Hi
Here is a short draft from our Program Guidelines when it comes to Self Storage.
You can contact me @ mike@guaranteedlendinggroup.com
Mike,
Self Storage Overview
Loan Types &
Amounts:
Acquisition, Development, or Refinance. Construction and mini-perm packages available.
Small Loan Program: $1MM - $3MM
Large Loan Program: $3MM - $15MM
Eligible Property
Locations:
Nationwide. Market areas with a stable current occupancy of competitive product. Rent
concessions will be underwritten cautiously and typically require higher coverage and reserves.
Occupancy: 85% minimum occupancy
Debt Service
Coverage:
1.35 x minimum
Loan-to-Value
Ratio:
Maximum 75% LTV
Loan Term: __5, 7, 10, and 15__years
Amortization: 25 years or less depending on age, quality of construction and market location.
Pricing: Pricing is based upon the quality of the real estate (A, B or C) project economics and borrower
suitability. Spreads range from 200 -325 basis points over the corresponding U.S. Treasury.
Time Frames: Term Sheets within 48 hours, Commitments within 10 days of submitting Pre-Qual package,
Closing within 60 days of commitment
Fees: Loan Fees: 0-2% of the loan amount
Good Faith Deposit: $7,500 at application
Deposit for Third Party Costs: $20,000.00 for Appraisal, engineering, environmental, legal, etc.
We are planning to expand our self storage facility in the near future. We have available about 2.5 acres of land to expand and build upon.
The price of land in this area has increased from what we paid - $80,000 per acre - to currently about $200,000 per acre in about 4 years.
StorageMaxx, the storage facility, is located just south of Miami.
Because of the high land value and the high demand for vehicle, boat and trailer and RV storage (we are located on the road to the Florida Keys) we are thinking of building a multi-story parking facility.
If anyone has suggestions or has done this before, I would like to hear about the company they used to build their project and their experience with multi-story parking. I am also interested in knowing from others with experience in the self storage industry, what other improvement options they would consider instead?
We are also considering a combination of additional self storage units plus the RV and vehicle multi-story parking.
Can’t help answer your questions, unfortunately. But as someone who has started looking into self storage, I’m curious as to what degree of competition you see down your way. It seems like in many cities in the West, self storage is getting overbuilt, and returns are hurting. That doesn’t sound like the case in S. Florida, judging by your post. I wonder why that is?
Posted by Joe C. (AR) on August 06, 2004 at 23:59:12:
My partner owns a small self storage facility in Arkansas. I was very involved in the evaluation and aquisition. The facility is located in a very well developed and older (in terms of growth)area of the city. There is little room and high entry cost to undeveloped land. Although many facilities are being built on the outskirts of the city it is unlikely that any more will be built in our immediate area.
Factors that drive our customer’s choice of facility are; 1:security, 2:convenience, 3:cost…in that order. Our security is as good as anyone else’s in the area, our prices are competitive, so that leaves convenience. We figure our market is a 3-4 mile radius of our location. Since there will be little future development in that radius, there is little chance of over building of storage units.
Units generally go in where land is cheap. It’s usually cheap because of over supply and limited demand. As land cost rises, higher and better uses are usually found.