Jones Lang LaSalle welcomed Doug McCarron to the firm’s capital markets platform as a managing director based out of JLL’s Los Angeles office.

McCarron specializes in the acquisitions and dispositions of self storage portfolios, structured financings and commercial equities.

McCarron comes to Jones Lang LaSalle from HFF, where he served as a managing director and leader of that firm’s West Coast brokerage operation. During his career, he has been involved in more than $2 billion of self storage transactions nationwide. Prior to HFF, McCarron was a partner at Storage Investment Advisors LLP.

NREI talked to McCarron about where things are headed in the world of self storage, how the sector fared during the recession and what areas to watch next. An edited transcript of that interview follows.

NREI: Self storage exploded in popularity over the past, say, five to eight years. At what point do you reach saturation and what happens next?

Doug McCarron: The main trigger that can explain the sectors growth is the acceptance of the property type as a true commercial asset class by capital providers. In the past, self storage was looked at as an operating business and lenders could not get their hands around underwriting a self storage deal made up of month to month leases and apply a realistic cap rate to the actual net operating income.

Once Wall Street took notice and started to research the trends and performance of the asset class they began to provide realistic loan dollars that were eventually securitized via CMBS. This triggered the ability for a number of operators to have a capital event through re-financing or by disposing their assets, in turn unlocking more and more capital to the space.

This abundance of capital in the space as well as the easy lending standards fueled a development boom in the sector. If you look at the history of the asset class it took the storage industry more than 25 years to build its first billion sq. ft. and just eight years—1998 to 2005—to develop its second billion sq. ft. Once the financial crisis hit, development in the sector virtually came to a standstill; as is still somewhat the case today.

The operating performance of the public companies in the space, currently the most reliable information source in the sector, over the last few years has increased steadily with occupancies at all-time highs along with consistent year-over-year revenue growth. Most of these gains are attributable to the fact that virtually no new meaningful supply has been built over the last five years. As capital continues to chase the asset class given the sectors resiliency to “recessionary times” and positive consistent year-over-year performance, development will begin to make sense in urban markets again.

From a supply perspective, the industry can withstand, and quite frankly needs, some new supply in select core urban markets across the country. However, from a saturation perspective, overbuilding is the industry’s biggest headwind. As long as construction lending stays in check, and personal recourse and completion guarantees are required for all new construction debt, the industry does not need to worry about reaching saturation in the medium term.

NREI: Why did self storage ride out the recession so well, given how much people needed to cut back on non-essential expenses? Why did self storage remain on consumers' budgets when they gave up other things?

Doug McCarron: Self storage is a “needs” business. The main factor that drives the performance in the industry are “life events,” which including moving, divorce, job relocation, general consumption, moving to college, starting a new business, etc. As consumers were reviewing their budgets during the height of the financial crisis some consumers decided to move out and cancel the use of their self storage needs.

However, the loss of the budgetary constrained tenants was backfilled by “need-based” customers who were unfortunately faced with downsizing their homes, moving back in with parents, and storing items from failed businesses. In addition, the United States is a country that achieves 70 percent of GDP through consumption. Individuals within the United States have a very hard time parting with their personal items and family heirlooms.

NREI: What geographic areas have done well with self storage and where are the untapped markets?

Doug McCarron: Primarily the core urban markets, San Francisco, Chicago, New York, Washington D.C., Seattle, West Los Angeles, continue to perform exceptionally well with consistent occupancy and rental rate growth. Where we see opportunities from an acquisition and growth standpoint are in strong suburban markets that are located roughly 10 to 20 miles from downtown urban markets.

At this point, the most aggressive capital is chasing deals in core urban locations and that capital continues to drive day one yields down to levels not seen since the peak in 2006/2007. Investors are still hesitant to move up the risk curve, resulting in higher yields for assets located in secondary locations.

As capital continues to search for yield and underlying fundamentals continue to increase in the space, we feel that the capital will begin to migrate up the risk curve over the next 12 to 18 months. Investors that have the foresight to begin acquiring assets in these secondary locations may be rewarded considerably in the near future.

