Relationships Need Space

Extra Space Storage’s Kirk Grimshaw on building relationships as the company continues to diversify

Kirk Grimshaw, Vice President and Legal Counsel, Extra Space Storage Photo by Heidi Grimshaw

As the second largest operator of self-storage properties in the country, Extra Space Storage’s footprint encompasses more than 1,600 stores in 39 states, with more than 910,000 individual units and 103 million square feet of rental space. The company continues to diversify its business interests with a joint venture partner initiative and short-term bridge loan project that vice president and legal counsel Kirk Grimshaw says are both based on strengthening relationships with the company’s partners. Building relationships inside and out of the company is evident in the company’s inclusion on Glassdoor’s 2018 Best Places to Work as well as Utah Business magazine’s Best Companies to Work For.

Grimshaw, who himself was previously heralded as one of “Utah’s Legal Elite” by Utah Business magazine, says that the company’s focus on partnerships is ideal for his own approach to law. “One of the things I really like about structuring and negotiating business transactions is that, at the end of the day, all parties to the deal feel they have benefited from the relationship,” Grimshaw says. “Whether the transaction includes the buying or selling of a property or entity, the structuring of a loan or credit facility, the creation of a new joint venture arrangement, or any other business deal, when all parties profit, the association was successful.”

The VP says that transactional law has been his passion since law school. “Litigation and courtroom drama did not interest me as much as creating new business opportunities,” Grimshaw says. After extensive firm roles, Grimshaw went in-house at Extra Space Storage in 2016 and has subsequently spent his time endeavoring to be what he calls a “deal doer.”

For Grimshaw, that means working to overcome typical assumptions of what legal does. “Many times, I hear complaints that attorneys slow down transactions,” Grimshaw says. “Instead, I always have the goal to help grease the wheels of the deal and move the transaction along while still protecting Extra Space’s interests.”

Grimshaw has helped keep the company busy. One of the ways the company is acquiring new storage properties is with the help of joint venture partners. Extra Space Storage forms a new company with a partner, with each injecting a portion of the capital needed to purchase the new facilities. The new company then owns and holds the storage properties that Extra Space manages. “This allows us to increase our footprint and number of storage facilities with less required upfront capital,” Grimshaw explains. “At the same time, our new joint venture partner receives a solid return on its investment as well.”

Grimshaw says that the new deals have been so successful that negotiating the joint ventures has increasingly become one of his more central roles. At the time of writing, Grimshaw is working on three separate new partnerships.

A new business opportunity for Extra Space Storage has arisen in the form of short-term bridge loans that allow the owner or developer to recover initial invested capital prior to reaching stabilization, a process that can sometimes take years. “Many times, the owners and developers of storage facilities are not able to obtain permanent financing with good terms during the gap period after construction but before the facility is fully leased up,” Grimshaw reveals. Extra Space Storage loans money based on the property’s value rather than just the cost to construct, which Grimshaw says makes the Extra Space loan program different from most other lenders. “This higher value allows the borrower to obtain from us a higher amount of loan proceeds in order to increase the borrower’s return.”

In exchange, Extra Space Storage manages the storage facility for the owner. “We believe and hope these loans will strengthen and deepen our relationship with these partners, investors, and developers,” Grimshaw says. One of the significant pipelines for Extra Space Storage to accumulate properties is to buy from owners for whom they already manage properties. Should those owners decide to sell, they’ve already developed a strong partnership with Extra Space. “We want to be a one-stop shop for our partners, investors, and developers in the storage industry,” indicates Grimshaw.

Grimshaw’s own approach to his job was modeled for him early in his career. Fresh out of law school, the young lawyer found himself admitting a drafting error to his senior attorney boss that could have cost the client additional thousands. Instead of lashing out, Grimshaw says his boss elected to work with his protégé to renegotiate and revise the contract pro bono. “Since learning that great lesson, I have always chosen to concentrate on working together to find solutions rather than focusing on placing blame,” Grimshaw says.

Strong relationships also endure inside the company, Grimshaw says. “One of the things that I love about the Extra Space culture is that the people here really live and act upon our company’s values of integrity, excellence, innovation, teamwork, and passion,” Grimshaw says. “They not only demonstrate these high moral standards while at work in the office—the people at Extra Space live them all the time.” When he’s watching a sports game at home, it’s his work colleagues that Grimshaw finds himself texting or calling to see if they saw that last great play. “It’s moments like that,” he says, “when you realize that these are my real friends.”