In the competitive self storage industry, particularly in the bustling markets of Arizona, Nevada, and Utah, maintaining high occupancy rates is crucial for profitability. The unique characteristics of these Southwestern states present both opportunities and challenges for self storage facility owners. This blog post will delve into effective strategies to help you maximize occupancy in your self storage facility, ensuring your business thrives in these dynamic markets.

In the competitive self storage industry, particularly in the bustling markets of Arizona, Nevada, and Utah, maintaining high occupancy rates is crucial for profitability. The unique characteristics of these Southwestern states present both opportunities and challenges for self storage facility owners. This blog post will delve into effective strategies to help you maximize occupancy in your self storage facility, ensuring your business thrives in these dynamic markets.

Donnie Dodson of Keller Williams East Valley has arranged the sale of Rim260 Storage In Star Valley, Arizona. The self-storage facility sold March 6, 2024, for $1,200,000. The property spans 1.37 acres, 20,709 rentable sf and provides 44 spaces of self-storage and 39 RV parking spaces. Donnie Dodson represented the Seller.

Jeff Gorden of The Gorden Companies/Keller Williams East Valley has arranged the sale of Valley Mini Storage in Phoenix, Arizona. The self-storage facility sold December 6, 2023 for $11,100,000. The property spans 1.14 acres, 61,300 rentable sf and provides 770 spaces of self-storage. Jeff Gorden represented the Seller.

Jeff Gorden of Keller Williams Commercial has arranged the sale of Ourspace Storage in Wellton, AZ. The self-storage facility sold November 17th, 2023 for $1,045,000. The property spans 11,150 in existing RSF and provides 165 existing spaces of self-storage. Jeff Gorden represented the Seller of the storage.

Jeff Gorden of Keller Williams Commercial has arranged the sale of GuardAll Self Storage in Kingman, AZ. The self-storage facility sold September 18, 2023 for $6,500,000.The property spans 1.3 acres and provides 409 spaces of self-storage. Jeff Gorden represented the Seller.

Jeff Gorden of Eagle Commercial Realty Services has arranged the sale of F&R Grand Avenue Mini Storage in Peoria, Arizona. The self-storage facility sold February 20, 2018 for $2,140,000. The property spans just over one acre and provides 338 units of self storage. Eagle Commercial represented the California based Seller. An international self storage investment group won the deal.

Jeff Gorden of Eagle Commercial Realty Services has arranged the sale of Concho Mini Storage in Concho, Arizona. The self-storage facility sold January 5, 2018 for $225,000. The property spans two acres and provides 117 units of self-storage. Eagle Commercial and represented the Seller. An Arizona based buyer presented the winning offer.

Eagle Commercial Realty Services is pleased to announce the sale of American Mini Storage in Sierra Vista, Arizona. The self-storage facility sold December 19, 2017 for $5,450,000. The property spans just over six acres and provides 846 units of self-storage and over 100 spaces for vehicle storage.

Jeff Gorden sets a new sale price record with the sale of Eagle Canyon Storage in Phoenix, Arizona. The self-storage facility, formerly known as Camelback Self Storage, sold December 18, 2017 for $17,500,000 which becomes the new high watermark for a single self-storage property in Arizona.

The owner of this two property mini storage portfolio contacted with us in the fourth quarter of 2016. He was the original developer of the properties from the mid-80’s and was beginning to consider retirement. For years, his properties had produced consistently high levels of occupancy and cash flow, but there were yet challenges that this portfolio presented. First, the size of the market was not great enough to attract large groups, while at the same time the size and valuation of the portfolio was beyond the means of most local operators. Second, the management records used at the facilities were a tried and true, yet antiquated, paper ledger system. This made delivery of historical records, specifically occupancy and month-by-month analysis, a challenge and gave reason for extra scrutiny by potential buyers and lenders.

The Seller of this institutionally sized self storage facility was the original developer and operator of the property from its initial development seventeen years ago through several phased expansions. We had been providing advisory and market intelligence to this property owner for several years. When conversations turned to those of retirement, we were the logical choice. No other broker had successfully sold similar property in this market for over a decade. The performance of the facility had been strong in the past and performance trends were positive, but we knew that selling this property could be a challenge. While larger operators may pass over this market due to size and population, smaller operators may pass over the property due to the size and price. It was truly a Goldilocks’ assignment.

