Investment Strategy-Mission

Soquel StoreMore, LLC was created for the sole purpose of acquiring, entitling, building and holding a high quality self storage investment property in the Soquel area of Santa Cruz County on a long term basis. We will be raising $1,700,000 to fund this project.

The selection of a “development” strategy was determined for several reasons. First of all, the opportunity to purchase developable property where we can build 80,000 square feet or more is rare. Secondly, the incremental equity increase (development profit) which a development scenario creates would not be taxed upon completion, because we are not proposing to sell the project for many years. Finally, by designing and developing our own project we are able to incorporate contemporary amenities, energy efficiency and fit the unit mix to the market. Ultimately, we will own and operate the new project in conjunction with the existing Watsonville StoreMore America Phase I & II and Aptos StoreMore America.

The key to being able to accomplish a project of this nature lies in understanding how to create value by entitling this new project for at least 80,000 gross square feet and incorporating huge economies of scale by operating this new facility as part of the StoreMore America brand.

Regulatory & Land Use Overview

Historically, the flat Marine Terrace surrounded Soquel Drive between the Village of Soquel and the City of Santa Cruz was rural residential in nature. Through the last century, the area transitioned to various commercial and quasi commercial uses with Residential uses intensifying in most areas as it was re-developed.

The emergence of 41at Avenue as a major retail, business and professional arterial together with intensifying residential development and accompanying increases in traffic combine to create a major redevelopment opportunity in this neighborhood.

The recent failure of Home Depot to gain approval to develop this site and their subsequent success in the City of Watsonville has created an embarrassing political tax loss situation for the County of Santa Cruz. The County has long viewed the auto dealers just over the freeway in Capitola with a covetous eye yet been unable to achieve any of the type of development which would yield incremental sales tax revenue like that which the City of Capitola enjoys.

Our development proposal not only embodies incremental sales tax revenue from a new Honda dealership but also offers two new very desirable projects that will kick start the redevelopment engine in this area and the Honda dealership. Additionally, StoreMore America has a terrific reputation for doing quality projects in the county and the members of the County Board of Supervisors will likely support our efforts.

Finally, impacts to adjacent residents of the mobile home park will be reduced and they will likely support this use because the self storage buffers them from the more intensive auto dealer and is a “best case” development alternative.

Demand and Price Equilibrium

The most recent self storage project built in Santa Cruz County is StoreMore Aptos (35,000 square feet). Immediately prior to the completion of StoreMore Aptos, the other competitors in the county built new self storage projects totaling more than 235,000 square feet. To date, all of this new space has been absorbed – up to 90% occupancy and at record rates. Not surprisingly, strong demand from both existing users and new customers has driven this market. Top dollar rates go to new projects completed in the market area since late 2000. We are not aware of any proposals or applications for any new self storage projects at the present time.

When completed in 2006, the Soquel StoreMore will be the first new project built in the market area in 6 years. Based upon our experience at Aptos, we believe that demand and rental achievement will be tremendous. We anticipate that 80,000 net square feet (minimum) will be absorbed over a 36 month period of time (25,000 square feet/year average) at rates averaging in excess of $1.30 per square foot.

The Property

Being a two acre rectangular portion of a larger 6 acre – flat property on the North side of Soquel Drive- this parcel is located about 100 yards west of the intersection of 41st Avenue and Soquel Drive.

Highly visible from 4 lanes of traffic, the site is an opportunity to create a gorgeous façade - 3 stories high with a 60,000 +/- square foot building behind. Phase II will be a minimum 20,000 square foot +/- building located behind the first building.

The excellent location combined with superior topography and size makes this a unique opportunity to develop a signature Self Storage Facility with the StoreMore America brand.