Self Storage is a very attractive real estate asset.
Could be purchased at reasonable cash flow valuations.
Not capital intensive
• Long lived buildings with low maintenance cost
• Lease turnover requires little landlord capital spending, unlike other real estate assets:
• Tenant improvement allowances and leasing commissions (office, retail, industrial)
• Refurbishment costs (apartment)
Consumer and Business Tenants
• Short term leases
• Raise rents at tenant turnover
• Raise rents to existing tenants at CPI or greater
• Consumers have emotional connections to storage
• Businesses achieve profitability gains with Storage
Effective Management Correlates to Profitability
• Direct marketing to consumers and businesses
• Customer service produces results
• Efficient technology improves customer relationships
Competitive cash returns, not a long-term land play