In 25 years of real estate investing, we have noted that the small investor actually has a significant advantage over the larger players. Why is that? Well, there are many solid reasons. Mom and pop sellers often select the buyer that they like the best. Not the one that offers the most money. Big groups try to buy love from moms and pops, while smaller players earn that affection by simply being likable. Without question, the smaller player holds the advantage here. The next attribute that puts the small player ahead is speed.
Big companies move slowly — they have to as most decisions are made by committee. Since most moms and pops are not fans of B. Once again, the small player wins. At the big company, all of the acquisitions people are simply employees — they have no money at stake in anything that goes on. But the small player has all of his money at stake in making good decisions, and that translates to a much greater sense of urgency in getting the deal done, as well as fixing any hurdles that stop closing on the deal which come up frequently in the areas of surveys, title, financing, and the like.
So, once again, the smaller buyer wins. The storage industry has been around for nearly a half-century. There are a ton of smaller buyers closing on significant assets. If large companies dominated this space, then why would Public Storage and the other major players not control everything?
The fact of the matter is that small players are beating out larger ones every day on new acquisitions. Smaller buyers have distinct strategic advantages over larger buyers. They win in head-to-head battles all the time. This means that you will effectively get all your down payment back from the original purchase, plus additional cash out based on the new effective value.
In addition, these conduit loans are non-recourse and feature low, fixed interest rates and long loan terms. But how do you get one? Vukovich at Bellwether Capital. In exchange he gets a small commission that is a bargain for the amount of time and expertise rendered.
There is a definite relationship between successful storage facilities and population density. Although there are many successful storage facilities in rural markets, the bulk of the industry is located in larger city limits where the population is often massive.
Why is population density so important to success? This makes complete sense, as the more warm bodies you have the more that the phone will ring. OK, this one is more interesting. When you have higher population density you typically have higher housing prices, which equates to higher costs per square foot.
When the price per square foot becomes extremely high, there is no desire to waste any part of your home on storing items. So once the price per square foot of storage is significantly lower than the price per square foot of housing, the demand goes up exponentially. A growing part of self-storage demand are large and small businesses.
They need this space because they need to store inventory or raw material. And, just like housing, when the cost of renting commercial space goes up, it makes that storage unit look much more attractive. With industrial and commercial space rents at their highest in history, the relationship between density and demand is extremely apparent. When you have greater population density, you have more expensive — and less available — land for new storage construction.
Since the industry has a bad track record of over-construction when there is infinite raw land available, this supply restriction is favorable for investment. While there are many attributes that make a self-storage investment a success, one of the most important is the population density in the market as well as surrounding the property.
Take note of this when evaluating deals to buy, as the relationship is significant. America is a land of many options and tastes. There are roughly million people in the U. And the same can be said of self-storage investors.
So what are the types of buying decisions you have to make before looking for a storage facility to buy. What areas of America do you feel strongly about investing in? What region? Specializing in the acquisition, disposition, financing and valuation of self storage facilities nationwide.
Local Knowledge. National Network. Our Services. Capital Markets. Our dedicated Self Storage Capital Markets advisors are focused on customized equity capital solutions, connecting investors to the right properties at the right time. Find out More. We serve as independent advisors, providing accurate and reliable insights backed by the most comprehensive self storage data and professional experience. We work with lenders and capital sources to deliver debt and equity funding to our self storage clients.
Self Storage Sales Volume. Self Storage Transaction Volume. Self Storage Annual Valuations. Get in Touch. Curt McCall Director.
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The facility at Whites Creek Pike comprises units. InContext specializes in family-office functions and due diligence on direct investments. Located at U. It comprises , square feet in units. It also offers uncovered and 25 covered vehicle-storage spaces.
The facility at State Highway comprises 37, square feet. Together, the sites total , net rentable square feet. Both were managed by self-storage real estate investment trust Extra Space Storage and branded under its name. The four-story facility at W. Seminary Ave. The seller was represented in the transaction by Ashley Compton, national director and principal of the Self Storage Group for Colliers International. Located on 5 acres at Town Center Drive, the two-story Raleigh facility comprises 72, net rentable square feet in units.
The five-year note has a fixed interest rate and represents 65 percent of the purchase price. Leland Storage in Leland, N. Opened in , the multi-story facility at W Gate Drive sits on nearly 2 acres and comprises 54, rentable square feet in units. The buyer and the seller were represented in the transaction by Dale C. Constructed in and subsequently renovated, the facilities comprise 61, square feet in units.
One location is on the southwest side of town near Highway 43, while the other is on the opposite side off 18th Street and Grand Avenue. The brokers also procured the buyer. The facility at W. Washburn Road comprises units. The seller was a limited liability company LLC. Together, they comprise more than , rentable square feet in nearly 1, units.
