Public Storage Inc., a self-storage real estate investment trust (REIT), opened a new facility this week in Denver, its 50^th in the region. The property at 10298 E. 45th Ave. is in the Stapleton Business Center, part of Denver’s largest neighborhood. It’s just minutes from the center of downtown on land that used to be part of the city’s only airport, according to a press release.

Just off the Interstate 70 freeway, the facility will serve residents of the 3,500 homes and 480 apartments already occupied or under construction in the area, the release stated. It’s on 5 acres that were once part of a larger redevelopment effort after Stapleton International Airport closed in 1995. The property is also near the City of Aurora and other established Denver neighborhoods that include business parks and corporate warehouses.

Public Storage recently released its financial statement for the quarter that ended June 30, 2015. As part of the release, the company reported it acquired four self-storage facilities comprising 300,000 square feet for $39.9 million and a lease buyout for $15.6 million during the quarter. One of the assets is in California and three are in Texas. The REIT is under contract to acquire nine facilities (three in Colorado and six in Florida) for $97 million. It also completed two new developments and various expansion projects that added 200,000 net rentable square feet to its portfolio for $27.9 million.

Based in Glendale, Calif., Public Storage has interests in 2,262 self-storage facilities in 38 states, with approximately 147 million net rentable square feet. Operating under the Shurgard brand name, the company also has 216 facilities in seven European countries, with approximately 11 million net rentable square feet.

Real estate firm Nelson Legacy Group held a ribbon-cutting ceremony on Aug. 7 to celebrate the grand opening of its first self-storage facility, Red Way Self-Storage, in Redmond, Wash. The event was attended by Nelson Legacy representatives as well as friends, family and community members, according to the source.

The four-story property at 18024 Redmond Way is part of the East Redmond Plaza, which includes retailers Firestone, Pennzoil and Sherman Williams. The facility offers 578 climate-controlled units and incorporates energy-saving features, the source reported. Property amenities include covered loading areas, individual door alarms, keypad access, video cameras, and a retail center offering packing and moving supplies. Red Way will also offer U-Haul truck rental.

Family-owned since the early 1950s, Nelson Legacy Group owns and operates retail and office properties in Kirkland, Redmond and eastern Washington. It conducts its own acquisitions, development and leasing, and Kennedy Wilson Properties Northwest Ltd. oversees the company’s property management.

Jernigan Capital Inc., a merchant bank and advisory firm serving the self-storage industry, will consolidate its offices and relocate its headquarters from Miami to Memphis, Tenn., effective Aug. 17. The move will include the addition of accounting, business-development, legal and loan-administration personnel, and requires the closing of the company’s offices in Cleveland and Miami, according to a company press release.

The company expects to complete the move to International Tower II, 6410 Poplar Ave., by the end of the third quarter. It will incur a one-time charge of about $275,000 related to the cost of the consolidation, including benefits and severance packages paid to those losing their jobs and lease-termination fees, the release said.

Company chairman and CEO Dean Jernigan has deep ties to Memphis, including being founder of AutoZone Park and the Memphis Redbirds Baseball Foundation with his wife, Kristi, according to the source. AutoZone Park is home to the Memphis Redbirds minor-league baseball team. In 2014, the St. Louis Cardinals acquired the Redbirds from the foundation, and Memphis officials took control of the stadium, according to Ballpark Digest, a website dedicated to sports-venue information.

Jernigan Capital is a commercial real estate finance company that provides financing to private developers, operators and owners of self-storage facilities. The company offers financing for acquisition, ground-up construction, major redevelopment or refinancing. The firm intends to be taxed as a real estate investment trust and is externally managed by JCap Advisors LLC.

Update 8/12/15 – Jernigan Capital has released its financial statement for the quarter that ended June 30, 2015, its first since completing a $120 million initial public offering (IPO) in March. During the second quarter, the company closed $74.5 million in loan commitments, including eight self-storage development loans for $68.5 million. It funded about $22.4 million of the aggregate committed loan principal, realizing $157,000 of interest income and $745,000 of loan-origination fees received during the quarter.

The company incurred operating expenses of approximately $1.35 million, including $520,000 in administrative and general expenses reimbursed to its external manager, JCap Advisors LLC. In addition, $150,400 in unreimbursed loan expenses, comprised primarily of legal fees, were incurred in structuring the company’s profit interests in its development loans. Jernigan Capital paid JCap Advisors $409,000 in management fees during the quarter.

As of June 30, the company had no outstanding debt, according to the report.

