Learning to Fund Success: A Sponsor’s Guide to Raising Capital for Self-Storage DealsLearning to Fund Success: A Sponsor’s Guide to Raising Capital for Self-Storage Deals
Self-storage continues to be an attractive opportunity to an array of would-be investors, many of whom are seeking an industry insider they can trust with their precious funds. If you’re interested in raising deal capital as a sponsor, the following will help you choose an investment structure, position and market your offering, and build the foundation for mutually beneficial partnerships.

Whether you’re an established self-storage investor with multiple deals under your belt or a relatively new industry player, having a solid strategy for raising capital is a must. In the United States alone, sponsors raise around $3 trillion each year in unregistered securities and list 37,000-plus new offerings.
The good news is there are thousands of investors looking for opportunities to generate passive income. Other the other hand, with so many options available, you’ll need to differentiate yourself in a crowded marketplace if you want to raise money for a self-storage deal. As a sponsor, how you do that depends on your offering and target audience.
Choose Your Investment Structure
Your first charge as a self-storage investment sponsor is to decide on the structure of your offering. You may propose debt, equity or both. In a private-debt deal, participants receive fixed monthly payments on a standard schedule. An equity deal, on the other hand, allows investors to share in a project’s upside, requiring you to give up some control.
Debt and equity investors typically have very different priorities. The former are more risk-averse and focused on steady, predictable returns. The latter are looking for higher returns and are willing to take on more risk to achieve this goal—with the right sponsor. To attract suitable partners to your self-storage deal, you’ll need to tailor your outreach to meet their expectations.
Position Your Offering
Once you’ve decided on the structure of your self-storage offering, you’ll need to develop a compelling way to pitch it. This begins with the offering memorandum (OM), which provides an overview of the investment including your business plan, projected returns, and details of how profit will be split between you and investors. You can also use the OM to highlight your track record, which builds confidence in your expertise. This document should be informative and engaging, so readers walk away with a clear understanding of why they should participate.
In addition, you’ll need to produce a private-placement memorandum (PPM). This provides greater detail, breaking down the tax and legal consequences of the self-storage project. While the OM will likely be the document that draws investors in, the PPM will help them review the deal’s risks.
Work with a strong tax and legal team to prepare these resources, then make sure you’re familiar with all the information included and ready to answer investors’ questions. Your advisors are specialists in their areas, but as the self-storage sponsor, you’re the face of the deal. Interested parties will expect you to communicate details clearly and confidently.
Get the Word Out
Trust and mutual respect are the foundation of the sponsor/investor relationship. People with an established tie to the sponsor are the most likely to invest, which is why sponsors typically begin their fundraising effort by connecting with those in their immediate circle, such as friends and family.
Beyond this, there are many ways to boost your visibility, from hosting self-storage podcasts to speaking at conferences to publishing articles. However, investing is as much a social contract as a business one, and nothing beats the power of an in-person connection. As a sponsor, your No. 1 tool for attracting new investors is networking. Make sure you’re tapping into ready-made networks—local country clubs, the chamber of commerce or business associations—to connect with people who align with your target audience.
Also, leverage digital platforms, including your website, email list and social media. Along with publicizing new offerings, these tools provide a great way to build long-term relationships with self-storage investors. Consider using emails, webinars, videos, and in-person and virtual meet-ups to meet with participants and provide valuable content that keeps them informed and engaged.
Prioritize Due Diligence
Managing other people’s capital is a huge responsibility. As a self-storage sponsor, you’ll need to thoroughly evaluate each opportunity before you commit resources to it. Investors want to know that you’re protecting their interests, so be ready to share details of how you approach due diligence.
In addition, set expectations around how you’ll communicate your progress. With a traditional trading platform, investors can review the performance of their portfolios and modify their allocations at any time. As passive investors, they’ll have much less control. To mitigate this, you’ll need to provide consistent, transparent updates on the performance of their assets and, if necessary, any adjustments you’re making to your business plan to optimize returns.
Leverage the Power of Trust
Raising capital, whether for commercial real estate like self-storage or another venture, boils down to a few fundamental principles. You need a solid offering with a clear value proposition and a strong network of potential investors. You should be able to communicate about your deal in a compelling way, and your stakeholders must trust that you can deliver results.
You might not always be able to guarantee performance, but you can control how you vet self-storage deals, respond to setbacks and keep investors apprised of developments in real time. By prioritizing transparency and due diligence, you can earn their respect and trust. This lays the foundation for repeat investments, paving the way for a mutually beneficial, long-lasting partnership.
Ryan Gibson is the chief investment officer of Colorado-based Spartan Investment Group, a privately held real estate investment firm specializing in the self-storage industry. To connect with him, email [email protected].
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