We run extensive background checks, criminal checks, bad actor checks, and reference checks on sponsors. In addition to never allowing a sponsor with a criminal history / any securities related issue to use the platform, we may also turn down sponsors due to poor reference checks even if background and criminal checks come back clear.
We require unaffiliated sponsors to use an unaffiliated third-party escrow agent. When an investor makes an investment with unaffiliated sponsors using the RealtyMogul platform, the investor’s money is transferred directly into a third-party escrow account. All closing conditions in connection with a sponsor’s offering need to be met before the third-party escrow agent will approve releasing investor funds to the issuer or general partner. For example, if an issuer or general partner plans to use funds for a real estate acquisition that does not ultimately transact, the third-party escrow agent will not transfer investor funds to the issuer or general partner, and funds will be returned to investors.
Our controls include visiting every property (or a subset of properties if it’s a fund) to confirm the real estate is what and where the real estate is supposed to be.
We have robust quality controls with detailed checklists and a review of third-party reports.

DealPoint Merrill / Platinum Storage Group
DealPoint Merrill is an owner and operator of value-added and redevelopment assets, as well as the sponsor of real estate co-investment offerings. For more than 29 years, the principals and its affiliated companies have earned a reputation for client-centric management services from a broad range of financial institutions, public agencies, and individuals. DealPoint Merrill's services are built on one simple concept: they place clients' interests first and manage the assets as if they are their own. DealPoint Merrrill also co-invests in all of its investment properties. Based in Los Angeles, the company has established a track record of success with a scope of operations encompassing development and construction for its own account, third party asset and property management, as well as court appointment receivership and commercial loan workout strategies and negotiation services to solve complex issues for property owners and investors.
David Frank and Sterling P. McGregor are the owners and operating members of Deal Point Merrill, LLC and have the exclusive authority to manage and control all aspects of the business of the Company. The Manager operates two subsidiary companies:
Sperry Van Ness / Deal Point Merrill Property Corporation, a Delaware limited liability company, is a subsidiary of DealPoint Merrill, LLC that works closely with more than 165 national offices to provide superior investment brokerage services and property management services. Sperry Van Ness International Corporation (SVNIC), is one of the most innovative commercial brokerage firms in North America with approximately $8 billion in annual sales volumes. Our national brokerage platform is comprised of highly qualified and experienced specialists in office, industrial, retail, multi-family, self-storage land and investment real estate. In addition, the company has product specialists with intimate knowledge and experience by product type within their respective geographic market areas. This broad range of market expertise allows us to better meet our investor’s requirements and achieve exceptional results.
Sperry Van Ness/ DealPoint Merrill Equities, a Delaware limited liability company, is a subsidiary of DealPoint Merrill LLC, which provides Sperry Van Ness® advisors’ and their clients with value added real estate co-investment opportunities and development services. These investments also include tenant in common co-ownership, real estate funds and individual property offerings. The majority of our offerings consist of redevelopment or adaptive reuse, as well as, new development. Each of our investments are supported by strong investor relations with on-line paperless reporting, highly disciplined internal expense control and accounting infrastructure to include full reporting transparency and audited financials. All of our co-owned properties are internally managed with “day to day” asset management by company principals.
The Merrill Group of Companies, and its affiliate The Merrill Companies, based in Los Angeles since 1985, has established an enviable track record of success with a scope of operations encompassing development, acquisitions and property management for its own account. The managing members are David Frank and Sterling McGregor. The managers individually have over 28 years of commercial real estate and capital markets experience. The principals have acquired and or developed over 20 million SF of commercial and residential properties.
PRIOR PERFORMANCE OF THE MANAGER AND AFFILIATES
The information presented in this section presents the prior performance of investment projects for investor real estate programs (the “Affiliate Sponsored Programs”) managed by The Group of Merrill Companies (“The Merrill Companies”) or an Affiliate or predecessor of The Merrill Group of Companies. The principal of The Merrill Group of Companies is David Frank, who is also a principal of the Manager of DealPoint Merrill. The Merrill Group of Companies is not a manager or sponsor of this Offering and you should not assume that you will experience returns, if any, comparable to those experienced by investors in the Affiliate Sponsored Programs. Purchasers of Units will not acquire any interest in any Affiliate Sponsored Programs.
