-oriented projects throughout the Washington, D.C., metro area, according to its website. It has developed more than 15 million square feet of commercial office, multi-family residential and retail space.

Dahn Corp., which operates 38 self-storage facilities under the Mini U Storage brand name, has acquired a AAAA Self Storage facility in Virginia Beach, Va., from Wyoming Associates LLC. Built in 2004 on more than 5 acres, the property comprises 57,275 net rentable square feet in 379 units, 147 of which are climate-controlled, according to a press release from SkyView Advisors, the investment-sales and advisory firm that represented the seller in the deal. The facility’s units range from 25 to 800 square feet. It also has one rentable parking space.

“This property is a well-located, stabilized storage asset, which attracted numerous regional and national buyers,” said Ryan Clark, director of investment sales for SkyView, which specializes in self-storage acquisition, development, facility expansion and renovation, refinancing, and sales. Based in Tampa, the firm also has offices in Cleveland and Milwaukee.

AAAA has five facilities in Virginia Beach, according to its website. The brand is operated through The Nicholson Cos. and affiliate AAAA Self Storage Management Group. The AAAA portfolio of 51 owned and managed properties spans fives states and comprises 3.8 million net rentable square feet.

Based in Irvine, Calif., Dahn Corp. develops and manages self-storage real estate investments through its Dahn America360 LLC division. The company and its affiliates have acquired, developed or sponsored more than 6.5 million square feet of storage under the Mini U Storage brand name. It currently owns 38 facilities comprising nearly 2.6 million net rentable square feet.

Johnson Development Associates Inc. (JDA), a real estate developer with interests in self-storage, intends to build a storage facility as part of a mixed-use development planned for Atlanta. The five-story structure at 1299 Northside Drive would comprise 112,448 square feet in 875 units. The $6.75 million project would be within the Northside & 17th development, which includes a Chipotle eatery and Kroger grocery store, according to the source.

The mixed-use development is planned for the intersection of 17th Street and Northside Drive in the city’s West Midtown area. "The facility will be located at one of Atlanta’s most prominent, in-town intersections, within walking distance of Atlantic Station,” JDA posted on its website. “It sits within a mixed-use development anchored by a new Kroger Marketplace that is expected to deliver first quarter of 2018."

The self-storage facility would be managed by real estate investment trust Extra Space Storage Inc.

JDA announced last year its intent to expand its self-storage division, with 60 properties in various stages of development in its pipeline. In May, the company signed a general contractor for four Florida storage projects comprising more than 335,000 square feet in 2,753 units. All of the company’s new storage assets will be third-party managed by either CubeSmart or Extra Space.

Based in Spartanburg, S.C., JDA owns an investment portfolio of commercial and industrial properties including self-storage facilities, multi-family rental communities and single-tenant industrial space. It has developed more than 6,500 luxury apartments since 1996, while its industrial projects comprise 20 million square feet of commercial space.

AGF Manufacturing Inc., which specializes in fire-sprinkler products and components, has launched a new line of air-venting valves called PURGEnVENT, which can be used in self-storage facility sprinkler systems and other applications. The valves are designed to remove excess air from sprinkler pipes to reduce corrosion, which can cause systems to fail during a fire.

Corrosion can occur when oxygen becomes trapped within a pipe and interacts with water or moisture. AGF valves are designed to purge and vent the trapped air. The company developed the line to meet new venting requirements put in place last year by the National Fire Protection Association.

The line includes three models and offers automatic and manual units, according to a company press release.

• Model 7910MAV is a manual air-venting valve that uses a half-inch ball with an integral strainer and ball check to allow for venting while the system is filling.
• Model 7900AAV is an automatic air-venting valve that uses a 1-inch ball with an integral-isolation valve, strainer, purge valve and automatic air vent to allow rapid purging of air while the system is filling. Automatic venting occurs once the system is operational, according to the release.
• Model M7950ILV is an inline air-venting valve developed for systems with location restrictions. The valve uses an air/water separation chamber with an air scoop to separate air from water during filling and testing. The chamber is designed to allow water to enter the chamber, expand momentarily, separate from the air, move into the venting assembly and be released.

AGF specializes in the design and manufacture of inspector's test-and-drain valves, auxiliary drains, corrosion monitors, air-venting valves and accessories for the fire-sprinkler industry.