Storage facility investments are a unique real estate opportunity. Specifically they offer pricing power, ability to raise quickly rents based on stronger economy, easy eviction for non-payers, attractive cash on cash returns after stabilization, and potential institutional buyout.
Partner with a local developer who had built a small brand of storage facilities and a tremendous track record in assorted real estate projects. These properties had preapprovals in high net worth geographies that were underserved due to the difficult approval process. I was attracted by the storage facility business model and the potential for consistent, double digit annual returns. Because of the bifurcated market between development costs versus REIT takeout value, the return profile offered added upside potential.