Inside Self-Storage

JAN 2019

Inside Self-Storage (ISS) is an information source for industry owners, managers, developers and investors covering news, trends, facility operation, finance, real estate, construction, development, marketing, technology, insurance and legality.

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7HQDQW$SS ',*,7$//2&.&+(&. 23(1<285*$7( $''81,7127(6 9$&$17/,67 7(1$17,1)2 08/7,6,7($&&(66 VDOHV#4XLN6WRUFRP ZZZ4XLN6WRUFRP 0DQDJHU$SS $//2:6 <285 7(1$17672 23(17+( *$7()520 7+(,5 3+21( ÝÕÕĀØ×ÖĀÖÞÝÜ 4gg{{¶K¶Äg¬{ applicable business-management skills should take caution. Otherwise, they may unintentionally take on many more routine operational responsibilities than expected and experience buyer's remorse. Myth 6: Self-Storage Is Cheap to Acquire Modern self-storage projects must meet consumer demands for security, safety, convenience, service quality and competitive pricing. These requirements make a contemporary, high-quality property a larger investment than in the past. There are many factors that go into valuing a facility including: • Land costs: Self-storage land prices are higher now because developers typically want to build in urban commercial locations with relatively high consumer traf•c. They no longer gravitate to the more obscure sites in industrial areas where storage was once common. • Development costs: Building materials and other costs associated with new commercial construction are higher than in previous years. • Quality demands: Today's customers typically expect quality construction, electronic access, security fencing, fully paved driving areas and walkways, and sophisticated digital surveillance systems. Properties also typically include a lot of units today, which necessitates onsite management personnel. • Investment value: Acquiring a successful self-storage business requires a larger amount of capital than it did during previous periods of industry growth. In addition to the reasons mentioned above, the market now bears higher prices because even novice buyers are aware of the exceptional investment that well-developed and managed self-storage businesses have proven to be. If you're looking to invest in a self-storage development or acquisition, being aware of these misconceptions can help you avoid costly mistakes. Ryan Clark is director of investment sales at SkyView Advisors, where he assists self-storage owners and sellers through a range of advisory services, including acquisition, disposition and recapitalization, asset valuation and joint-venture structures. He prides himself on taking a client-centric approach, with a focus on building long-term relationships and developing a strategy to best serve each customer's unique needs. For more information, call 813.579.6363; visit www.skyviewadvisors.com. January 2019 I ISS 17

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