What’s Happening Around the Country in the White-Hot Self-Storage Industry?
Self Storage Association and the
National Association of Realtors.
He is currently on the legislative
committee for the Florida Self
Storage Association as well as
the prior president. Mr. Mele is a
frequent guest speaker at industry
events, and is a contributing
writer in publications such as
Inside Self Storage Magazine and
the Mini Storage Messenger.
In 2015, are you seeing a
trend of more first-time
self-storage buyers or is
it established self-storage
owners that are dominating
the marketplace?
There is a surplus of first-time
buyers who have a strong desire to
acquire properties and establish a
foothold in select markets. However,
they are facing stiff competition
from larger investors, and not just
your historical top 10 self-storage
owners. Recently, we have seen
interest from companies who have
created funds solely for investing
in self-storage and also have
witnessed a lot of interest from
established companies that have a
history in investing in other property
types, but are looking to break into
self-storage. The stiff competition
is for high class properties in
primary markets, which is forcing
new buyers to invest in more
secondary and tertiary markets.
In short, I wouldn’t say it is more
commonplace, but there are certain
benefits to selling as a portfolio.
Do you see many
new buyers using
1031 exchanges?
Are new facility owners
more inclined than in the
past to engage third-party
management companies?
Rarely. Because of the lack of
available self-storage acquisition
opportunities, investors who have
sold an asset with the intent of
using a 1031 exchange are finding
a very competitive market when
attempting to acquire a self-storage
property. Right now, when it comes
to the self-storage market, it is easy
to sell but very competitive to buy
which makes using a 1031 exchange
difficult with this asset class.
Yes, unless they are already wellestablished or have a portfolio
of properties with high efficiency
management systems already in
place. It is getting increasingly
harder and more expensive for
individuals or one-off owners
to compete with the larger
management companies and their
commitment to tailored marketing
strategies and new technology.
Talk a bit about the
increased level of
competition to acquire
sites in your markets,
and where that buyer
interest is coming from?
Recently, A to B class properties in
both primary and secondary markets
are all generating a competitive
bidding environment among buyers.
These buyers range from the REITs
and large institutions, all the way
down to the first-time buyers looking
to acquire more assets. They are
often willing to pay a higher price
point based on potential upside
through management efficiencies,
rental rate increases, etc.
As a self-storage
commercial broker, do you
find it more commonplace
for owners to sell their
properties as a portfolio
instead of one-offs?
Self-Storage Broker in
the Southwest Region
It is definitely more advantageous
for owners to sell their properties
in a portfolio, but it all comes
down to what the seller is looking
t