Making A Lasting And Positive First Impression

I attended a seminar last week that discussed trends in the real estate market for the self-storage industry. The discussion revolved around the trends in 2018 and what is expected to happen in 2019—cap rates, interest rates, you know, normal real estate jargon. But basically, development of new facilities slowed in 2018 and will continue to slow as markets are impacted by new storage facilities, banks are tightening lending, and banks want to work with experienced operators. What seems to be happening now is that the existing facilities are attracting REITs or investors that are looking to build their portfolios. Self-storage as an asset class is growing and can be a successful niche for investors. But you already knew that, didn’t you?

Being that about 63 percent of storage properties are owned by first-generation developers, single owners, or families, there are a number of properties becoming available on the secondary market, and investors are on the hunt for more. There are a lot of facilities out there that were developed throughout the 60s, 70s, and 80s that are now older and being sold as value-add properties.

Most older facilities have long standing operations with successful track records, with owners who may be looking to cash out. Is your facility one of those that’s going to be sold to perhaps fund your retirement? If so, making small investments in capital improvements now can earn you more at sale (and fund your retirement lifestyle). There are a few easy and relatively affordable improvements to consider making when preparing your facility for the real estate market.

First impressions are key; that is what the buyer will remember when comparing your property to others, which means your facility should look clean and as new as possible. This includes making sure your doors (the single most identifiable feature of a self-storage facility) look their best. Just cleaning them goes a long way, but if your metal doors and buildings still look tired or faded you can have them restored to look new with a with a high-quality coating made for metal. Other ways to freshen up your property include fresh paint on curbs, bollard covers, or simply freshening faded paint on concrete or driveways. You also want to enhance the landscaping, lighting, and your store. If your manager is going to be part of the sale, you can also help by making sure that their credentials are polished as well.

Going back to first impressions, they are the ones that sell your facility every day to customers, and they can be key in helping a buyer really keep interest in your property. By investing in these features of your facility and your staff, you will be able to get the best possible return on your investment.

Now, go start planning your ‘round the world retirement cruise!