The principal business of The Merrill Group of Companies, LLC and its affiliates was the acquisition, development and management of commercial real estate properties. None of the real estate programs that The Merrill Group of Companies has been involved with were registered with the SEC or any state agency and, consequently, were not and are not subject to the various reporting requirements, proxy rules, and insider trading rules imposed by such agencies.
To view a list of properties that have been acquired and sold by The Merrill Companies and its predecessor entities from through 1998 through 2012 and a list of properties that are currently owned and/or operated by The Merrill Companies and its Affiliates, CLICK HERE.
Platinum Storage Group
Platinum Storage Group ("Platinum") is a privately-held, real estate company headquartered in Irvine, California.. Founded in 1999, Platinum Storage Group has developed an excellent reputation for their management, acquisition and development services in the self storage industry. Platinum currently operates a national platform consisting of 45 self storage facilities across 7 states and is actively expanding its portfolio through new acquisition and third-party management. Platinum's property management services include the following: day-to-day management, site staff evaluation and hiring, experienced staff of regional and district managers to ensure proper training and accountability, monthly visits by supervisors, delinquency control, constant analysis of operating reports, and competition reports.
The list below contains selected transactions from Platinum's management and acquisition portfolio.
Arizona
American Mini Storage - 7020 N. Camino Martin Tucson, AZ 85741
Sierra Vista Central Self Storage - 4029 E. Golden Acres Rd. Sierra Vista, AZ 85650
Storage Direct Self Storage - 4200 N. Black Canyon Hwy. Phoenix, AZ 85017
California
A-Aarkvark Self Storage - 4490 Murphy Canyon Rd. San Diego, CA 92123
North Chester Mini Storage - 700 James Rd. Bakersfield, CA, 93308
Storage Direct Self Storage - 15262 Mojave Dr. Victorville, CA, 92394
Storage Direct Corona - 1790 Pomona Rd. Corona, CA, 92880
Storage Direct Self Storage - 998 Washington Blvd. Roseville, CA, 95678
U-Store Bell - 5427 Clara Street, Bell, CA, 90201
U-Store Hollywood - 6632 Lexington Avenue, Hollywood, CA, 90038-1306
L-K Self Storage - 8150 Tamarind Avenue, Fontana, CA, 92335
Delhi Mini Storage - 10733 Flower St. Delhi, CA 95315
Myers Mini Storage - 16464 Letteau Ave Delhi, CA 95315
Storage Direct Self Storage - 16422 Adelanto Rd. Adelanto, CA, 92301
Storage Direct Self Storage - 16990 Ceres Avenue, Fontana, CA, 92335
Storage Direct Self Storage - 225 S. Carlton Avenue, Blythe, 92225
Storage Direct Self Storage - 9818 DeSoto Avenue, Chatsworth, CA, 91311
Storage Direct Self Storage - 9428 Sheep Creek Rd. Phelan, CA, 92371
Super Storage - 6637 Van Buren, Riverside, CA, 92503
Massachusetts
Burlington Self Storage - 104 W. Grove Street, Middleboro, MA, 2346
Dennis Mini Storage - 349 Hokum Rock Rd, Dennis, MA, 2638
Storage Unlimited Self Storage - 17 Terry Avenue, Burlington, MA, 1803
New Hampshire
Storage Direct Self Storage - 143 Lafayette Rd. Hampton Falls, NH, 3844
Nevada
Storage Direct Self Storage - 590 E. Silverado Ranch Blvd., 89183
Storage Direct Self Storage - 9890 Pollock Dr. Las Vegas, NV, 89183
Summit Plaza Self Storage - 4375 E. Sahara Avenue, Las Vegas, NV, 89104
Malibu Valley Self Storage - 4866 E. Russell Rd. Las Vegas, NV, 89120
Storage Direct Self Storage - 4349 S. Jones Blvd. Las Vegas, NV, 89103
Texas
Storage Direct Self Storage - 9420 Spectrum Dr. Austin, TX, 78717
Storage Direct Self Storage - 945 W New Hope Dr. Cedar Park, TX 78613
Virginia
Storage Direct Self Storage - 3318 Old Bridge Rd. Woodbridge, VA, 22192
At A Glance
Investment Strategy: | Buy and Hold |
Hold Period: | 3-5 years |
Total Budget: | $2,066,600 |
Property Type: | Self-Storage |
Net Rentable Area: | 53,150 square feet |
Distributions to Realty Mogul 21, LLC: | 8% preferred return with excess cash flow and appreciation shared 65/35 |
Investment Details
DealPoint Merrill ("DPM") and Platinum Storage Group ("Platinum") (collectively, "the Managers") plan to acquire, improve, and lease-up American Mini Storage, an 53,150 square foot, 458-unit, self-storage facility located in an in-fill location outside Tucson, Arizona less than one mile from the Interstate 10. The property is currently 61% leased and is being purchased as a bank owned REO property at an estimated 10-15% discount to today's market value.
