By Barry Sherman
Developing a new self-storage or toy storage facility can be one of the most exciting ventures in commercial real estate. Demand is rising nationwide—for traditional storage as well as for recreational “toys” like RVs, boats and classic cars. But no matter how strong 
the market looks, projects won’t move forward unless the financials stand up to investor and lender scrutiny.
The truth: Most deals don’t fall apart because of the concept. They fail because the numbers don’t hold.
Common Mistakes Made in Storage Financials
It’s no easy task to put together your project budgets and proformas. Even experienced developers make missteps. It’s always good to have a second set of eyes on the financials. The most common pitfalls include the following:
- Incomplete Budgets
Many budgets leave out key soft costs such as permitting, design, legal and financing
fees. Lenders will immediately flag these gaps. - Assumptions Without Support
Rent rates, lease-up schedules and operating expenses are often based on “best guesses” rather than third-party comps or feasibility studies. Without documentation, assumptions fall apart in underwriting. - Unbalanced Capital Stacks
Equity partners and banks look for structures that balance risk and return. If debt coverage ratios or IRRs don’t align with market expectations, capital dries up. - Skipping Stress Tests
What happens if lease-up takes 12 months longer? Or interest rates climb? Without downside modeling, a project looks risky instead of resilient.
What Strong Financials Should Deliver
To earn investor and lender confidence, storage budgets and proformas should include several key elements:
- Capture all hard and soft costs in detail, no gaps, no surprises.
- Document assumptions with comps, studies and market data that match the project type (self-storage vs. toy storage).
- Model multiple scenarios, including stress tests on lease-up pace, interest rates and operating costs.
- Present coverage ratios (DSCR) and investor returns (IRR) clearly and transparently.
- Align numbers with presentation materials, so executive summaries, visuals and capital stack diagrams tell the same story as the spreadsheets.
Why Toy Storage Needs Extra Care
Toy storage is gaining attention as a specialty asset class, but it comes with unique variables:
- Seasonality: Will RVs and boats rent year round?
- Unit Mix & Pricing: Are spaces sized and priced correctly for the market?
- Zoning & Land Costs: Larger parcels and setbacks can shift economics.
- Lease-Up Timing: Demand can fluctuate more than traditional storage.
Without careful modeling, these factors can make a project appear riskier than it truly is, or worse, lead to financial surprises after construction begins.
The Bottom Line
Whether you’re building self-storage, toy storage or a hybrid facility, the path to financing starts with rock-solid financials. The best projects don’t just have great sites or strong demand. They have budgets and proformas that withstand scrutiny, answer tough questions and inspire confidence.
Just remember: The right numbers don’t just tell a story, they help you get the deal done. Make sure you put together a proper investor-ready financial package to ensure you seal the best deal possible.
Barry Sherman is Partner/Principle at S3 Partners. S3 Partners has more than 25 years of diversified experience in managing storage facility design, engineering and construction, offering expertise in constructing new facilities or expanding existing businesses to accommodate RVs, boats and other recreational toys. The team at S3 Partners has seen hundreds of deals stall because of preventable financial missteps, leading to the development of DealPro™, a proven methodology and modeling platform designed specifically for storage projects. DealPro helps developers avoid common mistakes, present credible financials and secure stronger terms from banks and equity groups.
