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Strong Investment Opportunities in Storage Sect

By Karen Schutte

Wentworth Property recently sold a $260 million self-storage portfolio and then paid cash for a new self-storage in Pima County, in southern Arizona, for $11.7 million.

A Phoenix-based company, Wentworth has a national presence through its developments in numerous states and a satellite office in Dallas. Wentworth’s projects include ground-up development, build-to-suit, acquisitions and redevelopment of office, industrial, retail and storage properties. Wentworth’s team of professionals has been involved in over eight million square feet of development and acquisition transactions.

The 80,510-square-foot facility was built in 2022 as a CubeSmart Self-Storage, with approximately 612 storage units including small closet-size units, 5’x5’, 5’x10’, 10’x10, 10’x15, 10’x20’, 10×30’ and 15’ to 30’ vehicle storage spaces.

The seller, Blue Sky Self Storage Overton LLC, is an affiliate of Grow Your Own Storage of Lufkin, Texas, co-owned by Michael Perry.

The recent self-storage sales made me look into the strength of the self-storage industry, and I found there’s a case to be made.

Strong ROI

The self-storage industry continues to see high demand. According to Forbes nearly 10% of American households are now renting storage units. The average monthly cost for a storage unit, regardless of size, is close to $90 per month, so self-storage buildings have the potential to pay for themselves within a matter of months of being open for business.

Over a recent nine-year span, self-storage facility owners across the United States saw an annual return on their investments of almost 17%.

Low-Maintenance

A metal storage building or complex is also inherently low maintenance. Steel buildings need little in terms of upkeep in comparison to wooden buildings because their exteriors are durable, long-lasting and resistant to damage caused by dirt, sand, pests, climate conditions and so on. Typically, a metal storage building needs little more than an occasional power wash to maintain its exterior aesthetic appeal.

Easy to Finance

Self-storage buildings and businesses have also become easier to finance in recent years. While entrepreneurs may be able to obtain conventional loans for mini storage buildings, they may also be able to secure financing through Small Business Association loans or even USDA loans, depending on where they plan to raise their buildings. Other financing opportunities may also be available, depending on circumstances.

Flexibility

A steel mini-storage building also offers a high degree of flexibility. If entrepreneurs live in areas with lots of boat or RV owners, they can customize their storage units to attract and appeal to this demographic. Building owners can also adapt or reconfigure their buildings by using partition panels or other design techniques to change unit sizes, if need be.

When the economy is strong, consumers tend to make more purchases, and when they make more purchases, they need more space to store their possessions. Conversely, when the economy is weak, renters and homeowners may have to downsize to smaller spaces, creating a need to store certain possessions elsewhere. In other words, the need for storage space is always going to be there, making a metal self-storage building a smart, profitable investment that has huge income potential.

It is a truth universally acknowledged that any individual—regardless of status and fortune— everyone needs extra storage space. Personal belongings, furniture and general items, whether unused cooking tools, hobby supplies or seasonal clothing, can build up over time until suddenly your cupboards and closets are full.

Karen Schutte writes for RealEstateDaily-News.com.

 

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