Hello clients, partners, colleagues and industry friends. As busy as life has been this last year in starting the Bledsoe Self-Storage Group, I still want to be intentional about taking a step back and sharing this journey with you. I’ve had the pleasure of meeting and connecting with so many of you in this wonderful industry over the last 19 years. My goal is to touch base with you throughout the year to share more of what’s been going on in my world and also provide some insights I’m noticing, in this ever evolving industry. So, consider this my first of many letters to you.
Our work and personal lives can be extremely intertwined, and if I’m being truly honest, sometimes just a complete blur. When I began my career in self-storage just over 19 years ago, my wife and I were expecting our son in 7 months. Fast forward to today, and now we’re getting ready for him to graduate high school and send him off to college this Fall. During that time, I’ve experienced real estate markets boom, crash and recover- twice. I’m thankful for this industry and thankful it has helped provide for my family for nearly two decades now. Time has flown by!
As you know, self-storage has just come off an 8-year run of strong property valuations, and a high volume of properties being sold each year. Rising interest rates are slowing down transactions and lowering property valuations. However, our industry is no longer a ‘best kept secret’ and investors have flocked to the market to acquire self-storage opportunities of their own. The high volume of buyers, and the historical performance of self-storage, is keeping cap rates in the 5.5% to 6.5% range nationally. Despite additional interest rate bumps from the Fed on the horizon, a majority of the damage is done at this point. Nobody has a crystal ball, but we could see better times towards the end of 2023, or into early 2024.
My words of advice to owners and operators right now would be that when financial markets become more challenging it’s truly time to invest in your facility- if selling isn’t an option in the foreseeable future. Property owners should be seeking a property valuation from an experienced self-storage broker, and exploring how to build further value for your facility. You build value in your facility by implementing revenue management strategies, completing capital improvement projects, entertaining expansion opportunities, upgrading your technology stack and reducing expenses. We are anticipating new inventory being built in many markets, and it may be worth the financial investment to upgrade your facility now.
Despite the Bledsoe Self-Storage Group being a fairly new team at Marcus & Millichap we have a tremendous amount of experience in the industry. Our less seasoned team members are doing an excellent job getting up to speed and quickly learning the industry. Having a regionally focused team physically located in the Mid-Atlantic and Northeast has been warmly welcomed by owners and national acquisition teams. We physically visit every property, and we know that’s important to the seller and the buyers who are writing offers. Everybody wants to make sure that the broker knows what they’re selling and can answer the questions needed to make multi-million dollar decisions. We have a new agent who has tremendous industry experience who recently joined our team, and we will be introducing him to the market over the next 30 days. Be on the lookout for news on this soon!
Feel free to reach out to me to have a discussion about the industry, and your property. My team & I are friends with so many great vendors, and we are more then happy to make recommendations on who can be an asset to you and your facility. Consider attending the Northeast Self Storage Expo or the Mid-Atlantic Self Storage Conference this Spring. I’ve always found these expos to be the #1 way to meet others and make lifelong business connections. I look forward to speaking with all of you in the near future at trade shows, in person at your properties or by phone.