Let the appraiser know self-storage cap rates have not increased as expected because most facilities are still performing at or above the owner’s expectations. Listing prices have not declined as anticipated because of continued good facility performance.
Look for Discrepancies
You can choose not to be a part of the appraisal process and, perhaps, you will get lucky. But remember, luck is no accident; it is the result of diligence. The appraiser’s task is to measure and mirror the expectations of informed market participants. You can help assure that happens by providing your insights and a sense of your market’s current conditions.
Ask the appraiser to call you when the report is finished, but before it’s submitted to the loan organization to see if there are any major discrepancies between the facility’s actual operating income and expenses and the conclusions reached by the appraiser.
Remember, the appraiser cannot discuss conclusions, but if there were big differences, this would be the time for the appraiser to understand why and to be prepared to support his conclusions with market evidence.
Charles Ray Wilson is the founder Self Storage Data Services Inc., an independent research firm that maintains the nation’s largest database of self-storage operating statistics. Mr. Wilson is an internationally recognized leader in providing independent research on the self-storage industry. For more information, visit www.ssdata.net.