Exceptional Year Forecast for Self-Storage Assets

 

__________main 3333310156155_10153774952672526_463495212080139631_n32

 

 

 

I can’t understand why people are frightened by new ideas. I’m frightened of old ones. ~John Cage (1912-1992)

Mar 21, 2016 Robert Carr

 

333

Few commercial property sectors have posted revenue growth as consistent as the self-storage industry in recent years. Returns for properties in the sector hit 10.0 percent in the fourth quarter of 2015 and projected supply shortages are expected to lock-in higher rents and occupancies going forward.

Major self-storage REITs have all experienced increased occupancy since year-end 2014, with net operating income (NOI) growth moving from 7.8 percent to 11.5 percent,according to an analysis by Chicago-based firm MJ Real Estate Services. Sales transactions were up as well, reaching $2.8 billion in volume for 2015.

3

Demand for self-storage just keeps increasing with the improvement in the general economy, says Marc Boorstein, principal at MJ Real Estate Services.

“We’re not even sure why, it might be the technology apps that market better for units, but we’re seeing much quicker lease-up than in years past,” he says. “Properties that used to take 48 months to fill up now are taking a year less, about 36 months, to stabilize. There’s so much demand by the customer, and by the investors as well. Where we used to get five to six offers for a property, we’re now getting 20 or more.”

The past three years have been marked by deal volumes of about $2 billion annually, partly driven by massive portfolio acquisitions. However, experts believe the primary markets have now been picked clean.

As a result, the REITs are now starting to move into the private sector’s territory in secondary markets, where the yields are better, according to Boorstein. Investors who bid aggressively can buy at a 5.0 percent cap rate, get a boost in occupancy to a 6.0 cap by the second year and move up to a 7.0 cap by the third year, Boorstein says. “The management, coupled with technology, has gotten so much better at running their properties.”

2

However, as the REITs look to complete strategic one-off deals, they don’t appear to have plans to increase construction. A decade ago, there would be about 3,000 new facilities under construction each year—today, there are only about 600 properties in development, says Aaron Swerdlin, executive managing director at real estate services firm NGKF. There will likely be only about 400 properties completed each year for the next three to five years, he notes.

“New supply will easily meet demand, with no overbuilding in sight,” Swerdlin says. “The debt markets still have a great deal of difficulty contributing at the rate sought by developers, who far outnumber the banks who can contribute capital. Plus, as all self-storage is initially spec development, even the high demand still isn’t enough to outweigh the need for up to 30 percent cash needed to gain debt—that restricts building just by itself.”

With fewer new properties, a low homeownership rate and apartment renting at record levels, there’s no reason that the self-storage industry shouldn’t continue to outperform the overall REIT markets, Swerdlin says. In a recent fourth quarter report, NGKF noted that pricing power clearly lies with the operators and should lead to both exceptionally strong revenue growth per occupied sq. ft. and overall performance during the first half of 2016.

“This year, I think you’re going to see an even higher number of transactions, though not as [many] portfolios,” Swerdlin says. “The product has truly stabilized at a level better than imagined, and it’s still one of the top asset classes in the country.”

 

SEE IT ALL:

http://nreionline.com/self-storage/exceptional-year-forecast-self-storage-assets?NL=NREI-21&Issue=NREI-21_20160321_NREI-21_928&sfvc4enews=42&cl=article_5&utm_rid=CPG09000005957475&utm_campaign=5366&utm_medium=email&elq2=0026993a77244bab9383a6e86d8f1e7a

 

FROM ME:

Phoenix Commercial Real Estate and Investment Real Estate: investors and Owner / Users need to really know the market today before making a move in Commercial Properties or Investment Properties in Phoenix / Tucson / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land in Phoenix / Tucson / Arizona.  Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties.

