Jerry Jones CPA
Wouldn’t it be nice to have a CPA that you deal directly with, that knows the Self Storage business, that works in all 50 states and is there for you when you need him?
In addition to being the best tax advisor I have had the pleasure of working with, Jerry is first and foremost a wonderful person. Building my first storage facility and being a rookie to the industry, I was nervous on what I could expect in my first year of development. With all of the ups and downs of this first year all I can say is I had absolutely no worries when it came to the the most important part of our business - the numbers. Jerry Jones took the time to answer every question or concern we had when going though this process. If you are in the storage business give yourself a leg up and apply Jerry’s experience and expertise of this expanding and ever changing industry. You will be thankful you did.
Bill Pederson
Lock it and Leave it storage

Self-Storage Research
Semi-annual Report Fourth Quarter 2012

Marcus & Millichap

Coastal Cities Lead Recovery, Secondary Markets Lagging

Demand for self-storage space will be sustained by an improving job market and the daunting eff ects from Hurricane Sandy. The catastrophic events unfolding from the hurricane created an estimated $20 billion to $30 billion in damage along the Eastern Seaboard. Typically after a natural disaster of this magnitude, demand for self-storage accelerates as homeowners store undamaged goods during the cleanup process, while contractors and local suppliers utilize commercial space. As such, operators with heavy exposure to the East Coast will see a sharp increase in business over the next six to 18 months. On a more positive note, with the economy on the mend, the nation has gained 1.3 million jobs this year, which enhanced consumer confi dence to a four-year high and boosted retail sales. Th is trend will persist through the holiday season as an additional 400,000 jobs will be created in the fi nal quarter. Technology-driven markets, including the Bay Area, Seattle, Los Angeles, New York City, and Boston, along with oil-rich regions in Texas and North Dakota, will realize a signifi cant portion of these gains. As residents relocate to these areas, many will enter the rental community and utilize storage units for excess items. Th is rise in demand, coupled with limited construction will support positive absorption across the nation this year.

As REITs and private-equity groups remain bullish on high-quality product, cap rates will stay compressed into next year, pushing some yield-seeking investors down the quality scale to capture higher returns. To satisfy investment objectives and grow portfolios, this pool of buyers needs to place liquidity into top-quality properties located in primary markets. Bidding will remain competitive for any new Class A listing, which will prompt most investors to pay cash to stave off the competition. With cap rates for these properties already treading near the sub-7 percent range, buyers looking to maximize returns may target stabilized assets in one-off markets, which can generate up to a 150-basis point premium. Meanwhile, smaller, local and regional investors priced out of the top-tier sector, will purchase Class B/C assets with proven cash fl ows in secondary and tertiary markets. Qualifi ed buyers with a solid operating history may be able to utilize the SBA 504 loan program for the acquisition. Due to the attractive debt being off ered, investors who use leverage could realize a cap rate spread of up to 400 basis points.

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