Your Guide to Buying a Self Storage Facility

The self storage industry has been booming in recent years. In fact, this $38 billion industry has grown by 2.1 percent annually since 2018. If you’re interested in entering this rising industry, follow Sunbelt Business Brokers’ steps for successfully buying a self storage facility or warehouse.

5 Steps to Buying a Self Storage Facility

Utilize this list of critical steps for guidance when buying a self storage facility or warehouse.

1. Do Your Research

Buying a business is a life changing decision. Ensure you’re ready for the commitment of owning a storage facility by doing comprehensive research on hours, necessary skill sets, and projected revenues.

If you’ve done all of the above and you’re still interested in buying a storage facility, begin researching self storage businesses for sale in your area.

2. Weigh Your Options

Based on the list of storage facilities for sale in your area, do any stick out to you? Some major factors to consider when comparing facilities include:

• Location of facility: Ideal locations for storage facilities are in convenient, high-traffic areas.
• Population in area surrounding facility: The ideal number of people within several miles of the facility should be somewhere around 50,000.
• Number of units: Determine how many units are available at the facility and how big each of the units is. Remember: More units equals more money!
• Facility Condition: Consider the condition of the facility, the property, and the potential maintenance expenses.
• Staff: Some facilities and warehouses are owner-operated, while other facilities have a maintenance team and management team. Determine whether you want to be involved in the day-to-day operations of the business, or have a team.
• Price Per Unit: Research the price difference between similar units at various facilities in your area.
• Type of Units: Take into consideration the key features of units. Climate-controlled units may be of more value to some customers.

Equipped with specs on all of the available facilities, you’ll be able to take key factors into consideration and determine which facilities match your desired criteria.

3. Ask Questions

After selecting a storage facility to pursue, you must follow the due diligence process. After signing the non-disclosure agreement and any other necessary contracts, be sure to ask the owner:

• Why are you selling the storage facility?
• What are the current expenses of the facility?
• Will the existing owner and staff stay on after the sale of the business?
• What is the current occupancy of the facility or warehouse?
• What condition is the building in? When was the last time the facility’s key features, such as the roof and parking lot, were updated?
• Are cameras, gates, and other security measures in place?
• How do tenants pay monthly rent?

In addition to questions about the assets associated with the business, you’ll also want to review important financial documents, tax statements, contracts and occupancy reports.

4. Analyze the Asking Price

Based on all of the information you’ve gathered about the business through the due diligence process, consider the asking price. If a professional valuation service helped calculate the asking price, there may not be much room for negotiation. However, if the owner chose the asking price without getting a third-party opinion, you likely have more wiggle room.

5. Negotiate and Close the Deal

If you’re satisfied with the answers and information the owner provided, it’s time to make an offer. It’s important to note that negotiations and contracts can be complicated, so it’s best if you hire a professional to guide you through the process.

While hiring a lawyer will certainly help you when it comes to contracts and the legalities of the sale, a business broker can help you throughout the entire buying process. Business brokers have an extensive network of contacts selling businesses, as well as experience identifying opportunities, conducting due diligence, negotiating sales, and closing deals.

For help buying a self storage facility or warehouse in your area, connect with your local Sunbelt Business Brokers office.