Self Storage Analysis

[Jason Vandermark]

Hi, I’m looking at moving into storage facilities. I currently own multifamily and just trying to get information evaluating them.

When evaluating a facility what is a good rent per sqft?

Total expenses per sqft?

Also what is the avg market cap rate for storage?

Thanks

[Kevin Bledsoe]

@Jason Vandermark

If you use $3.50 per SF or 35% of the Gross Potential Income (All Units Rented at Market Rate) then it’s a good overall ballpark for expenses. Sometimes it doesn’t workout, depending on the size and location of the facility. Cap rates vary drastically, but using a 7% cap rate would be fair for most underwriting scenarios. I would use a 7% as your exit cap rate projection as well.