If you are in the market as a buyer or seller of a self-storage facility, it is important to understand that the structure of the purchase is as important as the purchase price. As with any negotiation, the buying and selling parties must identify what factors they will weigh during the decision making process.
Market Monitor
IX 2012 – Time to Take a Look at the Big Picture
2012 is a year that has been marked by the political “rock and roll” of the election season, and if you are like me, it is difficult to predict what the rest of the year or next year will bring. However, no matter what side of the aisle you sit on, if you consider the debt levels the US economy is embarking on with no debt reduction plan in place, it is obvious we are moving quickly into uncharted waters.
VIII 2012 – Reputation Management: Your Online Presence Says A Lot About Your Business
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.
VII 2012 – Cap Rates and NOI: Understanding the Real Value Equation
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.
VI 2012 – Are You a Real Seller?
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.
V 2012 – Raising Rents: Determining Your Best Strategy
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.
IV 2012 – A Note to Buyers and Sellers: These May Be the Best of Times!
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.
III 2012 – The Game Has Changed…What’s Different This Time?
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.
II 2012 – It’s Time to Get Your Marketing Plan Tuned Up!
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?
I 2012 – New Year, New Goals, New Investment Market
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…
XII 2011 – Wrap It Up!
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.
XI 2011 – Past Due Rent: The Real Estate Implications
“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?
