Self Storage exhibits distinct performance characteristics throughout various market cycles. Industry research, including reports from NAREIT and FITCH CMBS in 2020, indicates that its performance remains appealing both in favorable economic periods and during downturns.
When a tenant vacates, we simply broom sweep. Unlike other asset classes, Self Storage does not require material landlord costs to backfill tenant spaces.
The building rarely requires more than 8 subcontractors to fully develop the building. The simpler the build, the lower the risk for an on-time and on-budget delivery.
We have developed retail and mixed use for 20+ years. Adding a retail component to the bottom floor to overcome zoning challenges was a natural. Mixed use integration has turned plenty of NIMBYs to "Welcome To's".
Self Storage is often sold at Certificate of Occupancy (before any leasing occurs), at approximately 50% occupancy, and at stabilization. These varying exit options are unique to Self Storage.
We are market-up, not asset down. We find a market we believe has a demand anomaly and we execute on four investment options: programmatic development, mixed use development, acquisition of an existing asset, and conversions. And we often add to our holdings in a market to garner greater market share.
Our philosophy is guided by the consideration of risk in relation to the time it takes to reap the rewards. We believe that the self-storage sector presents lower risk compared to many other asset classes for several reasons. Firstly, it requires less capital investment. Secondly, the construction of self-storage facilities is relatively straightforward. Additionally, self-storage has demonstrated its resilience during challenging economic cycles, as evidenced by its performance during the Great Recession and the disruptions caused by COVID-19. Moreover, the potential for different exit strategies adds to its appeal.
Furthermore, the rewards in the self-storage sector can be realized within a shorter time frame compared to many other commercial real estate assets. In our view, prioritizing speed is crucial to success.
LEITBOX STORAGE PARTNERS, LLC
The Protective Center - 2801 Hwy 280 S, Suite 345, BHM, AL 35223
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Securities offered through Orchard Securities LLC, member FINRA/SIPC. The information contained herein is for informational purposes only and is not an offer or solicitation to purchase any securities.
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