Realty Mogul investors have an opportunity to invest in Realty Mogul 21, LLC. Realty Mogul 21, LLC will subsequently invest in a new entity setup by the Managers, which will hold title to American Mini Storage. Investor distributions are projected to start after the first quarter post-closing.
The Managers plan to increase occupancy from 61% to 85% via proactive management, a replenished capital structure, and an updated internet marketing plan. The strategy is to renew expiring tenants and lease up the remaining vacancy by aggressively marketing the property using three (3) approaches:
- Develop a state of the art website
- Utilize search engine optimization techniques to drive traffic to the website
- Hire a nationally-recognized self-storage management company (Platinum Storage) to pursue commercial and residential tenancies
The occupancy rate is projected to improve gradually over the 3-5 year holding period and reach 80% by year three (3). The Managers also intend to implement a high impact lighting and signage plan as part of the rebranding and marketing effort, in addition to creating new storage income streams by installing a covered parking structure for boats and RVs. The property currently has 52 RV spaces and has room for an additional 50-60 stalls to be developed on the excess land for covered RV and boat parking, which have the potential to add $90,000 a year in new rental income. This additional rental income is not included in the financial projections. The property has also been approved for expansion with an additional 18,500 square feet of gross storage are which, if built, will replace the existing 52 RV spaces.
Platinum Storage Group ("Platinum") will be retained to manage the day to day operations of the property. Platinum is currently the 8th largest self-storage operator, with approximately 25,000 storage units and 3.3 million square feet of storage space under management across approximately 45 properties in 7 different states. Platinum has an ownership stake in 25 out of the 45 properties.
The Managers plan on holding the property for 3-5 years before exiting the investment, although the hold period may be longer or shorter. Realty Mogul investors have the opportunity to participate as equity stakeholders and earn a share of the cash-flow and appreciation. Investors can expect to receive quarterly updates and quarterly distributions, with the first distribution expected after the first quarter post-closing.
American Mini Storage represents a unique opportunity to invest in a self-storage facility located in an in-fill location that is being acquired at a significant discount as an REO property and invest alongside a highly experienced operator and management team. The property has existing, in-place cash flow while also offering investors significant value-add potential through improved occupancy and the development of entitled expansion space that would increase both the net operating income and sales value of the property.
Investment Highlights
- Value Add Off Market Purchase of an REO Property: The property is being purchased at a 10-15% discount to today's market value from a lender through an REO sale. The discount from market value is supported by a third party broker opinion of value and is significantly below the historical 2007 appraised value of $4.7 million. To view the broker opinion of value click HERE.
- Immediate Upside In Occupancy Growth: Through pro-active management, a replenished capital structure and an updated internet marketing plan, the Managers plan to increase occupancy from 61% to 85%, significantly increasing the revenue of the property.
- Additional Potential Upside from Expansion: The property has been approved for expansion with an additional 18,500 square feet of gross storage space and there is additional room for 50-60 stalls to be developed for RV and boat parking, which has the potential to add $90,000 a year in new rental income for estimated capital costs of only $50,000.
