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LAS VEGAS-Equity Based Services Inc., a San Diego-based owner of self-storage facilities, has acquired another asset here, paying $9.7 million for Silverado Self Storage, an 84,200-sf (net rentable) facility, that EBS will rebrand as American Mini Storage. Troy Downing, a principal and fund manager with EBS, tells GlobeSt.com the capitalization rate on the purchase is approximately 7.52% based on current NOI.

While Las Vegas has been getting negative press lately Downing says self storage deals still make a lot of sense because the product type has historically performed well in down economies. Silverado is the company’s seventh self-storage asset in the region. “Being a contrarian investment…we expect Silverado to have an above average return in cash flow immediately and we believe there is a high potential for above average appreciation when the Las Vegas real estate markets recover,” he says.

In addition, Downing says the property benefits from multiple revenue streams; they include 625 climate-controlled storage units, 26 RV parking spaces, a cellular tower and a three-sided billboard facing the highway. “Silverado is one of the better positioned assets that we have added to our portfolio this year in terms of cash flow, stability and upside potential,” he says.

Equity for EBS acquisitions comes from EBS’ closed Private Equity Income and Growth Funds, 1031 Exchange Investors and EBS’ existing private client cash investors. The acquisition financing included a floating interest rate loan with “a significant interest-only period,” according to EBS. “We experienced a huge demand to participate in this project from our cash investors and from our 1031 Investors,” Downing says.

The selling entity, Silverado Self Storage III LLC, includes three Vegas-based investors, including Fred Lessman of Fieldstone Investments and Perma-Bilt Homes, Philip H. Davis of PHD Properties, and Philip J. and Ted Weisman of PDT Associates.

EBS expects to close four more deals totaling $80 million before the end of 2008. Downing says the company is currently under contract to purchase facilities in Las Vegas, Texas and South Carolina.

Currently in Las Vegas, in addition to its latest asset, the company owns six additional self-storage facilities, five of them branded as American Mini Storage and a sixth called Storage Inn. All told, the company owns 60 properties in 10 states. All properties are managed by All American Property Management Inc., an EBS company.

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