Talonvest Arranges $112M Self Storage Loans

2340 Maritime Drive, Elk Grove. Image courtesy of Talonvest Talonvest has helped structure a total…

2340 Maritime Drive, Elk Grove. Image courtesy of Talonvest

Talonvest has helped structure a total of $111.5 million in permanent financing on behalf of several self storage clients. The firm has arranged four separate loans for a six-property portfolio and three additional facilities in Chicago, Texas and Illinois.

The William Warren Co. has closed on the largest financing deal, amounting to $60 million for a collection of six properties in California, Texas and Nevada. The seven-year loan has five years of interest only payments. The assets total 542,483 net rentable square feet and include a 73,128-square-foot facility at 2340 Maritime Drive in Elk Grove, Calif. The 2002-built property is operating under the company’s StorQuest brand. Storage spaces include climate-controlled units and range between 12 and 300 square feet.

A private investor received a $34 million refinance loan with 10 years of interest only payments. The financing was arranged for a 143,409-net-rentable-square-foot storage facility in Richmond, Calif. The property at 321 Canal Blvd. offers 1,114 non-climate-controlled units and 468 climate-controlled units. Storage spaces include 224 drive-up access units.

1864 Independence Drive, New Braunfels, Texas. Image courtesy of Talonvest

The Jenkins Organization obtained a 10-year refinancing of $10 million. The full-term, interest-only fixed-rate loan is for a facility at 1864 Independence Drive in New Braunfels, Texas. Built in 2017, the property offers 80,555 net rentable square feet across three two-story buildings. The facility has 584 units. Storage spaces include climate-controlled options and range between 25 and 300 square feet.

Chicago Capital Funds received a $7.5 million loan for a facility in Elmhurst, Ill. The 10-year non-recourse refinancing includes an interest only payment period. According to Yardi Matrix, the facility is a three-story building at 877 IL-83. The property offers both climate- and non-climate-controlled units ranging from 25 to 350 square feet and includes RV and boat parking spaces. The property operates under the U-Stor-It flag.

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A safe investment

Despite a decline for three consecutive months, self storage street rates remained stable through November, a recent Yardi Matrix report shows. The national average rent for 10×10 non-climate-controlled units was up 6.7 percent year-over-year, clocking in at $127. The figure was down $1 from the previous month. Meanwhile, rates for 10×10 climate-controlled units rose 8.2 percent year-over-year to $145, down $1 from the previous month.

Development activity has kept up with the pace of demand, despite the rising costs of construction materials. The November pipeline accounted for 8.8 percent of existing inventory, marking a month-over-month increase of 20 basis points.

Considering the ongoing shortage of construction materials, some big names in the sector prefer to grow their portfolios through asset acquisition, according to a recent article by The Wall Street Journal. The sector is also attracting investors looking to safeguard against inflation.

In November, a joint venture of Harrison Street and Reliant Real Estate Management LLC purchased a 26-property portfolio across six states. The acquisition was the largest portfolio transaction in Harrison Street’s history. The firm has invested a total of $2.3 billion in self storage properties to date.