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Free Facility Valuation Get a free Broker’s Preliminary Opinion of Value by calling your Argus Broker today! See the January Market Monitor for more information and a directory of Argus Broker Affiliates. Will you be at the ISS Expo in Las Vegas? Arrange to meet with your Argus Broker during the Expo. Call your Argus Broker to set an appointment.
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Records Storage within Self Storage Made Easy
By Cary McGovern Self storage operators are looking for ways to maximize their profits and differentiate themselves from their competition, nothing does that better than records storage. So, the question is how can I make it easy to implement and simple to manage within my existing self storage operation. Let’s add one additional factor to the mix ... low entry cost.
Non-traditional records management is a strategy that uses your existing assets of people, facility and equipment along with two additional components; limited services and outsourced couriers. It consists of six simple services including billing, repeatable training, management oversight, pricing strategy and seven marketing options.
You can maximize your profits by renting air (cubic footage) and extending the term of the storage agreement from thirty days to permanent. Yield can be as high as 80 cents per cubic foot of storage on a price of 35 cents per cubic foot. Consider the possibilities and call 877-FILEMAN toll free for details.
Learn Non-Traditional Records Management at the Annual FileMan Seminar event. One day before the Inside Self-Storage Expo in Las Vegas.
Sunday, February 8th 1-5 p.m.
Seminar includes materials, FileMan product discounts and
two hours of individualized telephone consultation.
Call 877-FILEMAN
toll free for information.
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From
Many self-storage owners ask how they can capitalize on the current low fixed rate environment when their properties are still in the final stages of lease-up. The answer begins with the fact that many Commercial Mortgage Backed Securities ("CMBS") fixed rate lenders are desperate for product given the favorable returns this investment class provides CMBS investors. As a result, they are currently willing to relax their underwriting requirements for quality properties and offer long-term fixed rate financings today even though a facility may not yet have achieved full stabilization. Several lenders are underwriting the most current month of income on an annualized basis to size a loan if the property has enjoyed a strong lease-up rate. This is a major departure from traditional underwriting that analyzes the trailing 9-12 months of income & expenses. By underwriting to a 1-month annualized figure for income, it is possible to secure a 75% loan-to-stabilized-value financing today. Furthermore, lenders are not charging a premium in spread in these cases due to the competitive nature of the market. This provides the opportunity to capitalize on low fixed rates today at no additional cost, rather than take future interest rate risk by waiting until the property fully stabilizes. It is important to realize, however, that lenders will take 60 to 90 days to fund a loan and will expect that the property's income continues to increase during this timeframe. If a property is still 6 months or more from stabilization, some lenders may provide the option to obtain a loan leveraged at 75% of stabilized value by securing the “shortfall” of income with a letter of credit. By way of example, assume that a property qualifies for a loan of $4,000,000 in 6 months upon stabilization but only can support a loan of $3,500,000 today. In this case the lender may fund $4,000,000 today and require a $500,000 letter of credit that is released upon stabilization. This option makes it possible to secure a fully leveraged loan at today's rates rather than taking interest rate risk upon stabilization in the future. For more information or assistance contact Eric Snyder, Buchanan Storage Capital, at 1-800-675-1902 or via e-mail at eps@buchananstreet.com.
A new association is born: Illinois Mini Storage Association. The Illinois Mini Storage Association (IMSA) opened its doors the first of November 2003. This not-for-profit trade group was established to represent self storage facilities throughout Illinois with business services, education, legal oversight and legislative advocacy. IMSA is a re-birth of the former Illinois Self Storage Association. IMSA looks forward to networking with national and other state associations to the betterment and service of the self storage industry. Check our web site for further information: www.ilministorage.org.
Visit Argus at the ISS Expo Argus President, Mike McCune, will be presenting during the Expo. Mike's expertise in the self storage industry and his unique perspective make this a session not to be missed...
Overbuilding:
Tuesday, February 10th
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Alert on Self Storage is published by the Argus Self Storage Sales Network. Questions? Comments? Please contact Melanie Aaron at melanie@argus-realestate.com or call 1-800-55-STORE. |
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