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MT AIRY, MD-United Stor-All, an owner operator of self-storage facilities, has picked up a nine-asset portfolio from a limited private partnership as part of an equity partnership buy-out. The buyer funded the deal with a $77.25-million loan.
The 601,901-sf portfolio has properties in Florida, New Jersey, New York, Pennsylvania and Virginia. Buchanan Storage Capital, a subsidiary of real estate investment bank Buchanan Street Partners in Newport Beach, CA, arranged the financing for United Stor-All, which was in the market for a five-year, interest-only vehicle with a fixed rate.
Jim Davies, a principal with Buchanan Storage Capital, tells GlobeSt.com that more than 20 capital market sources were approached, but only two were willing to provide a structure that could meet United Stor-All's requirements. The partnership buy-out was ultimately financed by a non-recourse financing underwritten to less than a breakeven debt coverage ratio and provided interest-only, fixed-rate terms with prepayment flexibility, Davies says. "This is a type of custom financing that is only available for a larger owner operating with the kind of track record that United Stor-All has," he adds.
United Stor-All currently owns more than 22 self-storage properties and manages more than 30 nationwide. Davies says the company is in an aggressive expansion mode right now, with plans to acquire numerous assets and develop new properties over the next few years. He says the nine properties are class A assets that were developed or acquired over roughly a five-year period by the partnership.
Buchanan Storage Capital plans to replicate the structured financing--unique for the asset class in Davies' opinion--for other self-storage operators. Davies says reports the firm has just closed a multiple-property financing this week for a self-storage company in California. "We are also in the process of financing two other portfolios in the Midwest and northeast with the same basic structure," he adds.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
