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Retirement Income
For Life
Wish there was a way to make your savings last forever?
Now you can with a secure investment in the self storage industry.
The Business
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Is this investment right for me?
We've established suitability standards for prospective investors.
What will you do with my money?
Our business plan outlines the exact use of your investment.
Our Storage Facility
It provides a stable, tangible asset to protect the value of your investment.
Learn why self storage is the best investment for your future and family
The Self Storage Industry
Self-storage refers to properties that offer do-it-yourself, month-to-month storage space rental for personal or business use. Self-storage offers a cost-effective and flexible storage alternative. Tenants rent fully enclosed spaces that can vary in size according to their specific needs and to which they have unlimited, exclusive access. Tenants have responsibility for moving their items into and out of their units. Self-storage unit sizes typically range from five feet by five feet to ten feet by 30 feet. Self-storage provides a convenient way for individuals and businesses to store their possessions, whether due to a life change or simply because of a need for extra storage space.
According to the 2011 Self Storage Almanac, self-storage facilities generally have a tenant mix of approximately 71% residential, 17% commercial, 6% military and 6% students. The mix of residential tenants using a self-storage property is determined by a propertys local demographics and often includes people who are looking to downsize their living space or who are not yet settled in a large home.
The items residential tenants place in self-storage properties range from cars, boats and recreational vehicles to furniture, household items and appliances.
Commercial tenants tend to include small business owners who require easy and frequent access to their goods, records or extra inventory, or storage for seasonal goods. Self-storage properties provide an accessible storage alternative at a relatively low cost. Properties generally have on-site managers who supervise and run the day-to-day operations, providing tenants with assistance as needed.
The six key demand drivers of self-storage are:
(1) Population growth; (2) percentage of renter-occupied housing units; (3) average household size; (4) average household income; (5) supply constraints; and (6) economic growth. Tenants choose a self-storage property based largely on the convenience of the site to their home or business. Therefore, high-density, high-traffic population centers are ideal locations for a self-storage property. A propertys perceived security and the general professionalism of the site managers and staff are also contributing factors to a sites ability to secure rentals. Although most self-storage properties are leased to tenants on a month-to-month basis, tenants tend to continue their leases for extended periods of time.
However, there are seasonal fluctuations in occupancy rates for self-storage properties. Generally, there is increased leasing activity at self-storage properties during the summer months due to the higher number of people who relocate during this period.
As population densities have increased in the U.S., there has been an increase in self-storage awareness and development. According to the Self-Storage Associations Self-Storage Industry Fact Sheet:
• At year-end 1984 there were 6,601 facilities with 289.7 million square feet of rentable self-storage in the U.S. At year-end 2010 there were approximately 46,500 primary self-storage facilities representing approximately 2.2 billion square feet;
• The top five self-storage companies own and operate just 9.5% of all U.S. facilities;
• 90% of all self-storage companies own and operate just one primary self-storage facility; and
• It took the self-storage industry more than 25 years to build its first billion square feet of space; it added the second billion square feet in just eight years (1998-2005).
Suitability Standards
Who is this investment right for?
Investors are required to have, excluding the value of an investors home, furnishings and automobiles, a net worth of at least $108,000
Important considerations
An investment in our shares of common stock involves some risks and is only suitable for persons who have adequate financial means, desire a relatively long-term investment and will not need liquidity from their investment. There is no public market for our shares and we cannot assure you that one will develop, which means that it may be difficult for you to sell your shares. This investment is not suitable for persons who seek liquidity or guaranteed income, or who seek a short-term investment.
Use of Proceeds
1st Mortgage Pay-Off
72.4% (approximately $3,100,000.00) will be used to pay off our current and only mortgage. The balance is currently $3,100,000 and is currently being repaid at a variable interest rate which is currently %5.25. The annual debt service for this mortgage is $230,000.00.
This is the first and most important step we will make with your investment. Upon completion of the payment, the facility will be free and clear of all encumbrances. This will ensure our investors a secure and stable position. The increase to our bottom line will also allow us to pay returns above traditional methods of investing such as T-bills, savings bonds, and stocks.
Costs Incurred Due To This Offering
1.5% ($51,450.00)
These are the costs of doing business. They are one time expenses associated with the marketing, screening potential investors, and costs to close each transaction including all applicable legal fees.
