CAP Rate for Self Storage Units in Naples, Florida 34105

3 Replies

I'm trying to do an initial valuation of a Self Storage unit in Naples, Florida 34105.  I know that full due diligence is required as part of the process but I'm trying to get to a offer, no offer decision.  Seller side realtor said 5% to 6%.  Big difference in value.

What is a reasonable CAP rate for Self Storage Units in NAPLES, FL 34105??

Thanks, Bob 

Forge Investment Group, [email protected]

I am a Realtor in Naples. The Cap Rate of 5 to 6% seems low. I would expect a CAP of 8% with a facility that is around 80% full in this market if I was the buyer or representing the buyer.

Cap rate is not only market specific but also, Class Specific.

If it's a Class A Site - expect it to be in the 5 to 6% range

Class B - 6-8% 

Class C - 9 + 

Several other factors involved as well, but this might help.  

Scott Meyers, Self Storage Profits, Inc. | [email protected] | 1‑866‑693‑5999 | http://SelfStorageInvesting.com

OK, so good information all around and the question of which class this falls into lead me to several discussions and a quote Originally posted by @Jon Holdman:

There are no strict definitions of these terms. They're just rough grade people use to give an idea of what a property is like.

A: Newly built properties in the nicest areas.
B: Slightly older property, but still nice. Might be not quite as nice of an area.
C: Older properties. Likely really could use some work. Not the best areas. For investors, these are really the bread and butter for rentals.
D: Run down properties in bad areas.

The area and the property can be described separately. Its possible to have a run down property in a great area. Harder to have a great property in a bad area, though.

So in summary I'd have to rate the propert I'm looking at as a high C or low B with a CAP rate of around 7-8. Thanks Ken and Scott for the quick responses.