Let me share with you my experience of being a self-storage owner and operator in the year 2025.
Remember that I sold off most of my portfolio (2 different brands) between 2019 and 2021. I am expanding again, but smaller than before (beats retirement).
If I had to sum up my experience of self-storage growth in 2025 with one word, it would be …S…L…O…W.
Slow to get deals that work and slow to move deals down the rails towards completion.
If I sound like I am complaining, maybe, but overall, I am grateful to be able to play this game I love so much.
It’s just sometimes the world doesn’t move how I think it should. Imagine that.
Acquisitions
Here is what I have learned this year…Write a lot of LOI’s.
There are fewer opportunities on the market. Most Brokers have told me they are doing fewer deals, but they are doing deals.
You will also see a lot of “unpriced” or “market bid” offerings. I notice I have a tendency to liberally hit the delete button when I see those, but I have to catch myself.
I have this picture in my mind that the Broker has told the Seller something close to the real value, and the Seller still wants a 5% CAP or something. I know that’s probably not what is going on, but that’s what I see in my mind.
Either way, priced or unpriced, underwrite to your benchmarks, then submit.
We are going to have to submit a lot more LOIs than in the past to get the deal that works for us.
In many ways, in my coaching life, I have noticed people who come from a sales background are often prepared better mentally to play this game today. That is because they are used to the numbers game.
Not every prospect is going to be a client or a sale. However, if you call on enough, you hit your quota.
That is my experience of acquiring self-storage opportunities today.
And don’t be attached to a deal to the point you can’t walk away from it once under contract. I have made that mistake before and paid dearly.
In 2025, I realized if I am not getting enough deals, I just need to analyze more, expand my market area, and write more LOIs.
Underwrite conservatively and make sure your assumptions are grounded in this new reality.
So, my experience of acquisitions in 2025 was S…L…O…W.
Many may give up, but not us. Right?
Development Approvals
My experience of development approval, no matter what state in 2025, was also S…L…O…W.
Now, I am making this up, but it occurs to me that during COVID-19, people employed at county levels who review and approve development plans and building plans finely tuned their art of being hard to reach.
Florida, a “business-friendly state,” for example, in many counties, it is impossible to even get a preliminary meeting like we used to.
They don’t do it.
We now have to upload a development plan without a lot of initial input of what is currently important to them and wait for some faceless, nameless person or group to review. Then we get the plan emailed back with comments.
Now I am just whining. I’ll cut that out. But my experience in 2025 of working with regulatory agencies was S…L…O…W.
Boat & RV
Still bullish on this sector.
I am starting to see some markets with a lot more in the pipeline. But I feel good about it due to the still ongoing production of RVs that tend to be purchased quickly.
Every day, 11,000 baby boomers retire. Seems like this sector will do well for a while.
Just be careful about the markets.
I have seen some of them were nice and canopied, and projects are leasing in the 50-something a cent PSF per month range. If we are developing, I really need to get closer to the 75 cents to make the calorie burn worthwhile.
I am not afraid of being the most expensive in the market, but if my direct competitor, with a similar product, is 30% or more below my needed rate, I generally pass. I would rent from them over me.
Flex Space
It’s strange. Flex space is the new shiny object for many smaller self-storage developers (myself included).
I worked for a development company as a Broker in the late 1980’s early 1990’s that built a lot of flex space.
You may hear it called office/warehouse, small bay, or flex space.
We are now trying to put together a development plan for a project with flex, boat, and RV space.
Many similarities to self-storage, but also, many differences.
Some of the things attracting many self-storage operators to the space are the similarity of construction (close but also different), the fact that using dynamic pricing, storage rates are everywhere, and flex can perhaps stabilize the cash flow of a project. Many of the customers for both are the same or similar, and the fact flex can be, or can be, close to NNN income.
Also, in markets like Florida, where industrial land is not being made every day and is tight, rates can be quite high.
In most of the rest of the country, one can expect, let’s say, $8 on the low end to perhaps $14 or so on the high end. Every market is different.
I have put more attention on this asset class than I have in years. In two of the partnerships I am in, they are (outside of the projects I am not in) doing flex projects.
I will have an episode on flex in January 2025. It seems like 2025 was the introduction to many self-storage operators the idea of entering this space as well.
Happy New Year
So, I look forward to a faster-paced and prosperous new year.
We still have some challenges ahead as an industry, but market rates in Q4 appear to be on an upswing, and many developers and lenders seem bullish about the new administration.
No matter what the conditions, as entrepreneurs, our fate is only determined by our ability to keep our focus on the end goal and be willing to find opportunities in any market or situation in front of us.
I have seen the universe conspire to help myself and many others win against what seems like insurmountable odds from outside appearances.
In my life, it is my dance with the universe and my own thinking that determines my success, not the circumstances.
This is how I am creating 2025, and that is my wish for you as well.
