Brian Somoza is drawing on his previous job at Public Storage in his new role at commercial real estate powerhouse JLL.
Somoza recently joined JLL as a managing director focusing on the sale and acquisition of self-storage properties around the U.S. In JLL’s Los Angeles office, Somoza is working alongside Managing Director Steve Mellon to boost the firm’s self-storage offerings.
In 2013, JLL closed $260 million worth of self-storage real estate deals — 50 facilities in 16 states. So far in 2014, the company has closed $65 million worth of self-storage deals (19 facilities in eight states).
Somoza has 10 years of experience in commercial real estate. Most recently, he spent three years as an acquisitions manager at Glendale, CA-based Public Storage, the country’s largest self-storage operator. In 2013, the REIT bought 121 facilities for $1.16 billion. During his career, Somoza has been involved in $1.5 billion worth of self-storage acquisitions and development.
Somoza talked with The SpareFoot Storage Beat about his transition from Public Storage to JLL and about his outlook on the self-storage industry.
Why did you decide to make the move to JLL?
It was a broader opportunity to share my knowledge and experience with the industry on all levels. Partnering with Steve Mellon, we do work nationally, and I do have that experience nationally to help out both the private and institutional property owners.
What do you bring to the table with your experience at Public Storage?
It’s also more of an advisory role. I have the inside track of really what the REITs are looking for, specifically the underwriting and specifically the real estate itself — that was my job with the REIT. So I can help owners with insight into that. I can also help them in their overall exit strategy.
Why is self-storage such a hot segment for investors?
It got a lot of attention coming out of the last recession. It performed better than a lot of other industries and asset classes.
Where’s the self-storage market at now?
There’s a lot of demand for this space, depending on the market itself. There’s a lack of product out there, and there’s opportunity on the development side and on the acquisition side.
Which markets are in highest demand?
It’s really the core markets where you’re seeing the most competitive pricing, but you’re still seeing demand in the tertiary markets as well. If there’s density and population, you’re going to see properties doing a lot better.
What types of investors are looking for self-storage properties?
You’re seeing new equity groups entering the market. You’re seeing the REITs being very competitive. You’re even seeing private investors being competitive. So again, it’s a great time to add more scale to the portfolio, and it’s a great time also to be a seller.
Do you foresee any large portfolios coming to the market?
Big portfolios are tough; we’re seeing a few. We’re seeing some of the midsize operators looking at disposing of a few assets, and you also have the “onesies and twosies” of the industry that are either in the core or tertiary markets that I assume will be active in the next 12 to 24 months.
Any current deals that you can discuss?
I can tell you that we’ll be very active in the third and fourth quarter.
Will self-storage remain hot through the year and into 2015?
Yes. Unless there’s something out of the ordinary that happens, a large event that impacts the country.
What are your goals for your first year in this new position?
Helping clients, depending on what their goals are. I break out the categories into acquisitions, dispositions, development and operations, and I have experience in all four categories.
What are you looking forward to most in this new role?
Working with everyone within the industry. It’s really helping them on the advisory side and just sharing my experience of being with the largest operator in the country.