- Experienced Management and Alignment of Interest: DealPoint Merrill ("DPM") is an owner and operator of value-added and redevelopment assets, as well as the sponsor of real estate co-investment offerings. The executives of DPM have acquired over $2 billion in assets and attracted over $1 billion in equity for commercial real estate investments. Platinum Storage Group ("Platinum") has the 8th largest self-storage owner-operator in the country, with a portfolio of over 45 self-storage properties (ownership stake in 25 properties) across 7 states, including Arizona. Both DPM and Platinum will be investing in American Mini Storage.
- Outperforming Asset Class: Over the last several years, the self-storage sector has generally outperformed most other commercial asset classes. Self-storage has been a consistent performer throughout economic cycles and is known for being healthy in strong economies and resilient in downturns. The sharp decline in new supply growth in recent years has resulted in historically high net absorption rates, putting upward pressure on rents. Operating fundamentals and investor interest are resilient due to the wide array of demand drivers supporting the industry. Self storage has managed to maintain stable occupancies throughout the economic downturn. The sharp decline in new supply growth in recent years has resulted in historically high net absorption rates putting upward pressure on rents. Roughly 50,000 self storage facilities are in existence today. From 2009–2012 average annual new supply was only 2% of existing stock vs. 6% per year from 1994 – 2008. As evidenced by the outperformance of the public self storage sector vs. most other real estate asset classes during the economic downturn, operating fundamentals and investor interest are resilient due to the wide array of demand drivers supporting the industry. In addition, the declining US home ownership rate (which fell to 65.3% in 3Q13, down from a peak of 69% in 2004) and the large number of renters, who move on average every two to three years, continues to drive storage demand.
Risks and Risk Mitigation*
- Lease-up of Vacant Space: The property is currently only 61% leased. In order to increase occupancy to the planned 85% level, several existing tenants will need to renew their leases and a significant number of other tenants will need to sign new leases. However, through pro-active and experienced management as well as accompanying strong market area and demand drivers, DPM and Platinum believe that they will be successful in significantly increasing occupancy at the property to the projected levels. Additionally, the property is being purchased as an REO property at a price that DPM and Platinum believe represents a significant discount to current market value.
- Illiquid Investment - Transfer Restrictions & No Public Market: The transferability of membership interests in Realty Mogul 14, LLC are restricted both by the operating agreement for that entity and by U.S. federal and state securities laws. In general, investors will not be able to sell or transfer their interests. There is also no public market for the investment interests and none is expected to be available in the future. Persons should not invest if they require any of their investment to be liquid. This is particularly important for persons of retirement age, who should plan carefully to assure that their assets last throughout retirement.
- Possible Decrease in Rents or Occupancy: Another risk associated with this transaction is the potential occurrence of a significant decrease in rents or occupancy; if enough effective vacancies occur, the property may not generate sufficient funds with which to meet any required loan payments and operating expenses.
- Rising Interest Rates and General Economic Conditions: The real estate investment market has been bolstered over the past few years by historically low interest rates. This trend is likely in the process of changing course, however, and rising interest rates may adversely affect future property valuations and the ability to obtain any necessary refinancing.
- Interest-Only Financing: This transaction employs interest-only financing. By delaying principal payments, interest-only mortgages can make refinancing more difficult at maturity and increase risk of the investment opportunity.
*The above is not intended to be a full discussion of all the risks of this investment. Please see the Risk Factors in the Investor Document Package for a discussion of additional risks.
Address: | 7020 N. Camino Martin, Tucson, AZ 85741 |
Years Built / Renovated: | 1998 / 2005 |
Current Occupancy: | 61% |
Net Rentable Area: | 53,401 square feet |
Total Units: | 458 storage units - 268 climate controlled - 190 non-climate controlled 52 uncovered RV spaces 1 office space |
The property was originally constructed in 1998 and consisted of 37,200 square feet but was further improved with an additional 16,800 square feet in 2005. The property consists of eight (8) buildings located on a 3.8-acre lot. The property conforms well to the surrounding neighborhood infrastructure and support services. The rental spaces include 268 climate controlled units, 190 non-climate controlled units, plus 52 uncovered RV spaces and 1 office space.
