Strategic Storage Trust Inc., a publicly registered, non-traded real estate investment trust (REIT), released its financial results for the quarter ended June 30. The company reported year-over-year same-store revenue and net operating income (NOI) increases of 8.8 percent and 15.7 percent, respectively, for the second quarter, compared to the same quarter in 2013. Same-store average occupancy increased 3.6 percent year over year to 86.5 percent.

"We are pleased with the Q2 results,” said H. Michael Schwartz, CEO. “Our top-line growth in same-store revenues and NOI has continued to increase and contributed to our [second] quarter with positive net income. Our increase in occupancy will afford us potential positive rental-rate growth. In addition, our integrated technology, enhanced revenue-management system, along with our next-generation marketing platform, has proven to provide incrementally positive results."

The company also decreased its property operating expenses as a percentage of revenue to 31.6 percent during the quarter from 35.9 percent compared to the same quarter in 2013.

For the first six months of 2014, Strategic Storage Trust posted an 8.2 percent increase in same-store revenue and a gain of 11.8 percent in NOI, compared to the first six months last year. Same-store average occupancy for the six months increased 3.3 percent year over year to 85 percent.

The company’s board of directors declared a third-quarter distribution of $0.001917808 per day per share on the outstanding shares of common stock. It’s equivalent to an annual distribution rate of 7 percent, assuming the share was purchased for $10, and approximately 6.5 percent, assuming the share was purchased for $10.79.

Launched in 2008, Strategic Storage Trust operates a portfolio of 126 self-storage facilities in 17 states and Canada. The properties comprise approximately 80,000 units and 10.5 million rentable square feet of storage space.

A proposed self-storage project stirred controversy in Conway, Ark., this week when neighboring business owners objected to the rezoning and special-use permit that are required for the development to move forward. The Conway Planning Commission sent the issue to the city council without a zoning recommendation, but voted to support the use permit if the council approves the rezoning.

Developer DT Real Estate wants to purchase a residential property at 2215 Dave Ward Drive and build a self-storage facility, which would require a use permit and rezoning the lot to an industrial designation. The current homeowner, Mona Heath, has lived on the property for many years and pleaded with the commission to support the project so she could sell her home, according to the source. The area was once surrounded by open green space but is now bordered by apartments and business developments, she said.

Brian Salter, the developer behind nearby retail center The Plazza at Centerstone, said the area had been rezoned in 2008 to support a mix of office and commercial businesses, but industrial zoning was not part of the plan, the source reported. Dave Smith of Smith Family Pharmacy argued that self-storage “just doesn’t fit.”

Project architect Bruce Jordan, president of Jordan Architects Inc., told the commission the self-storage facility would be “very upscale,” featuring glass at the front and plenty of landscaping in the back. He also argued the facility would have a low impact on neighboring businesses with a daily car count of about 50, as well as low demand for electricity, sewer and water.

Safeguard Self Storage, which operates more than 60 facilities throughout the eastern states, has added 195 drive-up units to its existing Palmetto Expressway facility in Miami. The new units, which opened for rental yesterday, were built on land adjacent to the existing property at 16701 Park Centre Blvd.

“South Florida is a terrific market for Safeguard and provides the company with the opportunity to add value to the Safeguard portfolio,” said CEO Allan Sweet. “This property is in a region where the company already owns and operates nine other stores and where two others are in the final stages of construction.”

This expansion was designed to meet a need in the market the company was not providing, said Ken Finlay, senior vice president of operations. “The new units will complement our product offerings in Miami, and enable customers who needed drive-up capability to get it at a very high quality.”

Founded in 1989 and headquartered in Atlanta, Safeguard Self operates 63 facilities in Florida, Illinois, Louisiana, New Jersey, New York and Pennsylvania. The company is owned and operated by Morgan Stanley’s Prime Property Fund.

Inside Self-Storage (ISS) has published a new online image gallery, "Big & Bold 2014: A Showcase of Self-Storage Facility Design Trends.” The free presentation provides viewers with a visual tour of new styles, architectural elements, color palettes, and ideas for facilities large and small. The images, provided by owners, developers and management companies, illustrate the next generation in memorable storage design.