The owner of this small market self storage facility contacted us in in the third quarter of 2016. They were interested in retiring, and after hearing about our national marketing platform and pricing strategy, we won the assignment. Knowing that occupancy and cash flow had been consistently strong over the past year, we immediately began working on a strategy to attract buyers to a town of less than 2000 people.

Our client developed this property in 2006 and had been operating it until the time of the sale. This self storage was an ancillary business for them and its performance was not being maximized. This led to cash flows that were lower than market average and presented a significant challenge in selling the property at the desired price. In fact, this particular facility had been listed a number of times in the past with no success.

When we were contacted, the owner of this ten acre RV & boat storage facility had already received a number of inquiries and unsolicited offers. A familiar situation to us, the seller asked our team for a valuation opinion for the property and if one of our clients could be an interested buyer.

Our client purchased this property as an investment in the early 2000’s and had planned to construct a self storage facility via joint venture with a local developer. Necessary entitlement approvals were obtained; however, just as they were preparing for construction, the economy faltered and with it the plans for construction. The client held the land during the following years, keeping in touch with our team for advisory on the best time to revive the project.

This client had recently begun a process of transition into other other investments markets and, in order to continue this transition, they contacted us about selling this asset. We immediately conducted an analysis of his facility and his competitors and found one big challenge in taking this property to market: his current unit mix included a section that presented a chronic leasing challenge.

The seller of this storage sought out the expertise of our team to help them sell their property within a limited time frame. Our client had a loan maturity coming due and did not wish to refinance as this facility was no longer one of his core assets. The storage had deferred maintenance, the management systems were not computerized, and it was located on a main industrial road with a low household count.

Our client in this self storage sale had delegated the day-to-day management of this asset for many years when outside factors caused him to assume the management responsibility. After some review, the owner decided that market conditions indicated a higher return could be made through a sale vs. taking up to a year to complete a performance reposition. At this point the owner sought out our services. The property consisted of self storage buildings surrounded by a large area for boat & RV storage. It was this configuration that eliminated many institutional buyers from the buyer pool and we knew we would need to identify a special kind of buyer who was willing to venture outside of traditional self storage criteria.

Our client was a repeat customer who had been involved in deals that our team had bought and sold before. The client was interested in liquidating the asset and redeploying capital into other projects. The facility was located in a tertiary market and was not visible from the main highway running through the town. The largest regional bank was also uninterested in lending on the asset, meaning that a potential buyer would have to find financing through another venue.

The sale went through in time for our client to meet their 45 and 180 day windows on the 1031 exchange. Harnessing our expertise in the Arizona market, we were able to familiarize our client with the locale and by the end of the exchange. They had learned a significant amount about the Arizona real estate market. They were ultimately very satisfied with the property they acquired.

Self storage is a unique asset type that requires expert knowledge to properly represent in a sale. This particular property was located in a smaller community and was self-managed by the sellers who wanted to retire and do more traveling. Since the sellers desired a clean break from the property, we needed to have solutions available to the prospective buyer for the management and financing of the property. By anticipating and solving for these challenges, we knew we could expand the prospective buyer pool to outside of the local market and get a higher sale price for our client.

Self storage is a unique asset type that can operate successfully in many of different types of markets such as this one which was located in a smaller community and was owner-operated. Our client was looking to retire and so we needed a way for a buyer to step right in and take over the business without interruption.

Our clients were regional investors, owning multiple asset types across the Southwest and specializing in distressed assets and repositioning. They had acquired the storage at a trustee’s sale 9 months prior to seeking out our services to help them maximize exit value of the property so that they could redeploy capital into another asset. The facility was located at a less-than-ideal location (at the end of a cul-de-sac) and was not visible from the main road.

This self storage was constructed thirty years prior to our team listing the property and featured a car wash on one of the corners of the property. Over the years, many of the original partners passed away leaving the managing partner (our client) with heirs as his partners. The management of this new group of investors became a driving factor behind a vote to sell the property. The property was located in Yuma, which could be described as a secondary market of Arizona but a tertiary market by national standards. Though there were solid underlying economic drivers, we had handled properties like this before and knew the routine: sell the market first and the property second.

