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.  

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.

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