The gallery can be viewed at www.insideselfstorage.com/galleries. The 2013 and 2012 design galleries, as well as other storage topics, can also be viewed through the same page.

For nearly 25 years, ISS has provided informational resources for the self-storage industry. Its educational offerings include ISS magazine, the annual ISS Expo, an extensive website, the ISS Store, and Self-Storage Talk, the industry’s largest online community.

 

By Charles Plunkett

Multi-story construction has been around for many years in the self-storage industry and has become a mature part of this business. That doesn’t mean things don’t change or there isn’t still more to learn. Following is a brief overview of the advantages and disadvantages to building vertically.

Rentable Square Footage

Multi-story development allows you to use a much smaller piece of property to achieve the desired square footage for your self-storage development. How efficient this is depends on a number of factors including:

• Building setback requirements
• Ingress/egress requirements
• Impervious coverage (how much of the natural surface you’re allowed to cover with impenetrable materials such as concrete)
• Maximum coverage ratios

Assuming setbacks and coverage are not an issue, you can essentially cover most of a site except for the entry drive, a fairly small tenant-parking area in the front, and an unloading area. This type of layout will also be dependent on fire-department requirements and whether safety personnel require access all the way around the building.

Since most if not all of the units in a multi-story building are typically climate-controlled, it’s important to remember this requires access hallways. In addition, you’ll have elevators and equipment rooms as well as stair towers. As a rule of thumb, 75 percent of the total floor area will be rentable space, with the balance being lost to these portions of the building. You’re building the gross square footage, but you’re only able to rent the net leasable area.

Building Codes

One of the more recent developments affecting multi-story construction is a change in building codes. There used to be several different codes, however, they were all merged into the International Building Code (IBC) several years ago. The latest version, 2012 IBC, has been adopted by most cities.

Under this code, if you build more than three stories in height, the entire supporting structure is required to be one-hour fire-rated, meaning the building structure can resist fire exposure for one hour. In the past, self-storage facilities have been built up to five stories high using light-gauge framing for the interior structural support. With this new code requirement, owners and developers have two options: frame the structural support out of heavy steel such as tube steel and beams, and then fireproof the structural support; or build the structure out of concrete. In either case, this results in significant increases to the construction budget.

Marketing Factors

One of the best things about multi-story construction is the building itself is like a giant sign. The facility’s name and amenities can be displayed on the building with large letters, making it visible at a great distance. Unless it’s prohibited by zoning or some other special requirement of the governing authority, most multi-story facilities will also feature large expanses of glass displaying roll-up storage doors in the upper levels. These doors can also be highlighted by lights at night, drawing the attention of passersby.

The design options for a multi-story building’s exterior are almost limitless. This type of construction offers the opportunity to add a variety of design elements such as color and materials to enhance curb appeal. You can even add eco-friendly elements.

Building a multi-story facility can be a rewarding option for self-storage owners and developers facing higher land costs, small lots or strict zoning. In addition, going vertical has a number of other advantages including the opportunity to be highly visible in a sea of buildings.

Charles Plunkett is founder, owner and CEO of San Antonio-based Capco Steel Inc., which supplies steel and erects metal buildings, including self-storage and boat/RV storage. The company provides design for projects of all sizes as well as engineered drawings, unit-mix layouts, hallway systems, roll-up doors and more. For more information, call 210.493.9992; visit www.capcosteel.com.

Integrated Security Corp., a designer, manufacturer and installer of security products, has released the wireless Hydra Asset Protection System for use in self-storage and other industries. The system is intended for outdoor security, ideal for property perimeters or for use around large assets, according to a company press release.

The Hydra sensor includes two independent sensing technologies: an accelerometer to detect movement and a passive infrared sensor to detect the body heat of a person near the fence or asset. Unless both are disturbed, no alarm is generated. This means wind alone will not cause an alarm, allowing Hydra to eliminate the biggest problem for fence-mounted systems, according to the release.

The wireless sensors allow for flexible placement around a facility’s entire perimeter or on individual assets, such as a storage container or vehicle. A wireless mesh network links sensors to each other and a control panel. There are no wires or conduit; each sensor is battery-powered.