Our client sought out the expertise of our team to help them sell their mixed-use self storage and business park. The business park was not considered a core asset in their portfolio and they were looking to redeploy capital into an asset closer to their home. The facility was in an older section of the city of Tucson, and due to its mixed-use it did not fit the criteria of many typical self storage investors.

This asset was originally a health club that was converted into a two story, climate controlled self storage in 2008. The owner acquired it in a REO sale, and had possessed it for a few years while completing a number of capital projects. It was not considered a core asset in their portfolio and they were interested in receiving the highest return on investment and deploying capital into another asset. The owner was receiving unsolicited offers, but did not believe those offers represented the true asset value. Due to our team’s prevalence in the asset type, the owner sought out our expertise to represent them in a sale.

This client sought the real estate investment expertise of our team to help acquire an income property leased to a creditworthy tenant on at least a five year lease. The client had specific price and geographic requirements and wanted an asset with both minimal management and maintenance involvement. These requirements limited the pool of properties our team could search within.

Our client approached us to discuss a possible sale of their self storage property. The client owned two self storage facilities, and did not consider this storage facility as a core asset in their portfolio. They had also bought at the peak of the previous business cycle and the location was too far from their homes for them to manage properly. This tasked our team with the challenge of selling the property based on both performance and the price our clients needed.

This property was being sold by a bank acting as a fiduciary for a trust who needed the property sold. The property had a payday loan business as a tenant and the tenant’s business model was about to undergo state wide re-regulation. With these challenges, the bank sought out the real estate investments knowledge of our team to sell the asset for them.

Our team tracks all self storage sales in Arizona and got in contact with our client when this storage sold. After getting in touch with them, it was disclosed that they had originally sold the facility a decade earlier, and defaulted on the buyer that they carried paper for. Our client had originally built the property but with the time lapse, living out of state, and deferred maintenance they did not wish to own it again.

The client owned a multi-tenant retail center in the urban core of the City of Glendale in Arizona. Similar to many properties in the area it featured a mix of small, regional, and single location retail tenants. Our client was from out of state and had improved the asset significantly since purchasing it. Having finished repositioning the asset, our client was looking to make their return and redeploy the capital into another growth opportunity.

This self storage and RV storage property was located in a tertiary market, just outside of the Phoenix Metropolitan area situated on three different parcels, separated by a T-intersection. Our client was the original owner/ developer and had built each phase at different times using different building methods, the oldest of which, was functionally obsolete. The client sought out the expertise of our self storage team to help them capture the highest exit value possible.

Our Client was a fiduciary representing a private institution that had received a property through devise. Our client owned the building, and leasehold estate, but did not have room for the asset in its portfolio. The land is owned by the City of Gilbert, in a long term lease and had rent escalations on it, while the tenant in the building had de-escalations on its rent. In addition to these less than desirable characteristics, the property was also being sold in the middle of the recession and was slightly older than most investors would have liked.

We were approached by our client who was looking to sell their self storage facility. Their note had matured and the bank was threatening to foreclose on the property if action was not taken immediately. The facility featured about 60,000 sq. ft. of self storage space and about 90,000 sq. ft. of RV storage.

The Client owned a single-tenant net lease asset, a former service station that was converted to stand alone retail and leased to a regional car insurance provider. Our client was looking to downsize their portfolio and sought the expertise of our team to help them achieve the maximum exit value.

Self-storage owners have been enjoying an increase in value over the last few months and real estate fundamentals continue to improve. What does this mean for today’s self-storage investors and potential sellers? Click below to read Ben Vestal’s take on the current state of the market and what you can do to take advantage of these unique times!

As a result of Federal capital gain tax rates that are 58% higher compared to last year, 1031 exchange activity is up significantly. According to a recent July 2013 article in the Wall Street Journal, High Impact Tax Breaks, 1031 exchange activity has increased by as much as 50%. Many self storage property owners are experiencing price appreciation. The increase in self storage property prices, coupled with higher tax rates, has resulted in property owners facing a big tax bill. Consequently, whether selling a self storage property or contemplating selling another investment property and exchanging into a self storage facility as a replacement property, more investors are considering 1031 exchanges as a strategy to obtain either full or partial tax deferral…