“Our first quarter as a public company was marked by strong acceptance by self-storage developers of our loan products, as evidenced by our exceptional loan pipeline growth,” said Dean Jernigan, chairman and CEO. “At quarter-end, we had committed approximately 67 percent of our IPO net proceeds, with approximately 92 percent of that capital committed to development loans that include 49.9 percent profit participations. Our loan pipeline is currently over 300 percent greater than at the time of our IPO and growing every day.”

The company currently expects to close on 16 loans worth approximately $118.6 million during the third quarter, including $78.6 million in development financing.

The lender paid an initial quarterly dividend of $0.35 per share on July 15 to stockholders of record on July 6.

In changes to management, Gregory W. Ward has resigned as chief financial officer (CFO), company secretary and secretary of JCap Advisors, effective Aug. 10. He has been replaced by William C. Drummond, who will serve as the company’s CFO, secretary and senior vice president. Drummond will also serve as CFO and senior vice president of JCap Advisors.

Drummond, 62, spent 37 years at Ernst & Young LLP as an audit partner, eventually becoming managing partner in the firm’s Memphis, Tenn., office. During his time at Ernst & Young, Drummond was audit partner to more than 15 public-company clients.

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7/23/15 – Jernigan Capital Inc., a merchant bank and advisory firm serving the self-storage industry, will release financial results for the three and six months that ended June 30 after the market closes on Aug. 11. An accompanying conference call will be held at 11 a.m. on Aug. 12.

The call, open to investors and other interested parties, will be accessible via phone and online. The dial-in number is 877.876.9177 for U.S. callers and 785.424.1666 for international callers. The passcode for the call is JCAPQ215. Participants may also access the call via live webcast by visiting investors.jernigancapital.com.

A replay of the call will be available from approximately 2 p.m. EDT on Aug. 12 through midnight on Aug. 27. The dial-in number for the replay is 800.695.2122 for U.S. callers and 402.530.9027 for international callers. The archive of the webcast will be available on the company’s website until Aug. 26.

Headquartered in Miami, Jernigan Capital is a commercial real estate finance company that provides financing to private developers, operators and owners of self-storage facilities. The company offers financing for acquisition, ground-up construction, major redevelopment or refinancing. Its senior staff has participated in more than $6 billion of self-storage transactions over the past 30 years, according to a press release. The firm intends to be taxed as a real estate investment trust and is externally managed by JCap Advisors LLC.

Update 8/11/15 – NSAT has released its financial statement for the quarter that ended June 30, 2015, showing gains in key areas including core funds from operations (FFO), net operating income (NOI) and occupancy.

The REIT reported core FFO per share of $0.22 during the second quarter, a 10 percent year-over-year increase. Its NOI was $20.8 million, a 100 percent gain compared to the $10.2 million it reported for the same period last year. Same-store NOI was $9.6 million, up 11.8 percent.

“We are very pleased with our results this quarter and year-to-date. Core FFO per share and same-store NOI increased both year-over-year and from last quarter,” said Arlen Nordhagen, CEO. “In addition, we reported strong improvement in our same-store operations, with excellent growth in net operating income, occupancies and rental rates. We believe our differentiated structure positions us to continue with very rapid, accretive growth. With the completion of our IPO [on April 28], we are very well-positioned to create long-term shareholder value."

Same-store revenue was $14.7 million, a 6.8 percent increase from a year ago, and driven by a gain of 270 basis points in average occupancy and a 3.6 percent bump in average annualized rental revenue per occupied square foot. Average occupancy was 88.3 percent as of June 30, up from 85.6 percent last year.

The company acquired 21 self-storage properties during the quarter for $93 million. The facilities comprise about 1.3 million rentable square feet in approximately 9,300 units.

Since the quarter ended, NSAT has acquired 12 additional properties for $94 million, adding 900,000 square feet and 6,800 units to its operating portfolio. It has agreements to purchase 18 more properties for $80 million and expects those deals to close during the fourth quarter.

On June 3, NSAT declared a dividend of 15 cents per common share, which was paid on July 15 to holders of record on June 30.

Storage Solutions, which has 29 locations in Arizona and Nevada, also joined the company during the quarter as the REIT’s sixth participating regional operator.

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7/16/15 – National Storage Affiliates Trust (NSAT), a Colorado-based real estate investment trust (REIT) specializing in self-storage, will release its financial results for the quarter and six months that ended June 30 after the market closes on Aug. 10. An accompanying conference call will be held at 1 p.m. ET on Aug. 11. Management will accept questions from registered financial analysts after prepared remarks. All other participants will have listen-only capability.

