July 06, 2022
Aries Capital of Chicago has closed $46 million in construction, bridge and permanent debt financing for over 414,000 square feet of new and existing self-storage facilities in California, Colorado, Florida and Texas. The financing was arranged on behalf of three separate clients by Aries Capital Director of Capital Markets Brandon Perdeck, Director of Acquisitions Matt Carney and Assistant Vice President Steve Adams.
The transactions include a $17.5 million construction loan for a self-storage facility in Santa Clarita, California for Diamond Development Partners, a unit of Salazar Construction Co., Inc.; an $8.65 million, full-term interest-only, CMBS permanent loan for the acquisition of a portfolio of four self-storage facilities in Colorado, Florida and Texas by Southern Star Self Storage; and a $19.875 million interest-only loan for the refinancing and phase two construction of Vineburg Wine & Self Storage in Sonoma, California.
“Self-storage has been an active asset class for Aries Capital. Lenders like its stability and sustainable cash flow and are willing to finance self-storage properties at higher leverage and better pricing than retail and other commercial assets.” said Perdeck. “Because Aries has relationships with multiple types of capital sources eager to finance self-storage, we are able to provide creative structures for our clients at each stage of their business plans and whether they are looking to build, add value, acquire or refinance.”
The $17.5 million construction loan was closed on behalf of Diamond Development Partners. Diamond is a unit of Salazar Construction Co., a family-run construction, investment and fully-integrated development firm based in California. The financing will be used to build a new 1,361-unit, 100% climate controlled self-storage facility, Centre Point Self Storage, at 21145 Diamond Place in Santa Clarita, California.
The state-of-the-art facility is situated within a 1.5-acre office/industrial complex in a stabilized infill urban area with convenient local and regional access, and good visibility. Salazar owns multiple flex-industrial spaces within the market and Centre Point Self Storage is its first self-storage project.
“The Diamond/Salazar team has extensive experience in industrial and commercial real estate throughout Southern California and was looking to expand into self-storage. We brought in a bank with whom Aries Capital has a longstanding relationship and effectively delivered the financing Salazar needed to diversify and grow its portfolio,” said Adams.
Lila Haimoff, chief financial officer of Salazar, said “I’ve had good support from Aries Capital in establishing a relationship with the bank. It’s gone smoothly. Brandon was very diligent in following up on all the details to ensure a smooth closing.”
In the second transaction, Aries arranged an $8.65 million, non-recourse, full-term interest-only, CMBS permanent loan for the acquisition of a portfolio of four self-storage facilities located in Colorado, Florida and Texas. The 10-year loan was closed on behalf of the Houston-based buyer, Southern Star Self Storage, in just 35 days at 60% loan-to-value. The buyer purchased the portfolio for $14.4 million.
“The existing loan on one of the assets was maturing and the seller needed the buyer to find financing quickly. We were able to arrange the interest-only financing our clients needed to execute the purchase on time and closed on the four properties in just 35 days,” said Perdeck. “All of the properties are well located, and our clients will be able to use their platform and extensive storage experience to add value.”
The properties total 152,000 square feet and include Montrose Airport Storage at 63224 La Salle Road in Montrose, Colorado; Southern Star Storage at 3250 N.E. Candice Avenue in Jensen Beach, Florida; Addison Airport Self Storage at 4485 Glenn Curtis Drive in Addison, Texas; and Southern Star Storage at 3608 US-281 in George West, Texas.
“We’re very pleased with the support and thoroughness of Aries Capital,” said Mark Torok, CEO of Southern Star Self Storage. “The transaction involved four properties over three states and Aries did a stellar job of coordinating all of the moving pieces.”
In the third transaction, a $19.875 million, interest-only bridge and construction loan was arranged on behalf of Vineburg Wine & Self Storage at 1010 Napa Road in Sonoma, California to refinance an existing construction loan and fund a second phase of construction. Completed in July 2021, the class A self-storage property has experienced unprecedented demand from local area wine collectors, restaurants and micro-wineries. The facility offers 396 climate-controlled and standard storage units including wine pallet storage. The financing Aries Capital secured will enable the borrower to add another 65,000 square feet of storage space consisting of 489 additional units. Once complete, the facility will offer a total of 885 units.
“As a class-A property with broad wine storage options, the property leased up to over 50% in the first few months of phase one. Aries was able to garner significant lender interest due to the high demand for new storage product in the market. We sourced a qualified lender that understood the significant value the additional units would add and delivered an attractive solution to both refinance the existing loan and provide the capital needed for phase two of the project,” said Perdeck.
“Brandon and the Aries Capital team were highly effective securing the right loan for the project. From introduction to closing, Aries Capital worked hard to ensure a seamless execution. I look forward to working with the Aries team on future deals,” said Greg Van Cleave, principal for Vineburg Wine & Self Storage.