During Argus’ 19-year history in the self-storage business, the perception about the industry has changed dramatically along with the profile of self-storage investors. Gone are the days when almost all self-storage investors were entrepreneurial, mom and pop investors who looked to benefit from their ability to effectively manage these assets. Today’s investors take a more institutional investment approach. This change in the investor profile has caused the pricing for certain assets to reach historically high levels and many entrepreneurial investors are simply looking elsewhere for compelling opportunities. However, in light of mainstream real estate investors now racing to the self-storage business I believe there are still better opportunities for the entrepreneurial investor today in self-storage than any other real estate asset class…

As the only national brokerage firm that specializes in self-storage properties, Argus is presented with unique market data as it relates to the self-storage investment market around the country. Because of our recent market observations we are compelled to share with you our insight which will allow you to “do what must be done” to reach your investment goals. With more than 19 years of self-storage experience and more than 750 successfully completed self-storage transactions, Argus is the dominant self-storage brokerage firm in the country…

Spring is upon us and so are new opportunities in the self-storage real estate business. Over the years we have experienced the peaks and valleys of the real estate cycle and it is apparent today that we are certainly on the way up, if not at the top. This has allowed many owners, investors and self-storage professionals to enjoy the benefits of the rising real estate values. However, it has occurred to me that many owners and investors simply don’t understand what value a broker brings to a transaction when they are buying or selling a self-storage property.

While self-storage owners are enjoying a surge in occupancies, revenues and most importantly, property values, the U.S. economy continues to work through some messy politics while still registering modest growth. In the face of tax increases and the sequester budget cuts, the U.S. GDP is still on pace to grow around 2% in the first quarter of 2013(1).

Because we are in the business of helping our clients buy and sell self storage properties all around the country, it is often difficult to answer the fundamental question that seems to come up at the end of almost every conversation: What are cap rates today? Unfortunately, most people don’t understand the impact this one simple number has on the overall value of a self-storage property and, more importantly, what goes into arriving at an appropriate cap rate for a property.

It is very clear that the fiscal cliff bill was one of the largest economic and political issues to face the country in more than a decade. It is also concerning that the bill was drafted over a long weekend by sleep-deprived politicians and then agreed to by what seems to be two very adversarial political parties. In short, this solution may only be a Band-Aid for the current issues facing the country as it leaves many big issues unresolved…

The holidays are upon us and optimism is certainly present in today’s real estate market. This includes self storage which continues its Cinderella story, evolving from the “homely stepsister” to the best performing commercial real estate asset class. Let’s take a look at what got us to this point…

This time of year, we find ourselves reflecting on the things that we are grateful for and the people that mean the most to us. Here at Argus, we are most thankful for the men and women who work hard every day to serve the needs of their self storage clients. The Argus Self Storage Sales Network is made up of over 75 self storage professionals (Argus Broker Affiliates) around the country who are helping their clients navigate the buying and selling process.

Everyone has an opinion. This statement has always been true, but in today’s ultra-connected, social media-oriented world, opinions are much easier to share (and harder to erase). Why is this important to self storage operators? The image that you project online is one of the primary reasons that people will choose to rent from your facility. The opinions shared on review sites, social media and even your own online Yellow Pages listing can tell a story about your business…and you want it to be a positive one! Here are some quick ways that you can keep tabs on your facility’s online reputation and manage the image that your customers and potential customers will see…

In last month’s Market Monitor, I described the major factors that owners should consider when evaluating whether or not they are a real seller (Personal Issues, Increased Competition, Capital Gains Tax, and Cap Rates/Ability to Finance). In this same light, I think it is important to review the formula or equation that one uses to arrive at Net Operating Income (NOI) because it is as variable and important as the Cap Rate when calculating value. Many of the smaller self storage operators have drastically different operating expense structures than the larger national operators and therefore there is a larger gap in what some buyers and sellers consider an appropriate net operating income when valuing a property.

Looking back at the first 6 months of 2012, there is no doubt that the real estate transaction market has improved significantly, and along with it, the pressure to overprice properties has increased. This is due primarily to the two most critical factors that affect a fluid transaction market; the ability to finance an acquisition and the buyer’s and seller’s perception of fear or greed in the market.

It’s time for some good news! As the economy slowly improves, we have observed an increase in rental rates and occupancy of self storage properties around the country. It is important to note that there are still some parts of the country that are struggling more than others, and even the improving economy will not solve an ill-conceived project as the market is more competitive today than ever before. Below I have outlined the basics of raising rents and the possible benefits it has to your bottom line. In today’s age of revenue management systems and sophisticated operators, it is more important today than ever to have a plan in place when raising rents!