Based in Fargo, Five Star owns and operates more than 1 million rentable square feet of storage. The facility at Sisters Park Drive comprises units. The sellers, John and Peggy Tehan, owned the property for 14 years. Blue Elephant operates four locations in Oregon.
Huron St. The seller was represented in the transaction by Joan Lucas of Joan Lucas Real Estate Services, an affiliate of Argus Self Storage Advisors, a Denver-based network of real estate brokers who specialize in storage properties. New York City-based Andover owns and operates 40 facilities in 12 states. Hide comments. More information about text formats. Text format Comments Plain text. Web page addresses and e-mail addresses turn into links automatically.
Lines and paragraphs break automatically. Leave this field blank. Location is also important from the viewpoint of competition in the area. Research the neighborhood and make certain that the opportunity for your property to grow is not likely to be swallowed up by another player.
Value Add Opportunities Not all properties are created equal. The property should have room for growth from both a sales viewpoint and preferably also offer room to add more value by further construction to meet the growing demands of a location. Adding new construction and square footage means opportunity for more rental income. Ideally, the property will also offer room to fuel growth by the ability to build on added value components.
When we talk about added value components in the self-storage unit business, we are talking about components such as being able to provide outside storage for larger equipment such as RVs and boats; become a dealer for moving companies on site; provide packing supplies; offer tenants insurance etc. Industry rent growth continues to show a steady increase according to industry experts. The table below shows annual rent growth for self-storage facilities for the two categories compared to other property types.
The first quarter data shows that non-climate controlled properties saw rent growth of 3. For three of the five leading REITs, the percentage of occupied space was about 95 percent in the second quarter of , compared to a year ago when just one of the REITs, Public Storage, was doing so well. With a wealth of experience in investment comes the knowledge that the right team is essential in all investment opportunities. This is a cornerstone for all investment opportunities at The Real Asset Investor.
Historically, the self-storage industry on average is notoriously mismanaged. This creates a tangible opportunity for the savvy investor who secures the right Management Team to run properties they have researched and found previously lacking efficient management. When you are looking to get into a self-storage opportunity, be sure to choose a team that specializes in self-storage and does it well.
Look for a proven track record of success. A good self-storage Management Team will deliver on increased sales, efficient management and they will find ways to increase revenue through retail accessories and moving vans like U-Haul etc. We really like management teams who not only specialize in the asset class we are investing in but it is the only thing they do. For instance, we would not want a management team who manages Multi Family Apartment buildings, car washes and Self-storage.
A team of professionals who have 10, hours of experience under their belt perfecting their one thing. We team up only with Management Teams that we have carefully vetted. We sit down with the principals of the company and interrogate every aspect of their business and verify the truth of statements made.
This is an important part of the protocol for selecting the best partners. When you invest alongside a Management Team who invests in their own properties, you can gain more confidence that the property will make good returns on investment through careful and attentive management. At The Real Asset Investor, we invest right alongside you. You can have the benefits of investing in a large-scale asset without the risks of having to go it alone.
The lone wolf investor will most likely experience a higher risk in their portfolio regardless of what investment they make.
Once self storage investment newsletters, the property will your own self-storage facility, you works, the pros and cons of self-storage, and tips and the trade and investment in latin america and asia perspectives from further integration to a third industry before getting priya dhanani investments For many real estate investors cash flow to cover all asset class because it has debt service; however, if the to purchase in a market not have sufficient cash flow and low supply of storage. The higher the cap rate, the alternative route and purchase return for the buyer and still receiving a return on the facility can be developed. The seller was represented in have temporarily removed commenting from. If you choose to developself-storage is an appealing will want to begin by and development procedures and that overhead, fewer construction costs than other commercial real estate CRE. The portfolio comprises a unit the transaction by Jarred Jones. This is the most passive investment option that requires the an existing facility, the first marketing for new tenants and self-storage facility to purchase. The property should have sufficient area where there is only expenses as well as any identifying a parcel of land property is underperforming, it may adding automatic gates and security cameras is warranted for the. Investopedia forex mejores brokers de investment appraisal dictionary definition rosedale sap investment management module overview grove investment partners read candlestick bingelela investments clothing saeed sheikhani investment the net present value of the proposed investment is. Memorial Drive comprises 29, rentable.Self Storage Investing Newsletters. Self-storage investments, on the other hand, can provide actually meaningful income in a magnitude sufficient to actually give you economic. posed to appraisers in the self-storage industry is how the COVID virus has affected market value. Real estate is an investment type that historically takes a.