A live webcast of the conference call will be available from the company website at NationalStorageAffiliates.com. The dial-in numbers are 877.407.9711 for U.S. callers and 412.902.1014 for international callers.

After the live webcast, the call will remain available on the NSAT website for 30 days. The replay dial-in number is 877.660.6853 for domestic callers and 201.612.7415 for international callers. The conference number is 13613621.

The REIT recently declared a second-quarter dividend of $0.15 per common share and a quarterly distribution of $0.15 per operating-partnership (OP) unit.

NSAT is a self-administered, self-managed REIT with 246 self-storage facilities in 16 states comprising approximately 14 million net rentable square feet. The company is owned by its affiliate operators, who are contributing their interests in their self-storage assets over the next few years as their current mortgage debt matures.

A Compass Self-Storage LLC facility proposed for Jupiter, Fla., is facing opposition from some local residents. The development would include a three-story, 91,000-square-foot building to be constructed on a vacant 2-acre parcel of land in the community of Abacoa. Those opposed to the project claim the building would be too large for the lot and bring down property values, according to the source.

In a July 8 letter to the town, resident Mark Ciarfella said the facility, “could further erode the town’s tax base and remove the ability to attract more jobs to the area.”

The parcel is currently zoned for gas stations, fast-food restaurants and movie theaters. A zoning change to allow self-storage would protect the surrounding area from more intensive development, according to Compass.

The proposal is scheduled for a preliminary vote at an Aug. 18 town-council meeting. The self-storage project is one of several proposals under consideration for Abacoa. The council is also contemplating a plan for an 18-hole miniature-golf course, according to the source.

Compass Self Storage, a member of the Amsdell family of companies, has acquired and built several facilities this year. Most recently, it purchased a facility in Manville, N.J. The company has also recently opened facilities in Atlanta, Cincinnati, Illinois and Ohio.

Headquartered in Cleveland, the Amsdell Cos. draws its roots from the family-owned construction company founded in 1928. Since its inception, the company has been active in several billions of dollars of real estate ventures, with a primary focus on self-storage. It has owned and operated more than 500 storage centers under various trade names in more than 27 states. It currently owns and operates properties in Florida, Georgia, Kentucky, Michigan, Mississippi, New Jersey, Ohio, Pennsylvania, Tennessee and Texas.

21st Century Storage, a privately held self-storage operator with eight facilities in four states, has acquired Peoples Storage in Miami for $5.1 million. The property at 200 N.W. 79th St. is in the Little Haiti neighborhood. It comprises 663 units, including two retail bays and 33 parking spots for boat/RV storage, according to a press release by HFF (Holliday Fenoglio Fowler LP), which arranged the financing on behalf of the buyer.

The property was constructed in 1955 and renovated in 2004. The storage building comprises 45,759 square feet, according to a property listing on LoopNet, a real estate website. It has 257 feet of frontage along 79th Street. Nearly 200,000 people live within a 3-mile radius of the facility, which is close to Interstate 95 and North Miami Avenue. The buyer intends to upgrade the asset, HFF officials said.

Financing is a two-year, floating-rate senior loan with three 12-month extension options secured through Bedrock Capital Associates LLC in New York City. The HFF team that brokered the terms was comprised of Jose Carrazana, associate director, and Michael Klein, director.

“The success of this debt placement can be attributed to numerous factors including the [buyer’s] considerable operations and management experience, as well as strengthening economic fundamentals in self-storage nationally,” Carrazana said.

HFF and its affiliate, HFF Securities LP, are owned by HFF Inc. The firm operates out of 22 offices nationwide and specializes in advisory services, commercial-loan servicing, debt and equity placement, and investment and loan sales.

21st Century Storage has eight locations in California, Florida, Nevada, New Jersey and Pennsylvania.

Scott Self Storage is adding a solar-panel system to its facility in the Escott Business Park in Carlisle, Cumbria, England. Owner Steve Scott is aiming to be the first “carbon-plus” business in the area, and hopes the system will provide enough power to make the business self-sufficient, according to the source.

Scott’s decision to add solar panels to the property came after a meeting with Simon Dockeray, owner of SJD Electrical Services, through the Carlisle Business Network International (BNI), an international business-networking organization. The weekly networking meetings foster collaboration between Cumbrian businesses, the source reported.

“The solar panels are a big investment, so we wanted someone we can trust, and Simon has done a few jobs for us in the past,” said Scott, a 10-year BNI member.

