Self-Storage Real Estate: Words of Encouragement

This week, I received a Capital Markets Insider report for the second quarter 2009 from San Diego-based Grubb & Ellis|BRE Commercial. The quarterly newsletter includes market-trends data for commercial properties, including self-storage, and insights from real estate experts, like Greg Wells, an investment sales specialist in the company’s Self Storage Group. Greg’s expertise is the sale and acquisition of self-storage facilities as well as land for self-storage development.
 
Greg has graciously allowed me to share his letter with you here. It sheds some light on the state of the self-storage market and how our business is faring in an uncertain financial time. 
 
"This Page Intentionally Left Blank"
 
This is the title of a presentation I saw recently on the state of the commercial real estate market. While the statement was meant to be tongue-in-cheek, after hearing and reading months and months of negative news, projections and predictions, sometimes it's nice to just take a break. 
 
We are all painfully aware of the current economic situation and its potential implications moving forward, so you do not need me to remind you and reiterate the talking points we hear day after day. I specialize in the self-storage sector, and we have not been immune to the economic crisis and turmoil. Sales of self-storage facilities in the western U.S. have come to a screeching halt since September 2008. In fact, in 2009, there have been a total of five self-storage facility sales in California, Arizona and Nevada combined―a drop of nearly 80 percent compared to the same time last year.
 
To this, I say, “Hang on. They are coming.” Those with equity, experience and vision should start to see unprecedented buying opportunities that offer very compelling returns and prices per square foot, well below replacement cost. We are also seeing a return to simple real estate fundamentals: quality and location. While the interim period will not be without significant pain for some, this shift back to the basics will be a healthy, needed process in the long run, and will prove to be very rewarding to those that never lost sight of that in the first place.
 
It sounds cliché and old-fashioned; however, luck favors the prepared, and the prepared should be well-positioned to prosper in the years ahead.
 
The same back-to-basics idea holds true on the brokerage side of the table as well. It is more important than ever to focus on what you know and do best. Having a focused, specialized strategy is the best way a broker can provide clients accurate, up-to-date, honest feedback on their assets and the best strategies to handle challenging issues. Armed with the best research, market data and marketing strategy, brokers can guide both sellers and buyers through these issues and arrive at solutions that meet and exceed expectations.
 
Tough times also remind us to focus and pay attention to the things that are greater than us. Spend more time with your kids, volunteer at your favorite charity, give more to those in need. Finding time for rewarding opportunities like these can help put focus back on how fortunate we are to be in a business that can offer so much opportunity.
 
Yeah, times are tough, but guess what ... So are we.
 
This is encouraging news for those of you out there who may be contemplating a sale or purchase in the upcoming year or two ... and inspiring words that help put things in perspective. To reach Greg, e-mail [email protected]. To view the full BRE newsletter, visit http://brelistings.breb.com/newsletters/cm_newsletter/2009/2q09/capital_markets_2q09.html.
 
If you’d like to learn more about self-storage real estate in today’s economy, read the following articles, written by ISS columnist Mike McCune of Argus Self Storage Real Estate:
 
Take Advantage of a Buyer’s Self-Storage Market
 
An Open Letter: Self-Storage Real Estate in This Economy
 
In attempting to refinance our home, my husband and I learned some sad facts about property value in our area, and we know we aren’t alone. Though we’d originally hoped to relocate by 2010, we’re now digging our roots a bit deeper here, until the pendulum swings in a more favorable direction. Many self-storage operators may be doing the same. Let’s hope patience pays off for all of us in the end. In the meantime, I am reminded that “Happiness is not having what you want, but wanting what you have.”