April 15, 2015 | Inside Self Storage
Elite Stor Capital Partners LLC, an equity investor focused on the self-storage industry, is acquiring 17 self-storage facilities in Kentucky and another six in Ohio for $35 million from America’s Storage/Storage Rentals of America, a father/son real estate partnership created in 1995. The portfolio includes 731,875 rentable square feet of storage space in 5,825 units. The properties were about 92 percent occupied at the time of sale, according to a press release from HFF (Holliday Fenoglio Fowler LP), which represented the seller in the transaction.
“The quality of the assets within the portfolio and the economy of scale is what attracted Elite Stor Capital Partners to the deal,” said HFF Director Barbara Guffey. “The transaction aligns with its strategic growth plan and its largest portfolio acquisition to date in the self-storage space.”
Facility amenities include climate control, electronic gate access, onsite management, vehicle parking and video cameras. Elite Stor plans to institute new management and upgrade the properties, adding modern technology and other features, according to a press release.
"Over the last 12 months, our company has increased its portfolio investments from five properties to 35 properties, and this transaction was critical to our company's continuing growth plan,” said Elite Stor CEO Benjamin Macfarland.
Elite Stor received a $26.2 million commercial mortgage-backed securities (CMBS) loan to make the purchase. Terms of the 10-year loan include a 9 percent debt yield, 75 percent loan-to-value, a spread of 205 basis points over 10-year swaps, and three years of interest-only payments followed by a 30-year amortization schedule, according to the release. The financing was complete in 47 days.
Funding was provided by New York-based Greystone, a real estate lending, investment and advisory firm. Greg Krafcik, the firm’s managing director, was the loan originator. It was the company’s first loan transaction in the self-storage industry, the release reported.
"The appetite for CMBS is ripe for a number of asset classes, so we will likely be seeing an increase in this type of loan execution throughout the year,” said Rob Russell, head of production for Greystone's CMBS team.
Greystone is a financial-services and private-investment group whose original core business is multi-family real estate lending. Over the years, the company has added related business lines including the acquisition, development, and management of multi-family housing. With offices nationwide, it’s active in healthcare, mortgage finance and real estate.
Elite Stor is a real estate investment company focused on the acquisition of self-storage properties as well as direct-equity investments with developers and operators. It’s an affiliate of Calidus Holdings LLC.
America’s Storage/Storage Rentals of America is headquartered in Danville, Ky. The company’s facilities include features such as drive-up phone centers and customer-service windows. The father and son who own the business have a background in customer service and marketing. They’ve developed, owned and operated the entire enterprise in-house, according to the HFF press release.
HFF and HFF Securities LP are owned by HFF Inc. The firm operates out of 22 offices nationwide.