Typically, a real estate transaction can be described as “one party’s gain is another party’s loss.” There is, however, a very unusual situation that exists where both buyer and seller can win in a transaction. Today, the current economic climate makes this traditional confrontation more accommodating so that both buyer and seller can achieve their goals in a sales transaction without hurting the other party’s position. Clearly, these positive economics do not resolve all of the differences that may occur in a real estate transaction, but, given reasonable expectations and measure of goodwill, the current economic climate will allow buyers and sellers to more quickly find “common ground” where they can both meet their objectives…

While we strongly believe that the performance of self storage as an investment in the long run is quite positive, we have reason to believe that the game has changed. We have reviewed the Q4 same store operating numbers of the four major REITs and have outlined them in the charts below. As you can see, the revenues for all four REITs were up between 3.4% and 5.8%, and more importantly, all four of the REITs showed substantial gains in their NOIs, anywhere from 4.1% to 9.3%. In the “new and improved” self storage real estate market, 90% or more of your value is STILL in the NOI, cash is still king and the ability to attract and capture tenants in cyberspace is now the industry norm…

As we close out February, we are starting to receive positive year-end data from 2011. While the last few years have been difficult for most of the commercial real estate market, self storage proved to be very resilient. All four of the self storage REITS reported same-store gains in Net Operating Income (NOI) from Q3 2010 to Q3 2011 (PSA +9.8%, EXR +7.3%, CUBE +7.9%, SSS +7.9%). The question is, did you enjoy the same increase in your NOI?

As the New Year begins, we are seeing the transaction market show signs of equilibrium which have not happened in the last few years. It appears that buyers have regained confidence; they are being more disciplined with their assumptions and they are willing to move forward with acquisitions that are pushing the envelope of historical underwriting parameters. This is largely due to the increased sophistication of many operators and the overall perception of lower risk in the self storage market today. As seen in the chart below, self storage REIT returns outperformed all other REIT property types last year. The chart is just a snapshot of how the overall industry performed over the last 12 months, but it has added fuel to buyers’ confidence which will continue through 2012…

The last few months of 2011 were markedly different than the first 6 or 7 months of the year, especially for the real estate business and self-storage properties. Liquidity in the real estate debt market slowed in the third and fourth quarters of 2011, led by the CMBS market mid-year, and in general, banks lived up to their “scrooge” reputation by dragging their feet on making new loans.

“I wish buying and selling real estate was easier” is a common sentiment I hear from my clients as they engage in the transaction process to buy or sell a storage facility. Consummating a real estate deal is tough. Besides agreeing on the most salient transaction terms such as price, earnest money, and financing, there are less prominent details that have to be sorted out. One of these items is past due rent – who gets to keep it, the Buyer or the Seller?

In my recent conversations with self-storage owners, I have noticed that the majority are enjoying stabilizing revenues, and in some cases they are also enjoying an increase in revenue over the last 6 to 12 months. Interestingly, most owners don’t realize that they have made or lost money because they are in the real estate business and not the self storage business. While the increase in revenue is creating more cash flow for owners, today the real opportunity lies in the arbitrage that a real estate investor can capitalize on between cap rates and interest rates. Arbitrage is usually thought of as a high finance concept but there are some viable opportunities that might be available in the world of self storage. The term arbitrage means that an investor can take advantage of some pricing or other discrepancies in the marketplace…

If you read the last issue of the Market Monitor, it is apparent that the fundamentals of the self-storage business are sound. With all four of the major self-storage REITs posting positive growth numbers over the same quarter last year it is clear that the industry is poised to move forward. Based on our conversations with self-storage owners, there are three main topics that are on their minds as we close out 2011: Operations – how and what is driving revenues; Investor Activity – who is buying and how are they valuing properties; and Capital Markets – what kinds of loans are available. These three topics are influencing the opportunities in today’s market whether you are a buyer or seller…

The economic and political roller coaster of the last month has been devastating not only to the stock market but also to the overall investment market, including commercial real estate. The fear and greed that motivates investors to take positions either to protect their investments in uncertain times or capitalize on what they perceive as opportunity has been frozen by the overall volatility in the market over the last month.

