Trojan Storage Portfolio
May 14, 2022
Portfolio Includes Six Newly Developed or Recently Acquired Trojan Storage-Owned Facilities Totaling Approximately 600,000 Rentable Square Feet Across Southern California, Northern California, Oregon, and Washington.
Asset Class Coming of Age with Traditional Lenders Evidenced by Gantry Securing More Than $1.0 Billion of Low-Cost Fixed Rate Financing for Self Storage Properties Since 2019; Life Companies, CMBS and Banks Now Vying for Loans as They Learn to More Effectively Underwrite Operative Model
Los Angeles, Calif. (May 16, 2022) – Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured $130 million of permanent financing for a six-property Trojan Storage-owned self storage portfolio totaling approximately 600,000 rentable square feet across facilities in California, Oregon and Washington. The properties include three newly completed, pre-stabilized storage facilities located in California, and three recently acquired existing facilities in California, Oregon and Washington, targeted for their value-add potential as occupancy and rents are adjusted to market rates while quality is improved to align with the standards of the Trojan Storage brand.
Gantry’s Andy Bratt, Principal, and Amit Tyagi, Senior Director, with the firm’s Irvine and Los Angeles production offices, respectively, secured the financing on behalf of Trojan Storage. Financing was structured with one of Gantry’s life company lenders, featuring a 10-year term at a fixed, mid-3% rate, and a significant interest only period later transitioning to a 30-year amortization schedule. Obtaining fixed-rate permanent financing, considering the pre-stabilized nature of the portfolio, required creative structures that will remain in place until the portfolio achieves full stabilization. These are structures often reserved for other asset classes.
According to Gantry’s Andy Bratt, “Self storage as an asset class has come of age across our spectrum of traditional, fixed rate lenders as they become more and more comfortable underwriting the unique operative model and fundamentals of this asset class. Gantry has been instrumental in exposing the capital markets, particularly insurance company lenders, to the asset class over the last decade. Gantry executed the first storage loans for many institutions over the years. These were early days in what has now become a substantial business for Gantry. We have continued to grow our self storage financing capabilities and have created a powerful niche in space.
Gantry’s Amit Tyagi adds, “Increasing sponsorship sophistication and strong performance over the past decade has cemented self storage’s status as a preferred asset class alongside multifamily and industrial for many of Gantry’s lenders. In this instance, as in several others, this investment in education and subsequent comfortability has allowed Gantry to secure attractive long-term financing on behalf of clients for not only stabilized assets, but also pre-stabilized assets in what remains a generationally low interest rate climate. This has been a win for our sponsors and lenders. As we have adapted our financing strategies with the storage industry’s growth over the past decade, we’re excited to remain at the forefront of advancing the capabilities of self-storage finance as the industry continues to grow in the coming decades.”
Self Storage owners and sponsors are looking to Gantry as the premier self-storage financing platform offering the widest array of fixed rate loan options in today’s rapidly increasing interest rate environment. Gantry has access to more life insurance companies than the competition assuring borrowers receive the best financing the market has to offer and the expertise in the space, as referenced in Pete Welsh’s recent article recently featured here.
The subject properties are located in West Coast markets, including:
New Construction: Commerce, CA / Glendale, CA / San Jose, CA
Recently Acquired: Salinas, CA / Portland, OR / Vancouver, WA