Our Planned Expansion Means Your Money Will Work Harder For You
8.1% ($278,550.00) although we anticipate costs of $150,000-$250,000, the remaining proceeds will then be used to expand our current, enclosed self-storage space.
We currently offer 36,390 square feet of storage space allocated between 3 different sizes. Our original permits and conditions were for 96,000 square feet of self-storage space which allows us to expand dramatically should demand call for it.
Our current unit mix is 5x10, 10x15, and 10x20. We wish to offer 2 new dimensions, and increase our number of 10x20 units as well. With the addition of 5x5 and 10x10 we will realize a higher dollar per square foot rental rate than those of the larger units.
To illustrate this we use the following example. Our 10x20 storage units are $169/month or $0.845/square foot. Our 5x10 storage units rent for $60/month or $1.20/square foot. Finally, our site has five 3.5x10 storage units which rent for $49/month or $1.40/square foot.
It is impossible to charge $1.40/square foot on our 10x20 units because the rental rate would be $280/month and way above the pricing of our competitors. However, with the addition of 5x5 units we can charge upwards of $2.00/square foot. The consumer does not break down price per square foot the way a manager will.
Moreover, the average consumer can justify $50/month to keep items that are dear to them or that theyd rather not replace.
We would like to increase our self-storage space by taking advantage of unused area on the site. To do this we plan on first using 5 unused areas currently used as 10x15 parking spaces.
This initial phase will provide an additional 44 new units (2,115 rentable square feet) and a net increase in rental revenue of $1,309/month at very conservative rental rates to ensure full lease up.
The second phase is contingent on the company having adequate funds. It calls for construction of a 2 story builiding on another unused area measuring 157 x 32.
If costs permit this will add an additional 97 units (6,659 rentable square feet) to our unit mix. The new units will generate $6,721 more income each month!
If the company does not have enough cash to construct the entire 2 story building we may then opt to only build the first level floorplan which would allow us to expand to the 2nd floor in the future.
A build out of the first level floorplan will ad an additional 67 units (3,055 rentable square feet) to our unit mix. The increase in our revenue would be $3,559 each month.
If we can achieve a complete buildout of both phases we wil realize an increase to our annual revenue by over $96,000!
Return on Investment
The following figures are purely speculative and are an estimate of the return you can expect on your investment in the company.
The amounts shown below are assuming we operated with no debt service, and with the current unit mix in place. Returns will be paid from the monthly net profit and distributed in accordance with each shareholders ownership stake.
Year Ended 12/31/11
RETURN ON INVESTMENT AS FACILITY IS TODAY
Year Ended 12/31/10
12/31/09
12/31/08
12/31/07
Operating Data
Total Revenues
$633,851.58
$590,706.79
$632,709.78
$553,648.29
$556,404.09
Operating Expenses (DOES NOT INCLUDE DEPRECIATION, OR DEBT SERVICE)
*not audited
$132,000.00*
$161,157.00
Net
$421,648.29
$395.247.09
1.5% ownership distribution
$6,324.72
$5,928.70
Return based on $108,000 investment
5.8%
5.45%
The figures below represent a full lease up of the additional 44 units proivded by phase one of our expansion plans.
The rental rates are conservative to ensure maximum occupancy and are listed below. Moreover, management will increase these figures through effective rate increases and then filling any vacancies at market rates.
RETURN ON INVESTMENT AFTER PHASE 1
12 months of operation at pro-forma figures
PHASE 1 PROFORMA.pdf
584,985.72
144,000
NET
440,985.72
1.5% OWNERSHIP DISTRIBUTION
6,614.79
Return based on $108,000 Investment
6.12%
If the company is unable to raise the required funds for a complete build of of phase 2 then we will build only the ground level floor plan of the phase 2 building, with the addition of the top floor in the future.
RETURN ON INVESTMENT FULL BUILD OUT
RETURN ON INVESTMENT GROUND LEVEL BUILD OUT ONLY
655,113.72
629,037.72
144,000.00
Total Revenue
485,037.72
511,113.72
7,275.56
7,666.71
6.7%
7.1%
COMPLETE BUILDOUT PROFORMA.pdf
Important
Q & A
Q: For whom is an investment in our shares recommended?
A: An investment in our shares may be appropriate if you (1) meet the suitability standards as set forth herein, (2) seek to diversify your personal portfolio with a finite-life, real estate-based investment, (3) seek to receive current income, (4) seek to preserve capital, (5) wish to obtain the benefits of potential long-term capital appreciation, and (6) are able to hold your investment for a long period of time. On the other hand, we caution persons who require liquidity or guaranteed income, or who seek a short-term investment.
