How appropriate that I should be introducing our annual real estate issue just as I've purchased a new home--the structure I now refer to as "the onion." Why? Because regardless of what information I may have gathered during inspection, appraisal and walk-through, I still manage to uncover an endless catalogue of home improvements. I keep a notepad on my counter for this itchy little list. It comes in handy during those moments when, for example, I turn around the corner, spy that ancient crystal light fixture that looks like a punchbowl and think, "Oh, that has got to go."

Now, cosmetics are just cosmetics. But sometimes your real estate investment--including self-storage--harbors serious problems. Maybe there's a pest-control issue or a state-of-the-art competitor in the works just down the street. That piece of adjoining land may sweeten the deal until you discover there's a zoning issue that prohibits expansion. Perhaps problems are concealed in the books, under the guise of bad debt. As with all onions, one layer peeled will reveal another and, eventually, you'll reach one that makes you cry.

Which brings us to two topics covered in this edition: feasibility studies and due diligence. When buying a self-storage site, these tools can be imperative. You need to know the viability of the project--and so does your lender. You should investigate your market and its demographics, the physical condition of the property, the verity of the previous owner's income statements--all details of operation from a management and financial perspective. Beginning on pages 50 and 105, you'll read fine points of both processes: how to hire a professional, what you'll pay, what the reports should include, the importance of research and more.

If you are on the market to buy, be sure to read "Buying Basics," page 76, which includes five key tips for purchasing self-storage. On the other end of the spectrum, current owners may be wondering, when is a good time to sell and how do I maximize my sale? Jack Guttman's article, page 100, will shed some light on this topic. Nick Malagisi shares the story of a three-time sale in "Persistence Pays," page 102, and Ray Wilson explains the direct-capitalization method--better known as cap rates--which should be of interest to buyers and sellers. Last but not least, the most important aspect to this real estate game is understanding the conditions of the overall market. In this month's cover story, Michael McCune tells us what to expect in 2002.

This is our big Vegas show issue. We'll be hosting our knock-out annual expo at the Las Vegas Hilton, Feb. 13-15, and we certainly hope to see you there. In addition to an expo hall packed with more than 200 industry suppliers, attendees can expect 30 educational seminars, a buyers' and sellers' meeting, the open forum with Jim Chiswell and Joe Niemczyk, roundtable discussions and, of course, entertaining social events designed for networking. Whatever you're looking for, we've got. If you're a novice or seasoned participant, come show your support for the industry, make connections, learn new stuff and have fun. This is one onion you won't mind peeling.

See you on the show floor,

Teri L. Lanza
Editor
[email protected]