LOS ANGELES—Brian Somoza has joined JLL as managing director to focus on the nationwide sales and acquisitions of self-storage properties. Work alongside managing director Steve Mellon, Somoza will utilize his 10 years of experience to broaden the firm's self-storage facility offerings. With the self-storage sector whirling at the moment, it is no surprise that JLL is looking to boost its self-storage team. We sat down with Somoza to discuss his goals in the new position and explain why investors are so bullish on the self-storage market.

GlobeSt.com: We are hearing so much about the self-storage market lately. Why has activity and interest picked up in this sector?

Brian Somoza: There's nothing sexy about the self-storage industry, however, it has proven to absorb economic fluctuations, maintaining value during good and challenging times. Capitalization rates within the industry have dropped dramatically in the past two years, which has resulted in consolidation among some of the top privately owned portfolios. Based on risk-adjusted returns and consumer demand, self-storage competes and usually outperforms most other asset classes.

GlobeSt.com: What of some of the major trends in the Los Angeles/Southern California self-storage market?

Somoza: Nationally, investors are concentrating their efforts in the core markets. Institutional and private capital is competing on these properties driving capitalization rates lower and property values higher. Some private and institutional capital have already taken advantage of the current climate and sold existing portfolios. Impressed with the performance and returns, these same sellers are redeploying their capital back into storage thus creating more competition within the marketplace. 

GlobeSt.com: Where in Los Angeles/Southern California are investors finding the best opportunities for self-storage investments?

Somoza: Nationally, there's opportunity in the core and tertiary markets for a well-located and well-built property. Development has returned in the industry, although difficult and time consuming, it's a real opportunity for patient money. An owner/investor that unloads property today and deploys it back in development of self-storage properties is truly taking advantage of market conditions. 

GlobeSt.com: You recently joined JLL as managing director, specializing in self-storage sales. What are your goals in this new position?

Somoza: Steve Mellon and I specialize in self-storage asset sales, acquisition and advisory on a national level. We are working together to strategically broaden the firm's offerings of self-storage sales and provide institutional quality advisory to owners/investors in the core and tertiary markets. My domestic and international experience in the self-storage sector is all encompassing, and I look forward to sharing that with the industry. When the time comes to sell a self-storage property, the question shouldn't be “should I sell to an institution or private party?" The question should be “how do I maximize value when selling to an institution or private party?"

GlobeSt.com: What types of investors are looking for self-storage properties?  Why?

Somoza: Based on market performance and risk-adjusted returns, self-storage is advantageous for most “smart” money; however, the challenge becomes how quickly and how much capital can be deployed in the sector. Limited existing acquisition and development opportunities can sometimes frustrate investors looking to deploy capital in the sector, however we haven't seen this negatively affect the industry as a whole.