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Want Access to Good Self-Storage Deals? 5 Keys to Building Relationships With Industry Brokers

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If you’re looking to expand your self-storage portfolio and purchase one more facilities, it’s smart to ally with experienced real estate brokers; but it takes time and effort to build rewarding relationships with these professionals. The author shares five tips his company followed to go from ground zero to $90 million in purchased assets.

If you want to expand your self-storage portfolio, you’re probably hoping to acquire one more facilities; and to find the best opportunities, it’s smart to ally with real estate brokers who have industry experience. However, building relationships with these professionals takes time and effort. What can you do to fast-track the process and win more deals?

Working with brokers helped my company grow from ground zero to nearly $90 million in assets. Here are five keys to connecting and working with these experts.

1. Offer Respect

When I started in self-storage, I noticed buyers and sellers sometimes lacked respect for brokers. The common assumption was that brokers care more about making a commission than about what’s best for their clients. But that’s a harsh and often erroneous supposition, and here’s why.

Acquisitions professionals spend a lot of time reviewing deals, running due diligence and closing transactions. That leaves little time to source new business. Based on my experience, it takes about six minutes to call an owner who might be interested in selling. That includes talking with the person and updating notes in a database. Sometimes, one phone call turns into several if you can’t reach the owner at the first number you try. Typically, 90% of these solicitation calls are met with rejection.

I have tremendous respect for the brokerage community. These professionals work hard and face refusal every day. So, approach your interactions with these folks with this in mind and show them the esteem they deserve. In turn, they’ll likely show you off-market deals no one else gets to see!

2. Provide a Track Record

A self-storage seller is often concerned with two things: the price they’ll fetch for their facility and the certainty of closing. Therefore, if you don’t have a track record of closing deals, it can be difficult to compete with other buyers.

When my group started in this industry, we didn’t have a track record of closing self-storage deals, but we did have experience with multi-family properties. I would introduce myself to brokers by saying something like, “Hi, [broker name], I'm a partner at [company name]. We own about $400 million in multi-family property and want to acquire some self-storage. Please tell me a little bit about your listing.” This approach accomplished a couple of things.

First, closing $400 million of anything showed we have the capital and experience to close deals. There are many issues that can derail a real estate transaction. Having a track record shows we can handle those issues and know what to do after going under contract. Second, by saying I’m a partner in the business, I let the broker know they’re talking to a primary decision-maker. These things would get the conversation going and build rapport for deal flow.

How can you start a conversation with a self-storage broker if you don’t have a track record? First, don’t hide it; talk about it. It’s better to bring that up right away because it shows you understand their perspective. Then, discuss your career and business accomplishments. Mention your capital (debt and equity sources) and partners, if any. Show them how you’ve developed a plan to acquire X number of storage facilities over the upcoming year.

Next, try to meet the broker in person, either at tradeshows or on your next trip to their city. This’ll help you build trust and rapport, and they’ll remember you when reviewing your offers. Several brokers with whom I’ve spoken said they love working with new buyers because they often grow over time and buy more. It takes time to establish a track record, but everyone starts at zero. Try to keep that in mind.

3. Provide Clear Criteria

It’s important to have clear criteria for the self-storage deals you want—size, markets and price. Try to share these with every broker you meet. I recommend creating a PDF of your list and emailing it to them after the initial meeting as part of your follow-up. It shows you’ve done your homework.

Sometimes you’ll get a call from an excited broker who wants to discuss a deal they just listed, but the property doesn’t meet your standards. In this case, politely decline by saying something like, “I wish I could buy that deal, but it isn’t our target market [or isn’t our target deal size, or whatever the discrepancy may be].” Then point back to your criteria. Try not to say, “As I mentioned on our last call, we have to stick to certain markets.” This wording can make them feel dumb, and it’s never a good idea to make the other party feel this way, especially when you want to do business with them.

We all need a little reminder sometimes. It’s OK if a broker can’t remember your acquisition criteria as long as they recall that you’re pleasant person with whom to talk and do business.

4. Prep Your Phone Etiquette

For every deal that’s awarded to a self-storage buyer, there are other investors who lost out. The broker must call those people to let them know the bad news, and those calls are never pleasant. If a losing buyer gets upset, the broker will remember that interaction. After enough unpleasant communications, they’re unlikely to do business with that buyer or send them off-market deals. Remember, everyone prefers to do business with people they like!

If you lose a deal, be polite and ask for feedback. How far off was your offer? What about your terms? You won’t always get straight answers due to confidentiality, but you’ll often get enough information to adjust for the next attempt. You’ll also have insight to what other buyers are doing and where the market is heading.

Try to end the call on a positive note by saying something like, “Thank you for your feedback. We’ll make some adjustments to get the next deal done!” It sets a positive tone for future business. The next time they think about you, they’ll remember it was great to talk to you on the phone, even when sharing bad news.

5. Be Willing to Tour Deals

At my firm, if we’re bidding on a self-storage deal we really like, we’ll make it a priority to tour the property prior to making our offer. Brokers appreciate this because we’re creating activity around the site. Sellers like this because it looks like the broker is doing their job.

In the past, brokers have told us their seller felt confident with our offer because we saw the property. In the seller’s mind, we’ve reduced the chance that we’ll renegotiate after going under contract.

Traveling to deals can be a pain. The time, cost and risk of not knowing if it’ll help win the deal is just part of the game. But consider this: Of the deals we’ve closed, we toured 75% of them before making an offer.

I’ve just covered five keys to working with self-storage brokers. My company has used them to grow its self-storage arm from zero to nearly $90 million in assets under operation and another $30 million under contract in 12 months. I’m certain if you put these tips into practice, you’ll see your business grow, too!

Kris Bennett is a self-storage managing partner at Passiveinvesting.com, where he leads deal sourcing, broker relations and overall strategy. He started his self-storage career in the Carolinas, sourcing deals for an industry acquisition fund. A graduate of the University of North Carolina, he co-hosts the “Storage Investor Nation Podcast” and hosts weekly webinars to educate industry investors. Reach him on LinkedIn.

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