How to Evaluate Self-Storage Investments
Pascal Wagner talks with Kris Benson about evaluating self-storage operators: fees, operating income growth, and what an operator can and cannot control.
In this interview
Kris Benson explains where self storage fits an investor’s goals, and how a preferred return that accrues works when a deal pays out less than the target in its early years. He describes how to judge a sponsor’s fees by asking whether they are in line with the market and whether the sponsor earns most when the investor does. He separates what an operator controls, net operating income, from what it cannot, such as interest rates and the prices buyers will pay. He suggests comparing operators by how much they grew operating income on past deals, and explains how risk differs between a large public company, a mid-sized operator and a small one.
Chapters
- Meet Kris Benson
- Where self storage fits your goals
- How an accruing preferred return works
- How to judge a sponsor’s fees
- How self storage has behaved in past cycles
- What an operator can and cannot control
- Comparing operators by income growth
- Large, mid-sized and small operators
The picture is YouTube’s poster for this episode. Published August 15, 2023 by Pascal Wagner, founder of DealStack. DealStack does not rate or recommend firms. Reliant Self Storage does not pay DealStack, so this page is not a paid placement.
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