Scott was hired by the owner of the Empire Self Storage Facility to quietly take it to market. The facility is 54,512 SF with 344 storage units, 139 are climate controlled. We took the facility quietly to market and saturated the pool of storage buyers without broadcasting the sale to the public to keep the storage tenants from getting restless. We found the top dollar buyer and had a deal in approximately 45 days. Then the challenges began, the owner had built the facility in the early 2000’s and maintained it meticulously but didn’t push the rents as aggressively as the market would bear, this was attractive to the buyer because they knew there was a lot of room in the rents, but to the appraiser it was problematic. The property failed to appraise buy almost 12% of the contract price. Next during diligence came the floor insurance issues, unbeknownst to us or the seller, because he owned it free and clear, was that during the last Army Core of Engineers flood adjustment this property was moved into the 100 year flood plain. Being in the flood plain would require the new owner to have flood insurance and in essence lower their NOI. We managed to salvage and close this deal for our client at still 8% above appraised value and at the lowest cap rate recorded for a storage facility in the Omaha-Lincoln MSA, but it was a challenge. In the end both the Buyer and Seller are happy with the deal but it took a lot of work to get to the closing table.