The property has been approved for expansion with an additional 18,500 square feet of gross storage area which, if built, will eliminate the 52 RV spaces. The property has surplus land that is available for immediate development. The office sits at the end of one of the storage buildings and is approximately 1,200 square feet in size. There is no manager apartment.
UNIT TYPE | SF | UNITS | TOTAL SF |
---|---|---|---|
RV Boat 3 | 0 | 50 | 0 |
RV Boat 2 | 0 | 1 | 0 |
RV Boat 1 | 0 | 2 | 0 |
5X5CC | 25 | 33 | 825 |
5X5AC-2 | 25 | 2 | 50 |
5X7CC | 35 | 10 | 350 |
5X10CC | 50 | 56 | 2,800 |
5X10DU-1 | 50 | 29 | 1,450 |
5X13 | 65 | 4 | 260 |
5X15CC | 75 | 2 | 150 |
5X15S-1 | 75 | 2 | 150 |
8X10CC | 75 | 2 | 150 |
8X15CC | 112 | 2 | 225 |
10X10CC | 100 | 86 | 8,600 |
10X10DU-2 | 100 | 65 | 6,500 |
10X13 | 130 | 3 | 390 |
10X15CC | 150 | 69 | 10,350 |
10X15CC-2 | 150 | 2 | 300 |
10X20C-1 | 200 | 8 | 1,600 |
10X20C-2 | 200 | 5 | 1,000 |
10X20SS | 200 | 38 | 7,600 |
10X25S-1 | 250 | 2 | 500 |
10X25S-2 | 250 | 36 | 9,000 |
30X30 | 900 | 1 | 900 |
TOTAL | 510 | 53,401 |
A management operations history and two self storage market reports are attached below the map on the right hand side of this page for reference.
American Mini Storage is located outside of Tucson, Arizona, approximately 0.7 miles east of the Interstate 10. The facility is 0.2 mile from West Ina Road, which is a thoroughfare with a high traffic count. A board sign at the corner of West Ina & North Camino Martin lists some of the businesses located on North Camino Martin, with "American Mini Storage" located at the top of the sign.
Tucson Area Overview
Tucson is Arizona's second largest city behind Phoenix. The 2010 U.S. Census puts the city's population at 520,116, while the 2012 estimated population of the entire Tucson metropolitan area was over 900,000. Tucson have made an effort to attract advanced technology industry sectors, and Raytheon Missile Systems, Texas Instruments, IBM, Intuit Inc., Universal Avionics, Sunquest Information Systems, Sanofi-Aventis, Ventana Medical Systems, Inc., and Bombardier Aerospace all have a significant presence in Tucson. Many new business sites have also recently sprung up in the downtown area.
The University of Arizona, which has an enrollment of over 40,000 students is located in Tucson and one of the largest employers in the city. The Davis-Monthan Air Force Base, located within Tucson, and the presence of the US Army Intelligence Center located in nearby Fort Huachuca, has led to the development of a significant number of high-tech industries, including several government contractors, in the area. Other significant employers include Raytheon Missile Systems, the State of Arizona, Walmart and Tucson Unified School District. The city of Tucson is also a major hub for the Union Pacific Railroad's Sunset Route that links the Los Angeles ports with the South/Southeast regions of the country.
Self-Storage Overview
According to Cushman and Wakefield, a prominent national real estate firm, a large part of the appeal of self-storage facilities compared with other real estate investments is that costs can be relatively low. For example, the break-even occupancy rate for a self-storage facility is often in the 40-50% range, compared to 60% or more for apartment buildings. Consequently, self-storage facilities tend to hold value better and recover faster than other assets when real estate markets sour. A recent analysis by Cushman & Wakefield reviewed the total annual returns of the five property sectors from 1994 to 2012 and concluded that self-storage had the highest returns over 5, 10 and 15-year averaged periods.
Tucson Self-Storage Overview
There are six (6) competing self-storage facilities within a few miles of American Mini Storage. The Managers believe that the market occupancy for comparable properties is higher than 80%, which American Mini Storage is not projected to reach until year three (3) in the pro forma.