A round of recent refinance loans show continued favorable conditions for the self-storage sector heading into 2016.
Chicago-based BSC group recently structured and negotiated a $31 million refinancing loan secured by Keepers Self Storage in New York City.
Principal Shawn Hill said the loan tested the boundaries of metrics maintained by bond buyers and rating agencies.
“If there is a place to push on the conventional boundaries, Manhattan would certainly qualify,” Hill said, adding that there have been very few self-storage facilities in the borough that have been securitized as part of CMBS 2.0.
Raising the bar
The non-recourse CMBS loan was structured with a 10-year fixed interest rate and full term interest only payments. The loan was funded by a “large domestic, money-center bank.”
Keepers Self Storage, located at 444 E 10th Street in the East Village, offers more than 1,500 units and covers 63,000 rentable square feet.
“The full term interest only loan was underwritten aggressively from a cash flow perspective, allowing the borrower to execute on their debt recapitalization plan,” said Devin Huber, also a principal at BSC.
BSC closed 55 loans in the self-storage sector totaling more than $320 million during 2015, the company reported.
Other recent loan activity
Meanwhile on the West Coast, Irvine, CA-based Talonvest Capital recently negotiated more than $45 million worth of loans for four different owners.
A-1 Self Storage refinanced $25.57 million on a six-property portfolio concentrated in the San Diego area through a life insurance company. With the 475,000-square-foot portfolio maintaining an occupancy rate of 91 percent, the owner was able to secure six individual loans with 10 and 12 year fixed interest rates amortized for 30 years. Interest rates were in the low three percent range.
Talonvest also negotiated a $6.6 million conduit loan for the Tierra Corporation secured by two facilities in Southern California, an $8 million refinance of two Inland Empire facilities for Southwest Storage, and a $5.5 million refinance of a facility in Fort Collins, CO for Mountain Pacific Properties.
Loans of all sizes
In other lending news, Live Oak Bank negotiated several loans recently for self-storage owners. The company recently closed a $4.9 million startup loan for a facility in Spokane, WA, a $2.4 million acquisition and expansion loan for a facility in Providence, RI and a $1.5 million equipment financing for a facility in Buda, TX.