Frequently Asked Questions

I am completely new to the self storage industry. Where do I start?

Visit the website: www.selfstorage.org which is the website for the National Self Storage Association. Under “Publications” are reference books you may order. Under “Affiliated Associations,” you may find your state contact information. Under “Vendor Listings,” you will find resources available to you by calling on the specific information you want. Also, call the SSA in Alexandria, Virginia for their "Welcome Packet" at 703-575-8000 (EST).

Also obtain a copy of the Mini-Storage Messenger by calling 800-824-6864, x3574 (MT) and ask for a sample copy. Also call Inside Self Storage at 480-990-1101, x1285 (MT) and ask for a sample copy. Visit our Links page for direct access to the web sites mentioned.

What does it cost to purchase a facility or land with plans?

We have listed small, existing facilities starting at $225,000 to large facilities at over $10 million each. Land and plans have started with a small piece of property at $100,000 to property valued over $2.5 million. Lending institutions typically require a down payment equal to 25% of the purchase price.

What do you mean when you talk about land with plans?

The land we list has already been through the municipality zoning process and approved for self storage. These listings include a set of plans where buildings and unit mix have already been designed according to the topography and size of the parcel of land.

I'm thinking about selling my facility, but wonder why I shouldn't list it with a local broker that is familiar with my particular area?

Self Storage is a very specialized area of commercial real estate and demands that someone with specific industry knowledge handles the details of the transaction. In some cases, the seller of a property sold for a substantial discount from the market value because the local broker did not know how to value a self storage property. In addition, a seller or buyer may fall prey to unethical parties in a transaction if they are not familiar with the customary methods of handling delinquent accounts, rent pro-rations, closing costs and other items included in a self storage sale. DON'T LEAVE MONEY ON THE TABLE!

I've heard the term Cap Rate used in this business. What is it?

See "Understanding Cap Rates" under Industry Articles.

How long does it usually take to close on a self storage property?

Most transactions take 120 to 150 days from the day the listing agreement is signed depending on a myriad of factors including sale price, information availability, property condition and time of year.

How much is the cost of the sale (commission)?

Commissions are negotiated between the seller and the real estate broker. Normally, a commission is a % of the ultimate sale price. Commission rates generally range from 3% to 10%, depending on the value of the property. As part of your confidential proposal, you will be quoted a commission rate.

What if my manager finds out that I am selling the facility?

During the proposal process, we can be very discrete so as to not alert the employees that the owner may consider a sale. Once the decision to sell is made, we always advise our clients to be right up front with the employees. They will invariably find out the property is for sale, usually through observing your broker taking clients through the property and the request for information above and beyond the normal practice. We suggest that a bonus be offered to the employees as an incentive to stay until the sale occurs.

Besides you acting as my broker in buying or selling my facility, who else will I need to get involved in the transaction?

You will need the services of an attorney, possibly an accountant, and a lender who will appoint an appraiser and a firm to conduct a phase I environmental study. Other professionals may be needed for special situations.

Why are there so few properties for sale?

Self storage has become a very popular real estate investment in the past several years. Those who already own a facility are making such a good return that they are reluctant to sell until circumstances dictate. When a facility does come up for sale, it typically sells within a matter of weeks if it is priced correctly. Periodically, check our website for available listings.