Selling Self-Storage in a Soft Real Estate Market

Michael L. McCune Comments
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Think about hiring an appraiser or an experienced broker to target the market value of your site, which is almost always determined by using the income approach. Did you know that your actual trailing 12-month income will determine 95 percent of the variables in the value?

Exposure Sells

As a general rule, the bigger the buying audience, the higher the offers. This means widespread marketing and presenting a listed property to as many potential buyers as possible. A seller deserves to see all the potential offers, not just ones a broker develops from his own list of prospects. However, some brokers feel this broader marketing is just an additional cost and also creates a “hassle” for them to respond to questions submitted by “uninvited” prospects. In short, broader exposure ensures your broker finds the best buyer rather than just a buyer.

Keep Managers Informed

Many owners feel that they must keep their manager in the dark about a proposed sale. While this may be appropriate in some instances, in most cases it is usually counter-productive. First, most managers will quickly figure out what is going on and will not react positively to being kept in the dark. Some may begin pursuing other opportunities or even leave abruptly.

An offer of a bonus upon closing of the sale in the event that the manager is not retained by the new owner or severance is a fair and productive way to assure the manager stays on through the selling process. It tends to put the manager on the same “team” as the owner. Managers know that sales of properties happen and will respect your decision to sell if they are treated fairly. Secondly, because of their intimate knowledge of the property, managers can often be very helpful in the selling process. In most circumstances, a positive manager can add credibility to the property’s performance.

Most buyers of properties are in the market for good managers and actually want to hire the existing manager rather than disrupt the operation. More often than not, a manager can be an owner’s greatest ally in selling a property.

If you follow the practices of good selling guidelines, you can expect to sell a property at a market price and in a reasonable time. Of course, the definition of reasonable time may vary based on the number of buyers in the market. Regardless, consider your motives and be prepared for the realities of today’s market.

Michael L. McCune is president of the Argus Self Storage Sales Network, a self-storage real estate brokerage and development company based in Denver. Argus also operates www.selfstorage.com, a marketing medium for owners in the self-storage industry. For more information, call 800.55.STORE.

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