Rezidor Hotel Group Names New CEO

The Rezidor Hotel Group appointed Wolfgang M. Neumann as president and CEO.

Neumann currently serves as Rezidor's executive vice president and COO. He succeeds Kurt Ritter, who is retiring at the end of the year and had been president and CEO since 1989.

Under Ritter’s leadership, Rezidor's portfolio grew to more than 430 hotels with 95,000 rooms in operation and under development in 70 countries across Europe, the Middle East and Africa.

Neumann joined Rezidor in May 2011. He spent more than 20 years with Hilton Hotels & Resorts and held various operational and corporate positions there including president, United Kingdom and Ireland and president, Europe and Africa.

Davis Joins Taconic as CIO

Taconic Investment Partners named Kevin Davis the firm’s chief investment officer.

In his new role, Davis is responsible for sourcing, directing and overseeing new investment and business opportunities and is involved in acquisitions, developments, dispositions, debt and equity financings, portfolio and investment management, transaction structuring, overall firm strategy and investor relations.

Prior to joining Taconic, he focused on office, retail and multi-family investments in the New York City and Washington D.C. metropolitan areas for AREA Property Partners, where he was directly involved in or responsible for nearly $2.5 billion of acquisitions.

Johnson Capital Promotes Carnes to President

Cliff Carnes, the longtime COO of Johnson Capital has been promoted to president.

Guy Johnson, the founder and current president will continue with the company as its CEO.

As president, Carnes will continue to have operational and over-site responsibilities of the firm while exploring ways to grow the company by opening new offices and locating new business and financing opportunities. Johnson will continue to be active in the firm’s growth and strategic direction.

Carnes joined the company in 2007 as its senior vice president of operations. Prior to joining the firm, he was an activated reservist in the U.S. Navy with tours in Iraq and Camp Pendleton. Before that, he had several positions in corporate finance and operations in Washington, D.C., New York City and Southern California.

A10 Capital Welcomes Former Goldman Pro

Former Goldman Sachs Commercial Mortgage Capital Co-CEO and Chief Credit Officer Jim Conway joined A10 Capital as chief credit and risk officer.

Conway has nearly 35 years of commercial mortgage experience. At Goldman Sachs he chaired the firm’s credit committee and was responsible for closing more than 1,500 commercial mortgages totaling over $16 billion of loan volume.

New President, Board Members at Steadfast REIT

Steadfast Income REIT Inc. named Ella Shaw Neyland president for the public, non-traded multifamily REIT.

The company’s board of directors is also now comprised of seven members with the appointment of two new independent directors, Kerry D. Vandell and Ned W. Brines.

Neyland succeeds Rodney F. Emery, who will remain chairman and CEO of the company’s board. Neyland’s 30 years of experience includes three years as executive vice president, treasurer and investor relations officer for UDR Inc. While there, she served as a voting member of UDR’s investment committee that approved the repositioning of over $3 billion of investments.

New board members, Vandell and Brines have been appointed as independent directors.

Vandell is the dean’s professor of finance and director for the Center for Real Estate at the Paul Merage School of Business at the University of California-Irvine. Brines is the chief investment officer for the CitizenTrust Wealth Management and Trust division of Citizens Business Bank.

Miller Named Chairman of the Board at McKinley

Eugene A. “Gene” Miller has been elected chairman of the board for McKinley, a move made at the firm’s third quarter board meeting.

Miller is the retired chairman and CEO of Comerica Inc. and Comerica Bank. He is also a director of TriMas Corp., Handleman Co. and DTE Energy Holding Co., as well as trustee and former chair of the Community Foundation for Southeast Michigan and the McGregor Foundation.

NY Cresa Hires New VP

The New York office of Cresa hired Michael Plavin as vice president.

Prior to joining Cresa New York, Plavin was an associate at Grubb & Ellis Co., where he advised tenants and landlords in the development of their real estate strategies. One of his most recent deals was the acquisition of 150,000 sq. ft. of space for Harbor Freight Tools.

