In my role as Financial Analyst here at Argus, one of the most common themes in my conversations with owners is the softening of rental rates due to the increase in new development that we have seen over the last few years. This increase in supply has forced owners and operators to adjust their rental rates downward in order to maintain occupancy and stay competitive within their property’s submarket. Because of softening rental rates and rising operating expenses, NOI has been tightening; a trend that can be seen industry-wide as the five major REITs have reported NOI growth declines for 11 consecutive quarters.

As a self-storage owner, how do you continue to maintain or raise your NOI in a market that is experiencing headwinds such as declining rental rates and rising operating expenses? As a buyer, how do you find value in a deal where there may not be much short-term upside?