A major reason I decided to work for Inside Self-Storage almost two years ago was because my wife and I want to invest in commercial real estate, potentially in the self-storage sector. I figured my role would give me access to valuable information and industry professionals who could teach me what to look for when evaluating a property for sale and how to determine if it’s an opportunity worth pursuing.
Since then, I’ve been sitting on the sidelines, patiently learning and observing. I’ve seen hundreds of self-storage listings come and go, each one serving as a teaching moment until I felt ready to act.
In mid-December, I received an email from a self-storage broker for a boat/RV storage facility in Apache Junction, Arizona, just 15 minutes east of where I live. I had also recently learned that this sector is underserved in the U.S., especially in Arizona, where traditional self-storage markets are largely oversaturated. I showed the listing to my wife, and we decided to visit the property.
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The day arrived, and we were excited to finally explore our first investment opportunity. For years, we’ve talked about building a real estate portfolio to eventually pass down to our kids. Now, we were acting on it, and the dream was starting to feel real.
We had a plan in place—or so we thought. The first curveball came as soon as we pulled into the parking lot. The property was small and lacked curb appeal. It had a dilapidated chain-link fence through which we could see a dirt lot filled with vehicles. It resembled the chaotic parking you’d find at a farm music festival. RVs, trailers, fifth wheels and even buses were scattered everywhere, with dirt paths weaving between them. We were wholly unimpressed.
Still, we decided to walk the lot and see if this might be a diamond in the rough. I noticed a CubeSmart banner hanging on a block wall, which raised questions. Why would such an established, experienced company want to sell this property? What did they know about it that we didn’t? No doubt, a lot.
Then came the second curveball. My wife went into the small, nondescript manager’s office to ask about accessing the property. When she returned, she said, “There’s no one in there.” A car was parked outside the building, so we waited a few minutes, hoping someone would show up. No one ever did. It was time for Plan B.
We drove to the neighboring business east of the boat/RV-storage facility, hoping to get a better view of the property from their elevated parking lot. From there, we could see more of the same: vehicles haphazardly parked on a dirt lot.
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I tried to switch gears and think about potential value-add opportunities, but it was hard to ignore our disappointment. We had envisioned a well-maintained property with a paved lot and neatly marked parking spaces. Instead, it looked more like the aftermath of a frat party than a professional storage facility.
Next, we decided to drive around the area to assess the surrounding community, nearby developments and competitors. We noticed many established neighborhoods, with RVs parked on residential properties. This part of town is known for its retiree population, so it made sense and gave us some confidence that there was demand for vehicle storage.
However, we also saw a lack of commercial development. Much of the surrounding land was undeveloped desert, which made me wonder if this property might be better suited as a land play. We could stabilize the storage business while waiting for a buyer interested in retail or residential development.
As we headed toward home, we continued our due diligence by counting competitors along the main road. Within three miles, we saw three other boat/RV-storage facilities. One resembled the dirt lot we had just visited, but the other two were impressive and aligned with what we hoped to find. They were in a more developed part of town, and customers would have to drive past them to reach our potential business. That told me the listing we visited would have to compete on price, as location and curb appeal were working against it.
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Back at home, we discussed our experience and shared feedback about the property. I floated the idea of viewing it as a land purchase with a storage business attached; but with little sign of nearby development, we didn’t want to risk a long-term hold. After further discussion, we decided to move on and resume our search.
A week after our experiment, I received an email from another broker, boasting about a recent closing for a self-storage facility with vehicle parking in Gold Canyon, Arizona, just 15 minutes east of the property we had visited. This site was beautiful. It had curb appeal, a Southwest-style building, impeccable landscaping and a paved lot with neatly marked parking spaces. It was everything we had hoped to find. My wife and I agreed this was the kind of opportunity we’d love to pursue.
The experience taught me that I need to be more diligent about monitoring broker websites and signing up for their mailing lists. I also now have a clearer picture of the types of properties that fit our buy box. Even though our first experience didn’t go as planned, our enthusiasm for finding the next opportunity remains strong. I don’t know when it’ll come, but we’ll be ready to seize it!
Ron Matejko
Associate Editor, Inside Self-Storage
Ron Matejko is associate editor at Inside Self-Storage. To reach him, email [email protected].
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