Selling Your Self-Storage Facility: Prepare in Advance for Maximum Success

Jeffrey Supnick Comments
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During the past two years, there has been a significant curtail in transaction activity in all types of real estate sales, including self-storage. More recently, however, we find there’s a substantial improvement in the capital markets, particularly for the largest self-storage companies. This will continue to drive demand on behalf of industry companies that wish to grow through acquisition of existing facilities.

By historical standards, interest rates are low, which allows buyers to pay relatively aggressive prices for self-storage properties. Many economists presently fear the increased money supply and government deficits brought on by economic-stimulus programs will surely lead to increased interest rates, higher taxes or, most likely, a combination of both. As mortgage and tax rates increase, values on all real estate may face additional downward pressure. For these reasons, the possibility of selling their facilities has once again surfaced in the minds of many storage owners. 

Are You Ready to Sell?

There are a number of practical and rational reasons an owner may wish to sell including:

  • Estate and tax planning
  • Business decisions relating to the ability of your property to stay competitive in the marketplace
  • The desire to take advantage of a favorable real estate market or current tax rates, or an interest in diversifying
  • Taking advantage of other financial opportunities that may present themselves

These financial decisions are objective and can be analyzed using common business sense and simple calculations.

A knowledgeable self-storage real estate broker can assist you in preparing your facility for sale by determining the best practices for maintaining good records and files, sprucing up the property cosmetically, and improving rent rolls. The more difficult decisions are often of a personal nature since selling presents certain emotional criteria that are harder to analyze.

Invariably, there are strong emotions attached to moving on. Perhaps one of the most overlooked elements of selling a property is your own personal reasons. Preparing a facility for sale involves making the decision to sell. We’ve all heard of seller’s remorse. Sellers who can portray to a prospective buyer a genuine intention to sell will receive the greatest amount of attention, which will increase your chances of carrying out a successful sale at an optimized price.

While the market has improved, gone are the days of “If I get the right offer, I may consider selling.” Before putting your self-storage property on the market, take some time to make a firm assessment of the reasons you wish to sell. Look not only at the objective rational elements of the decision but the personal ones as well. 

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