A self-storage exit strategy is a comprehensive plan to relinquish and shift ownership of your facility or portfolio to a new company or investor. While every business is unique, this strategic plan allows you to monetize your many years of hard work. Often, once an owner has maximized the value of their property and can achieve a certain financial return, they’ll choose to capitalize on a sale, but there are other options. The key is to identify your specific goals so you have a clear vision of the desired outcome.

Why You Need a Plan

There are several critical reasons for building an exit strategy for your self-storage business:

Eliminate risk. “De-risking” is a major benefit. The commercial real estate market is always in flux, which means owners must constantly weather its ebbs and flows. There’s a constant level of exposure when the market dictates asset value, and there many factors outside your control. Being free of potential risk from external market conditions can alleviate a tremendous amount of stress. Plus, with a solid plan, you can work toward a successful disposition at an ideal price point.

Diversify and grow your net worth. Over time, a self-storage facility or portfolio can only grow so large financially. The reality is there’s a growth cap for every asset. With realistic goals and a tactical exit, you can pursue other investment opportunities. In fact, relocating capital in new ventures can be extremely gratifying. You can even spread your wealth across multiple markets. With this route, you no longer carry the burden of relying on a single asset for financial gain.

Enjoy your life. Relinquishing control and capitalizing on a premium return opens several opportunities for personal and financial growth; but ultimately, a successful exit allows you to retire and enjoy time with family and friends. You can also pursue other ventures that would otherwise be too expensive or time-consuming. The personal freedom that comes from a successful self-storage exit strategy can’t be overlooked.

The Options

When building your self-storage exit strategy, you have several options. The most obvious is a facility sale, which’ll allow you to relinquish all aspects of the business (and associated risk). You might sell to another investor, a family member or friend, or even to one or more of your employees.

Alternatively, you can pursue a partial exit, which involves bringing a new partner into the business to bolster the asset while you reduce your overall responsibilities. This frees up a lot of your time while allowing you to maintain some level of ownership. A partial exit offers you the option to be a more passive figure in the business, while a full exit at the right time offers the most stable hedge.

Other possibilities for exiting a self-storage business include passing the business to a child or other family member, being bought out by a partner or other stakeholder, merging with another company, or initiating an initial public offering. You can also simply liquidate the business.

Choosing What’s Best

The best way to secure a positive financial outlook for you and your family is to surround yourself with a core group of trusted contacts including self-storage experts, advisors and key staff members who share and value your vision for success. This includes a great facility-management team, lawyers, CPAs and financial strategists among other valuable resources who prioritize your company’s best interests. Surrounding yourself with top professionals who can help craft your exit plan is key.

It’s also critical to conduct due diligence by speaking with other self-storage owners who have successfully transitioned out of the business. Listen to their experiences, learn the pros and cons of exiting, and make note of important lessons learned.

Making the decision to relinquish your self-storage asset is very personal. It’s a major, life-changing shift, after all. Ultimately, it boils down to your individual passions and internal position. What could be next for you after self-storage ownership? Perhaps you want financial security for you and your family. Maybe you want to relocate or reinvest your funds to diversify your holdings. There are plenty of desirable options.

Clear goals are the way to a successful exit, but you must have a realistic outlook. You’ll be walking away from the self-storage business you’ve built. The adjustment to being on the outside looking in can be difficult. It’s a mindset you should start embracing well ahead of your exit.

Ryan Clark is co-founder and chief revenue officer, and Bryce Josepher is head of marketing for SkyView Advisors, a Tampa, Florida-based real estate brokerage that specializes in self-storage. Ryan helps facility owners and sellers through a range of advisory services including acquisition, disposition and recapitalization strategies as well as asset valuation, and joint ventures. Bryce oversees and executes all branding, content and messaging for the company. To reach Ryan, call 216.302.3661 or email [email protected]. To contact Bryce, call 813.220.7828 or email [email protected].