The availability of commercial real estate capital continues its expansion across all sectors with the CMBS market seemingly running at full steam (although nowhere near the peak in 2007) and life insurance companies already exceeding annual loan volumes year to date compared to recent years. Loan pricing competition is fierce for low leverage (sub-60% loan to value) transactions across all property sectors and higher leverage (75%+ loan to value) loans are generally available for multi-family properties in strong markets, as well as dominant grocery anchored centers and institutional quality multi-tenant bulk warehouse properties. Self-storage and hotels are receiving more attention from conventional lenders, although recent operating history is critical to the underwriting process…

Forecasting economic trends, particularly in real estate, is risky business. However, not paying attention to economic trends such as interest rates, cap rates and overall real estate investor confidence is even riskier. I believe that self storage owners have made or lost more money because they are in the real estate business not the self storage business; even though your self storage business is an extremely reliable income stream. The value of your self storage property is greatly affected by the economic trends that impact the real estate business, more so than the operation of your self storage business. No matter what I tell you or what another real estate broker tells you, it is the real estate market that creates the value for your property – not the listing process!

While the last few years have been very difficult for the self-storage industry, the most positive and productive result of the contracting economy and challenging real estate market was that self-storage operators had to take a very hard look at their operating expenses. This has forced many operators to change their marketing campaigns and go outside their comfort zones to move into the next generation of self-storage marketing.

During the relatively brief history of the self-storage business (35 to 40 years) the perception about the industry has changed dramatically. Wall Street has now embraced the industry and life insurance companies and conduit lenders have come back to the market, enamored once again with lending on self storage properties with terms similar to core asset classes such as office, retail and industrial. Along with the respect that the self-storage industry has earned over the years comes an increase in competition.

There are many ways to enhance your self-storage facility’s Net Operating Income (NOI) including raising prices or lowering expenses by using cheaper service providers. With the recent introduction of reality TV shows like Storage Wars, self-storage operators are rediscovering a tool to improve their NOI by recapturing lost revenue from nonpaying tenants. Historically, the most important outcome of the lien sale was to have the unit emptied so it could be rented to a new customer and most operators recognized that the auctions were not likely to generate much cash…

As we settle in to 2011, it is clear that self-storage values are rebounding along with the values of all other commercial real estate. In 2010, large MSAs like New York, Boston, Los Angeles, Chicago, San Francisco, Houston, and Washington saw the beginning of a rapid recovery in commercial real estate values, much to my surprise. A combination of big portfolio sales and solid returns during the downturn has led both small and large investors back to self-storage as a preferred investment. We have already seen upticks in investor interest in the second tier markets such as Denver, Kansas City, Colorado Springs and Charlotte as the REITs and private equity reach for higher-hanging fruit, and we anticipate this to continue through 2011…

Since the onset of the recession in 2008, millions of Americans have had to adjust to lower personal incomes, job losses, decreased asset valuations and shrinking investment portfolios. Simultaneously, commercial real estate values have plummeted by as much as 40% from their 2007 benchmark highs. With such financial difficulties, many people have simply tried to hang on until better days…

Our Client was acting as a fiduciary for a group interested in selling their net leased office building in Scottsdale, Arizona. The tenants, although both credit worthy, were not committed to long term leases. One tenant was a branch from an out of state bank, and the other was a department of the City of Scottsdale in a sublease.

Our Client was a fiduciary who represented a private institution who had received a property through devise. The property was on a ground lease and the institution did not have space for it within its portfolio, so it sought out our team to help liquidate the asset. The land is owned by the City of Gilbert, in a long term lease. Our Client was looking to sell the building, and leasehold estate in a less than ideal time frame. The recession had been in full swing for about two years and many investors were not interested in buying a property that did not include the land beneath it.

Our client was given a limited time frame to move his business to avoid interrupting his services, due to a pending redevelopment into a RV & Boat Storage, on the property where our client operated his automotive repair shop. Our client requested to stay within a five mile radius of his current location in order to retain his current client base. Given the limited time frame and geographical restraints, locating suitable replacement properties, to either lease or buy, proved to be a challenging task.

Our client owned a shopping center and had been eyeing the free standing net leased pad neighboring his center. During his tenure as owner of the center, the pad had never been made available for purchase. He then sought out the expertise of our team to assist him in finding the true owner of the pad and to help him make an educated offer on the parcel.