In the latest sign that the securitized lending market is bouncing back, Strategic Storage Trust Inc. has refinanced 11 properties with a $29.13 million loan provided by Citigroup Global Markets Realty Corp., a commercial mortgage-backed securities (CMBS) lender. CBRE Capital Markets arranged the first mortgage for a term of 10 years at a fixed interest rate of 5.77% and a 30-year amortization.
“This financing was our first time utilizing a CMBS execution since the 2007 change in the market,” said Michael Schwartz, CEO of Strategic Storage Trust, based in Ladera Ranch, Calif., in a Feb. 3 news release announcing the deal. “Despite the more constrained documentation and extensive due diligence requirements of the new CMBS programs, the CBRE team did an excellent job helping us navigate our way through the process and closing the financing.”
The 10-year loan, which carries a low interest rate, will be accretive to Strategic Storage Trust’s funds from operations going forward as the money is invested in new acquisitions, adds Schwartz.
The 11 self-storage facilities refinanced total 7,785 units and 944,500 sq. ft. The properties had a stabilized average occupancy of 77% at the time of funding. The self-storage facilities are located in metro Chicago; Las Vegas; Alpharetta, Ga.; Biloxi, Miss.; Florence, Ky.; Gulf Breeze, Fla.; West Mifflin, Pa. and Jersey City, N.J.
Strategic Storage Trust is the first and only public, non-traded real estate investment trust in the self-storage sector. The company is one of five publicly registered self-storage REITs in the United States. Its portfolio includes approximately 32,000 self-storage units and 3.9 million rentable sq. ft. of storage space.
The CBRE Capital Markets team of Eric Tupler, vice chairman, and Josh Simon, vice president, arranged the financing.