I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group.  I also sold  hundreds millions of dollars’ worth of  Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with  brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also international.  Click here to find out what is a CCIM:  https://en.wikipedia.org/wiki/CCIM

1

I am actively looking to build relationships with Real Estate Investors and Owner  Users  for  Retail / Industrial / Office / Multifamily and Land  in  Phoenix  –  Scottsdale   –  Tucson   –  Arizona

http://walter-unger.com/?p=15472

2

Click here to find Reasons to Consider me for Commercial Referrals

http://walter-unger.com/?p=15010

3

Click here to View My Listings and Profile

http://www.loopnet.com/profile/14101172900/Walter-Unger-CCIM/Listings/

4

Click here to find out what is a CCIM:

https://en.wikipedia.org/wiki/CCIM

5

Click here to view my website:

http://walter-unger.com/

6

Interactive Map Of All 10+ Unit Apartment Listings in Metro Phoenix

http://www.easymapmaker.com/map/28cb3b8b3206c377a6f282d980dc7974

7

Interactive  Metro Phoenix Map of New Apartment Construction by Completion Status

http://www.easymapmaker.com/map/955edc17e00b08ce270fb7afb1523cc2

8

Click here:

4rd QTR 2015  GREATER PHOENIX APARTMENT OWNER’S NEWSLETTER  Kasten Long Commercial Group.

http://klcommercialgroup.com/wp-content/uploads/2016/03/Q4-2015-Metro-Phoenix-Apartment-Owners-Newsletter.pdf

9

Click her to join my mailing list :      

http://visitor.r20.constantcontact.com/manage/optin?v=001l2E62PqC4Z3sggwR_1M9aUmjrzvHWmSVEfy9MrVW6ULRJR3XWD1R_98ZLV5AVRdcHcxwR32LZvKqcYEkVDBKEwAuD87hIYmDX8GpVxXVwjc%3D

Walter Unger CCIM –  walterunger@ccim.net   – 1-520-975-5207  –  http://walter-unger.com

2016 Official Arizona Visitors Guide

Visit Arizona

WHY PHOENIX ARIZONA : ???     

 check it out

http://walter-unger.com/?p=13391                       

 

1

Timeline of Phoenix, Arizona history

 

http://en.wikipedia.org/wiki/Timeline_of_Phoenix,_Arizona_history

2

Phoenix, Arizona

 

http://en.wikipedia.org/wiki/Phoenix,_Arizona

 

3

Facts of Arizona – year 1848 to 2013

http://walter-unger.com/?p=9507

Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.

  •  

walterunger@ccim.net 1-520-975-5207

Check out my professional profile and connect with me on LinkedIn.

http://lnkd.in/bezpJ8t

Follow me on Facebook:

https://www.facebook.com/ungerccim

  •  

Follow me on Twitter:

https://twitter.com/Walterunger

Follow Me on Google+

https://plus.google.com/u/0/b/114560883588623379451/

 

Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages.  The interactive map  shows the location of each community (10+ units) and each location is color coded by the size (number of total units). 

Click here for Map of Apartments for Sale (10+units)

  •  

 

Walter Unger CCIM, CCSS, CCLS

I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years.  If you have any questions about Commercial / Investment Properties in Phoenix or Commercial /  Investment Properties in Arizona,  I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us. 

  •  

Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207

 

www.Walter-Unger.com

 

Walter Unger CCIM

Senior Associate Broker 

Kasten Long Commercial Group

2821 E. Camelback Rd. Suite 600

Phoenix , AZ 85016

Direct:    520-975-5207   

Fax:       602-865-7461

walterunger@ccim.net

www.Walter-Unger.com    

www.KLCommercialGroup.com

View My Listings and Profile

Join My Mailing List

What is a CCIM?

Reasons to Consider me for Commercial Referrals

 

  •  

Delivering the New Standard of Excellence in Commercial Real Estate 

  •  
  • Commercial Real Estate Scottsdale
  • Commercial Real Estate Phoenix
  • Commercial Real Estate Arizona
  • Commercial Investment Properties Phoenix
  • Commercial Investment Properties Scottsdale
  • Commercial Investment Properties Arizona
  • Land Specialist Arizona
  • Arizona Land Specialist
  • Land Specialist Phoenix
  • Phoenix Land Specialist
  • Land For Sale Phoenix
  • Land for sale Arizona
  • Commercial Properties For Sale Phoenix
  • Commercial Real Estate Sales Phoenix
  • Commercial Properties Phoenix
  • Commercial Properties Arizona
  • Commercial Land Specialist Phoenix
  • Commercial Land Phoenix
  • Multifamily land Phoenix
  • Retail Land Phoenix
  • Industrial Land Phoenix
  • Land Commercial Phoenix
  • Land Retail Phoenix
  • Land Industrial Phoenix
  • Land Multifamily Phoenix
  • Industrial Land for sale Phoenix
  • Land Industrial
  • P
  • Investment Real Estate

 

Disclaimer of Liability

The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.