VP of East Coast Originations Joins WNC

WNC & Associates Inc. hired Michael K. Staton as vice president, East Coast originations. He will oversee WNC’s work in New York City and New Jersey.

Staton joins WNC from the New Jersey Housing and Mortgage Finance Agency, where he spent his entire career beginning in 1985. Most recently, he served as director of multifamily programs and lending, where he was responsible for analyzing multifamily developments to determine risk levels for primary and secondary mortgage financing.

Throughout his career, Staton has underwritten and closed more than 200 multifamily development mortgages with a collective value in excess of $1 billion.

Passco Names VP

Passco Cos. LLC hired Darryll Goodman as vice president.

Goodman will oversee a portfolio of existing Passco properties in addition to providing new resources for Passco’s growing investment, advisory and restructuring and recapitalization business.

Goodman comes to Passco from Thompson National Properties, where he handled $1.5 billion worth of commercial real estate transactions.

AY Expands in Florida

Avison Young expanded its Florida operations by bringing on 30 members of the brokerage and property management firm Flager Real Estate Services.

The move brings eight new principals from Flager to Avison Young: S. Pike Rowley, Keith O’Donnell, Wayne Schuchts, Greg Martin, A.J. Belt III, Brian Mark, Michael Vullis and Scott Auker.

Rowley, who will serve as managing director of Avison Young’s Florida region, was most recently president of Flager Real Estate Services. There he oversaw day-to-day brokerage operations and property management of more than 12 million sq. ft. of industrial, office and retail space for corporate, private and institutional clients.

During the past decade, O’Donnell has been responsible for the completion of more than $3 billion worth of regional U.S. transactions, including 3.5 million sq. ft. of properties for IBM and Siemens.

Schuchts specializes in office and industrial property transactions for institutional investors and corporate users and has negotiated the completion of more than $5 billion and 12 million sq. ft. worth of transactions, including 50-plus transactions involving properties greater than 100,000 sq. ft.

Before joining Avison Young, Martin served as senior vice president with Flagler for two years and spent a total of 16 years with Cushman & Wakefield and CBRE.

Over the course of his career, Belt has been responsible for the acquisition, disposition and management of more than $2 billion worth of commercial real estate assets.

Since launching his real estate career in 1997, Mark has facilitated more than $2 billion worth of commercial property transactions.

Vullis has been responsible for the property management of more than 24 million sq. ft. of commercial properties during his real estate career, which has spanned more than two decades.

Auker is a multifamily property specialist who led the acquisition, development, construction or management of more than 5,000 multifamily units and 1 million sq. ft. of commercial projects across the Midwest and Eastern U.S.

Three Pros Join Access Point

Access Point Financial Inc. added three hires to the company’s senior management team.

Dilip Petigara has been named chief risk officer, Jon Burckin joins as managing director business development and Jon Hellbusch assumes the role of managing director capital markets.

Most recently, Petigara was the managing director of an advisory services firm where he was responsible for $250 million in loan closings. Burckin was managing director for Scotia Capital’s real estate and hospitality group. Hellbusch comes to Access Point from WestLB AG, a German state-owned universal bank, where he most recently was executive director within the bank’s asset based finance group and also an investment partner with the Access Point Financial team’s predecessor firms.

Real Estate Exec to Lead New Division at Balke Brown

Balke Brown Transwestern has formed a real estate owned division to assist banks with the management and disposition of distressed commercial properties.

Leading the new division is Robert G. Camenzind, who comes to Balke Brown from SecureAsset Services, a Kirkwood, Mo.-based, company that specializes in helping banks gainfully resolve distressed property situations. Camenzind will also lead Balke Brown’s initiative to grow its third-party multi-family management business.

C&W Promotes Pro in DC and Welcomes Two New Execs for NYC

Cushman & Wakefield promoted Brian Dawson to lead the firm’s Washington, D.C. area operations.

