The latest single loan CMBS is backed by a portfolio of self-storage facilities.

The $274.4 million BAMLL Commercial Mortgage Securities Trust 2015-HAUL refinances a 20-year, fixed-rate mortgage secured by 60 self-storage properties owned by Mark V. Shoen, the son of the founders of U-Haul.  

Fifty-six of the properties are owned fee simple with four properties held in leasehold.

The loan is being used to refinance prior mortgage debt of $214.8 million, repay subordinate debt of $56.8 million and pay closing costs.

Among the strengths of the deal, according to Fitch Ratings, is the fact that loan is fully amortizing – it pays both interest and principal throughout its term. Leverage is also low; Fitch puts the loan-to-value ratio at 78.3% and a debt service coverage ratio of 1.22x.

The portfolio of buildings has also performed well, with year-over-year growth in both occupancy and net operating income since 2010.

Competition is a concern, however. The self-storage industry has experienced rapid growth over the past 10-20 years but is still quite fragmented, with the smaller owners and operators controlling the majority of facilities, according to Fitch. The 10 largest self-storage companies in the U.S. own approximately 13.1% of facilities, with the top 50 controlling only 17.1%

Strength of property management is another key driver of Fitch’s ratings. Shoen owns the properties via two holding companies: he controls Blackwater Invesments, which in turn owns 100% of Private Mini Storage, the owner of the properties. Schoen is also a significant shareholder in AMERCO, the holding company of U-Haul, according to Fitch.

The portfolio is managed by U-Haul through management agreements with U-Haul subsidiaries in each of the states where the portfolio properties are located.

The securitization trust will issue two tranches of class A notes with a preliminary rating of ‘AAA’ from Fitch that benefit from credit enhancement of 42.1%; the class B notes are rated ‘AA’ and benefit from credit enhancement of 30.5%.

BofA Merrill Lynch and Drexel Hamilton are the underwriters.

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