All Forum Posts by: Michael Patti

Hey Michael. So this is where I am at. I have two comps I found of brand new fully built storage facilities that sold. One sold for $215/square foot. Another sold for $240/square foot. Both to public storage REITS.

I'm looking at acquisition cost of $2,000,000. The building has good bones but would need to be reconfigured on the inside. It's currently a 3 story warehouse with 20 foot ceilings on the 1st floor and 16-18 foot ceilings on the 2nd and 3rd floor. Needs a new elevator which is fine. You want a new elevator anyway. I thin I'd ideally want to wrap it in metal. I got a quote from someone who said I may be in around $90/SF for the construction. I feel like that's high but maybe that's what it would cost in Philadelphia. Owner is willing to hold a note. I have the downpayment money of $600K, but where do i get the construction financing from? Or should I just try to flip it to a storage developer. This deal is off-market and thus hasn't been looked at on a national level. 

Hi everyone, 

I found a large warehouse in an up and coming area of Philadelphia. I think this would make a perfect self storage conversion opportunity. The owner is willing to hold a mortgage for a few years. I am wondering how does one go about finding construction financing. Or a JV partner to cover the construction costs. Purchase price would be $1.9MM. Construction I think $3-4MM. Then sell for around $9MM to a cube smart, extra space or public storage.

Hey Zach, yeah maybe you're right. I'm getting a construction quote for self storage this week. Will keep you posted. 

All good points. My other idea was to turn it into ghost/commissary kitchens instead or just cold storage and then it wouldn't have to be such an expensive renovation. 

Thank you Michael! That is super helpful. So I'm looking at a property in Philadelphia. Self storage is highly needed there. A recent facility sold for $236/foot completed and rented out. My acquisition cost is $40 a foot. It's a brick shell. It will need a total gut renovation/conversion. 50,000 square feet with 20 foot ceilings currently. Any idea what that will run me to turn it into a sexy clean climate controlled space? Do you think I could get away with $2MM?

I'd say Philly, NC, SC, Florida are all good areas.

I'm contemplating purchasing a 50K square foot warehouse and either converting to cold storage, ghost kitchen or self storage. Anyone have any advice on construction costs? 

Some modular construction is very high quality these days. Definitely considering it for some of my future projects. 

I would definitely try to leverage the $1MM, or buy something all cash so as to get a good discount in this market (since sellers are afraid of deals falling through) and later refinance.