The firm also welcomed Frank T. LePera as a senior director in office brokerage and Matthias Li as a senior associate in the firm’s strategic agency services group. Both LePera and Li will be based in the firm’s Manhattan office.

As senior managing director, area leader, Dawson assumes oversight of the company’s strategic business objectives, recruitment goals, day-to-day activities, and continued growth of services in the Washington, D.C. metropolitan area, including Virginia and suburban Maryland.

Previously Dawson led the firm’s suburban Maryland operations while continuing to service clients as a managing broker. Dawson joined Cushman & Wakefield in 2007 as a senior director and partner in the firm’s institutional investment sales group. He came to C&W from Spaulding & Slye Colliers, where he was a principal.

In New York, LePera will concentrate on office leasing. Prior to joining C&W, he was a senior managing director at Cogswell Realty LLC, where he directed the leasing and asset management of the firm’s one-million-sq.-ft. office portfolio in Newark, N.J.

Li will serve as a liaison between brokerage teams and clients, responsible for researching, preparing and analyzing market reports and assisting clients in structuring leases, lease renewals, assignments and subleases.

Before coming to the firm, Li practiced real estate law in New York City representing landlords and tenants in a broad range of real estate matters including leasing, litigation, building operations, bankruptcy and construction disputes.

Senior Managing Director Joins NGKF

Newmark Grubb Knight Frank welcomed Thomas MacDonald to the company’s Pittsburgh office as a senior managing director.

He brings to this position 22 years of experience in office leasing, investment sales, corporate consulting and strategic planning and will focus on assisting owners and occupiers with their real estate service needs in both the western and central Pennsylvania markets.

MacDonald comes to Newmark Grubb Knight Frank from CBRE, where he was a senior-ranked producer for 14 years.

Lend Lease Names Regional Director

Lend Lease named Kelly Benedict regional director of business development for the Americas for the project management and construction firm.

Benedict will remain based in the Chicago office. In her new role, she will bring together business developers from the Americas region of Lend Lease into a “peer group” and ensure consistency of sales efforts, that lessons learned are shared and that there is a renewed focus, where appropriate, on regional clients.

Kelly Benedict has been in the commercial real estate industry for more than 20 years. She has previously held the roles of vice president, director of business development for the Chicago office and has also worked for the company in Washington D.C.

Westhof Promoted to Director at Cronheim

Cronheim Mortgage promoted Anna Westhof to director of the firm.

She began as a real estate analyst and has grown into a transaction management role with more than $2 billion in closed real estate capital transactions under her belt.

In her current role, a production partner to the firm's senior bankers, Westhoff leads deal evaluation and capital procurement efforts. She consults with clients on capital structuring and transaction feasibility. She also helps manage Cronheim's extensive lender relationships and has helped grow the company's servicing portfolio significantly.

Westhoff joined Cronheim in 2004 as a new graduate of the London School of Economics. She earned her bachelor’s degree from Northwestern University in 2001.

CREC Hires Senior Leasing Associate

Continental Real Estate Cos. hired Chris Barney to the firm’s retail tenant representation practice as a senior leasing associate.

Barney will work with retailers of all sizes looking to grow their presence in key submarkets across Florida.

His past roles include serving as director of tenant representation at High Street Retail USA, where he was responsible for maintaining relationships with retailers and expanding the company’s client roster, and as a leasing associate at Woolbright Development.

Chambers Appoints Senior Counsel

Chambers Street Properties appointed Sarah Hinton to the position of senior counsel, a newly created position at the firm.

Hinton joins Chambers from the law firm of K&L Gates LLP. She was an associate at the firm from 2006 to 2012, where her experience included the representation of Chambers Street Properties in real estate and corporate matters.

Summer Street Expands Offerings

Summer Street Advisors LLC is expanding their business portfolio to include asset management and resolution services for both new and existing clients.

These services will become a standard offering within all transaction management proposals. Summer Street Advisors will continue to provide strategic business plan development and execution, transaction underwriting and management, debt restructuring, lease negotiation and contract administration.