Scott Self Storage has a second facility in Carlisle in the Kingstown Industrial Estate. In addition to self-storage services, the facilities offer commercial units, mobile storage, office space, and warehouse and bulk storage.

By Karen Hall

Records storage can be a wonderful opportunity to expand a self-storage facility’s core business. By offering this service, you fill a need in the community. It’s expensive for a business to store records in a commercial records-management warehouse; and keeping records in the company office or storage room eats up a lot of space. For these reasons, the option to stow records at a local self-storage facility is appealing.

However, it’s important to note the philosophy “build it and they will come” doesn’t apply to records storage. You must take assertive steps to get the word out to local businesses. They will come, but you must draw them in. While you may not experience overnight success, when deployed correctly, records storage can provide a steady stream of revenue, create long-term contracts and boost your facility’s income.  If you’d like to add this service to your self-storage operation, here are some things to consider.

Startup Costs

To determine your initial investment, consider these main components of records storage: staff training, unit shelving and advertising/promotion. The price you charge for records storage will be based on what your market will bear and the success of your marketing program. Research your potential customer base and check out the competition.

The question is whether your renters will pay a premium for the convenience of a storage unit properly equipped for business records. My experience says yes, people are willing to pay for convenience and appreciate services that save time and money.

By amortizing your investment and adding the cost to your rental base, it may take you one or more years to recoup your costs. However, during this “payback period,” you’ll gain income stability due to long-term contracts. You’ll also reap the benefit of internal growth—as your clients’ businesses grow, so does their need for additional space. Once a company makes the decision to move its records offsite, it’s made a long-term commitment. The lure of lower rental rates at another location isn’t all that appealing, as it’s often not worth the time and energy to move all those boxes.

To create a quicker return on your investment, you can bundle services into the monthly rate, creating a higher perceived value of the space being rented. There are many services for which a business client might be willing to pay, and it’s typical within the industry to gain up to 50 percent more revenue over the monthly storage rate for offerings such as:

• Transportation of bins, boxes and containers from an office to the storage facility
• Copying and shredding services
• Storage and retrieval of boxes and files
• Use of office machines and meeting rooms

The best part is the bundle rate is no longer a dollar amount that’s comparable to the rent of air space offered by a competitor.

‘Storage-Ready’ Rentals

A “storage-ready” unit is one that’s already outfitted with shelves for boxes of records. It’s created by installing shelves that fit the unit’s height, width and depth. An efficient layout provides for maximum box storage, required per-shelf weight capacity, air flow, adequate aisle width, and easy storage and retrieval.

You can create a sample of a storage-ready unit in one of your empty spaces (perhaps your least popular size). This will allow the customer to see the shelving layout, understand the benefits of clean and organized storage, and get a definitive answer on total box capacity.

Storage-ready units not only increase your monthly rental income, they promote long-term contracts. The commercial records-storage industry reports the average length of time files stay on shelving is 16 years. Businesses storing their records aren’t month-to-month renters. They’re in for the long term.

Some customers may not need a unit filled entirely with shelving. They may instead require a combination of storage products to accommodate collectibles, files, materials, product inventory and tools. To accommodate individual needs, you can sell archive boxes, assorted storage bins and shelving units. Put a display of these offerings in your office retail center.

Advertising

Business customers may already be renting space at your self-storage facility. These are prime candidates. Each person who calls your facility, walks through the front door, or visits your website or social media platforms should know you offer records storage and other business services! Describe the benefits of offsite records storage and provide details of the services you offer. If your facility is close to business or industrial parks, office buildings or retail stores, you’re surrounded by potential customers.

As with any successful advertising campaign, the consistency of the message is crucial. It might be “We offer records storage and business services” or “We are your records-storage specialist.”

Add the new offering to your company website. We live in a Web-search world, so spread the word to your largest audience. Another inexpensive way to advertise your records storage is to add eye-catching, professionally designed banners to your property that capture the attention of your community. Continue the promotion at your front desk with posters and fliers. If you offer storage-ready units, include photos of them on your website and in your brochures. A monthly mailing or flier delivery is a great reminder that your facility specializes in records storage.

If you’re looking for a creative way to generate additional revenue at your self-storage facility, consider the many benefits of records storage.

Karen Hall is the owner of Archive Storage Solutions, a Newport Beach, Calif.-based company with strategically located warehouse-distribution centers that allow delivery to cities nationwide. For more information, call 877.673.2505; e-mail info@archivestoragesolutions.com; visit www.archivestoragesolutions.com.