Q. Does Murrieta Mini Storage, Inc. already own any storage facilities?
A: Yes, our current holdings include one 538 unit (36,390 square feet) self-storage facility, located in Murrieta, CA which is the key to our offering. This facility was commissioned by Murrieta Mini Storage, Inc. and has been operational since September 2004. The funds raised from our offering will be used to pay off the only mortgage on the property and expand our self-storage square footage.
Q: What is our strategy for the using the money raised by this offering?
A: Our primary focus is debt elimination. Our current debt is due to expire in 2015 and rather than refinance we are going to pay off the balance then due ($2.9M if variable rate stays at current rate of %5.25). There is also a $248,285.00 share holder loan on the balance sheet which will remain on our balance sheet. The amount of the shareholder loan is non-interest bearing.
Our next focus, involves evaluating the demand for 2 new unit sizes that we wish to add to the current unit mix. The entitlements for the facility allow for a total of 96,000 rentable square feet of storage units. By utilizing the unused area of the facility we are going to construct a reasonable amount of new storage units taking into account the demand and the maximum potential for this specific area of the facility as it is completely unused as of today and would be a net increase to our square footage without sacrificing valuable boat and RV storage.
The remainder of the funds will be held as reserves, or may be used to acquire other commercial/residential properties which we can get for rock bottom prices, that will add to our net income, preserve our capital, and reap the rewards of long term appreciation.
Q: How do you own the facility?
A: Murrieta Mini Storage, Inc. is a California corporation. It is currently taxed by the IRS as a subchapter S corporation. The ownership entity will be changed if it becomes necessary, and beneficial to the company. Murrieta Mini Storage, Inc. is the sole owner of the current holdings.
Q: How many shares are currently outstanding?
A: There are currently 250,000 outstanding shares. Of which 122,500 are being offered which represents a 49% ownership stake.
Q: If I buy shares will I receive distributions, and if so, how often?
A: Since we cannot guaranty we will find a single investor to meet our primary fund raising goal, we are not able to pay any distributions. Distributions will begin once the gross proceeds reach the amount needed for the mortgage payoff. At that point each shareholder will receive monthly distributions of the net income reflecting their ownership stake.
Q: What is being offered?
A: We are offering a maximum of 122,500 shares for sale at a price of $28 each. The total amount sought to be raised is $3,430,000.00.
Q: Is there a minimum investment required?
A: Yes, for purposes of keeping the decision making streamline and communication between shareholders up to date, and in a timely fashion we ask a minimum investment of $108,00 representing an ownership stake of 1.5%
.
Q: If I buy shares of the company where can I later sell them?
A: We do not have a convenient and immediate avenue to sell the shares of our company in. Because of this you may not be able to sell your shares in a timely manner, or may be forced to sell them at a lower price than what you paid for them. However, you may sell your shares to any buyer who meets the suitability requirements.
Our self-storage facility offers inexpensive, easily accessible, enclosed storage space to residential and commercial users on a month-to-month basis.
We feature a 14’ cinder block perimeter wall with a computerized access gate and is well lit. Our property is single-story, thereby providing customers with the convenience of direct vehicle access to their storage spaces.
The facility offers 36,390 net rentable square feet, and another approximately 88,000 net rentable square feet of open boat and RV storage.
Constructed in 2004, the facility features a masonry back wall with metal framing resting on concrete slabs and has standing seam metal roofs.
Customers have access to their storage areas during business hours, and some have 24-hour access. Individual storage spaces are secured by a lock furnished by the customer to provide the customer with control of access to the space.
Unit Size: # of units
5x5 8
3.5x10 5
5x10 75
10x15 91
10x20 94
10x15 parking 22
10x20 parking 86
10x30 parking 89
11x35 parking 8
11x50 parking 68
OTHER PORTFOLIO HOLDINGS
Murrieta Mini Storage, Inc. also owns a 3 acre parcel of industrial zoned land in the City of Murrieta. This land is free and clear of all encumbrances. The property will be held until market conditions improve at which time the property will be sold.
Info
Form
Address
41605 Elm St.
Murrieta, CA 92562
Telephone
1.951.850.2548
Email
gatewaysvcs_gmail.com
