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