Based in Novi, Mich., Integrated Security was founded in 1987. The company also manufactures the Infinity 2020, a fence-mounted, intrusion-detection system, as well as security supplies and services and Cias digital-microwave sensors.

 

NitNeil Partners, an Atlanta-based real estate development and investment firm specializing in self-storage, has broken ground on a three-story storage facility near the West End Historic District of Greenville, S.C. The facility will comprise 92,000 square feet in 638 storage units and serve residents, businesses and students near the city’s urban core, according to a company press release. The project is expected to be complete next spring.

"Greenville's transition from a mill town to a modern, innovative economic and cultural hub is a remarkable story," said Nitesh K. Sapra, principal. "The revitalization of the city's urban core has resulted in the emergence of entrepreneurs and an influx of in-town dwellers, but there is a lack of secure, convenient storage downtown. Our goal is to provide an amenity to support the dynamic business and lifestyle needs of the local community."

The building will be constructed at 401 Dunbar St., within walking distance of a new apartment complex and a planned mixed-use development. “Dunbar is a pretty transitional sort of corridor, and we think that there’s a lot of momentum where Dunbar intersects with Augusta [Street],” Sapra told the source. “We feel like it’s going to trigger further momentum along Dunbar.”

The Greenville project marks the company’s expansion into South Carolina and will be followed by two similar self-storage facilities in Charleston, S.C., according to the source. NitNeil Partners recently completed a similar project in downtown Chattanooga, Tenn.

NitNeil Partners is a regional investment firm that specializes in the acquisition, development and management of commercial real estate, including self-storage. The company’s self-storage portfolio comprises 800,000 square feet across five states.

Sno Gem Inc., a manufacturer of snow-retention products for self-storage and other industries, is celebrating its 20th anniversary. The company was launched in 1994 by the Smeja family, who were looking for a snow-guard product for their commercial sheet-metal and roofing business, Metalmaster Sheet Metal Inc. After doing some research, the family discovered there were few snow-guard manufacturers available to meet the increasing demand for snow-retention products.

“The roofing business was growing, and they were doing a large portion of the work in the Chicagoland area,” said James T. Carpenter, vice president of operations. “The business was consistently buying snow guards for its projects and, at one point, the Smeja family made the decision to design their own.”

The company started with an original polycarbonate snow-guard design featuring a 25-square-inch base. With such a large footprint, Snow Gem offered increased attachment strength, according to a company press release. The Smejas also released Snow Gem Junior, with a 12.5-square-inch bonding surface and narrower base. It was intended for metal-panel systems with intermediate ribs or corrugated metal panels commonly found in pre-engineered and post-frame buildings.

“The Smejas are an innovative and business-minded family,” Carpenter said. “Early profit was directly invested back into the company, and they consistently increased their marketing budgets by advertising in more trade publications and attending industry tradeshows. These efforts increased market awareness of all of the Sno Gem products for consumers, architects and contractors.”

Sno Gem ultimately developed snow-retention systems for slate, shingle and membrane roofing. Additional products include Sno Barricade, the company’s first bar snow-retention system for standing-seam metal-roofing applications. The iClad and Sno Blockade bar/fence systems, made of aircraft-grade aluminum extrusions, feature Snow Gem’s patented WaveLock Technology. The company recently introduced the PV Cube, a clamp-to-seam racking and mounting system for solar panels, which also uses WaveLock.

“We’re proud of the innovations Sno Gem has introduced into the industry over the past 20 years, and we’re looking forward to working with our customers to meet their needs in the future,” said Rock Smeja, a third-generation member of the family business and vice president of marketing. “We remain very hands-on within the day-to-day operations of Sno Gem to ensure we are always on the cutting-edge of not only snow retention but the overall industry as well.”

Based in McHenry, Ill., Snow Gem’s principals have leveraged more than 100 years of combined experience in architectural sheet metal and roofing to develop the company’s line of snow guards.

The Smeja family management team. From left: Michael V. Smeja, principal;
Rock M. Smeja, vice president of marketing; and Daniel F. Smeja, principal.