Location-Based Consumer Services · Buyer guide
Buying a Self Storage business
Published · Reviewed by The Diligence Standard Team · Updated
Storage facilities can look stable at high occupancy, but concessions, delinquency, deferred site CapEx and new local supply can weaken the true economic picture.
How the business works
Occupancy, effective rent, delinquency, unit mix, site condition and local supply determine value. Real-estate economics often dominate the transaction.
Risks to test
- High physical but weak economic occupancy
- Deferred roof/security/paving CapEx
- New competing supply
- Poor rent-roll data
- Property tax/insurance changes
- Manager dependence
Evidence to request and reconcile
- Unit-level rent roll
- Occupancy and rate history
- Delinquency reports
- CapEx/maintenance history
- Property tax/insurance
- Local competition/supply
Decision questions
- What is economic occupancy after discounts and delinquency?
- How much deferred site CapEx exists?
- What new supply is coming nearby?
- Are recent rent increases sticking?
- How much management labor is required?