Should you invest in Net leased commercial Property? Or Multifamily or Self-Storage?

Who would invest in Self-storage properties?

ATLANTA – Within 12 months, Stein Investment Group is set to bring almost 250,000 square feet of self-storage facilities to metro Atlanta, a region dotted with suburban and urban sub-markets with a dearth of this asset type.  Construction is currently underway in the Old Fourth Ward on Decatur Street Self-Storage that will provide modern storage solutions to residents of the surrounding urban, residential communities.

Selfstorage 2

The REITs are the major owners in a largely fragmented sector, as about 80 percent of self-storage properties are owned by small mom-and-pop-type firms. But private equity is starting to enter the sector.

What is expecting return of investment?

Long-term returns for self-storage beat out all other commercial real estate sectors, The five-year average return for self-storage is at 24.4 percent, the 10-year average is at 17.8 percent and the 15-year average is at 20.3 percent, beating out the closest sector, multifamily, by about 400 basis points for each category. These numbers, as well as a lack of new supply and unusually high demand, have led to increased competition for assets.

multifamily Building 3

Comparison Table

Property Type Five-year Average of ROI
Multifamily 24% or 4.8% per year
Self-Storage 24.4% or 4.88% per year
NNN CRE 27.5% or 5.5% per year

NNN CRE Various

This simple comparison showing the return of Net Lease commercial property has the highest return of among these investments.

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5 thoughts on “Should you invest in Net leased commercial Property? Or Multifamily or Self-Storage?

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