Price Self Storage in Culver City

Price Self Storage in Culver City

A portfolio of Calabasas-based Ezralow Co. properties, including some in L.A., has secured $364 million in financing.

The portfolio includes 12 self-storage and three industrial assets. The self-storage facilities have 1.8 million square feet, and the industrial properties have 428,000 square feet of space.

The L.A. properties in the portfolio are located in Culver City and West L.A.

The commercial mortgages came from four separate life insurance companies.

Paige Serden, Peter Welsh, Braden Turnbull and Josh Natker from San Francisco-based commercial mortgage banking firm Gantry Inc. secured the financing.

Serden and Gantry have a long history with Ezralow, and Serden said Gantry saw that Ezralow could benefit from refinancing.

“We could provide substantial value by refinancing the asset and reducing interest rates,” Serden said. “We started a dialogue with the company on refinancing their storage portfolio primarily.”

She said talks were put on hold for a while due to the Covid-19 pandemic and regulations making it harder to collect rent or evict tenants.

“They evaluated whether they would look at selling the portfolio and came to the conclusion we should look at financing the portfolio,” Serden said.

She and her colleagues at Gantry started marketing the properties, looking to find lenders.

“The timing was perfect. We started at the very end of August, beginning of September,” she said. “In the capital markets, you had a deep breath everyone took during Covid, then everyone woke up.”

She added that one unique part of the financing was that the company was looking for individual financing for the properties and not pool financing. Ezralow didn’t want faults at one property to be tied to another, or for one property to be used as collateral for another.

“Many lenders prefer to do pools because it allows them to get collateral coverage,” Serden said.

Serden also worked to make sure the loans all mature at different time periods.
Self-storage is generally an attractive asset class to investors, she added.

“Storage has always been a pretty reliable performing asset if it’s in the right locations, so the better-performing assets are in dense geographies,” she said.

“In the last recession, the product really performed incredibly well. It was resilient,” she added.

The product also has a fairly low cost of operations. But location is still key, something Serden said Ezralow’s portfolio had going for it.

“Finding locations where there are barriers to entry is very critical. This portfolio is mainly coastal with high barriers to entry. You would never get it approved again,” she said.

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