MANHATTAN — To better serve the specialized requirements of owners of self-storage properties throughout the United States, AFC Realty Capital has recently-formed the AFC Self-Storage Finance Group.

Paul Fried, an AFC Realty principal, will serve as President of the new Group which will focus on originating and executing real estate transactions on behalf of the owners and developers of self-storage facilities.

"Our experience with self-storage assets, as well as overall expertise in arranging equity, mezzanine and debt financing for these facilities allows us to bring a well-rounded service to the landscape of self-storage financing," Mr. Fried points out.

"This is a sector largely ignored by investment banks and we see this as an opportunity to work with owners to provide more efficient and profitable capital solutions for their activities."

The AFC Self-Storage Financing Group is off to an impressive start. Completing one of the industry’s most ambitious transactions, the Group has arranged joint venture equity and debt financing for a $94 million portfolio -- which includes "take out" financing to acquire some "to-be" built assets on behalf of The Veritas Group.

The capital was used to purchase a portfolio of newly-built institutional grade self-storage facilities in Queens, Brooklyn and the Bronx. The portfolio consists of approximately 380,000 square-feet of self-storage space.

The senior mortgage financing was originated and placed by Mr. Fried with an investment bank. The balance of the 90-plus percent financing came from an institutional equity partner which had not previously invested in the self-storage sector.

"These properties don’t fit the standard self-storage profile for capital providers used to self-storage assets in suburban locales," Mr. Fried points out. "These are large facilities situated in high-density, urban infill sites."

"Many capital providers were hesitant. But, utilizing our extensive contacts with the capital markets and our client’s established track record with self-storage assets in urban areas, we were able to arrange the necessary capital to meet the owner’s business plan."

The AFC Self-Storage Group is a wholly-owned division of AFC Realty Capital, Manhattan-based boutique real estate investment banking firm specializing in equity, mezzanine and debt financing, investment, development, and consulting/advisory services. The firm has been instrumental, both in a principal and advisory capacity, in financing, investment and development transactions aggregating in excess of $15 billion.


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