How to Prepare to Sell Your Self Storage Facility

September 6, 2018

close up of businessman hands signing contractThe self-storage industry has been expanding at an impressive rate across the U.S. for the past four decades, and its growth is expected to continue through 2020. Recent years have been viewed as favorable for self-storage owners opting to cash out on their investments. If you are thinking about selling your self-storage facility, here is some information to help you realize the maximum ROI.

Self-storage property owners who take the time to prepare a self-storage facility for sale normally find that making the following preparations will help in obtaining the best possible sale price.

  • Adjust Unit Rental Rates to Market Limits for your Particular Facility - Raise storage unit rents to the level of full market potential. This increases the facility's income and generates financials that are more appealing to buyers and that make financing more feasible for prospective lenders.
  • Prepare a Rent Roll to Help Prospective Buyers Evaluate Business Potential - Easily digestible information about rent rate structures goes far to facilitate a buyer's necessary effort to determine appropriate allocations of tier pricing, in order to make realistic income projections and analyses to estimate your facility's competitiveness in its market. Create a list of your self-storage units, grouping units by individual features. For example, categorize the units by:
    • Interior and exterior locations
    • Ground floor and upper floors
    • Sizes
    • Climate-controlled
  • Scrutinize Your Financials, and Correct any Discrepancies - Maintaining accurate and well-organized records makes it easier to sell a business. Offers from buyers are largely based on the business's income. Knowledgeable buyers typically reject a property quickly when they discover that income figures are inaccurate or too incomplete. So, as a top priority, have your books in excellent order. Be prepared to produce certain documentation upon request, including, for example:
    • Complete income records.
    • Complete expense documentation.
    • Tax filings and all other financial records in thorough, error-free detail.
    • Meticulous and thorough records and explanations of capital investment projects.
    • Expense receipts.
  • Clean Up Property Grounds - Buyers are usually more impressed with properties that look clean and well maintained. Do basic cleaning and maintenance tasks that are necessary to make the property look presentable during buyers' visits.
    • Remove trash.
    • Haul away junk cars.
    • Eliminate unnecessary items from parking lots, and along drive ways and exterior walkways.
    • Repair broken lights on and in buildings, and throughout property grounds.
    • Replace or repair damaged or broken locks, door facings, building or unit number labels, and directional signage.
    • Clean out ground and roof drainage gutters.
    • Check roofs for needed repairs.
    • Clean and freshen paint on property office building, window and door exteriors.
    • Clean up interior of property office.
    • Any other important items that affect optimal use of the facility by customers.
  • Consider Capital Improvements - If the broker who performs your property valuation suggests that certain improvements can make the property more salable in the price range you hope to sell within, you may want to make some investments, especially in the areas of:
    • Installations to add or upgrade security lighting or monitoring.
    • Security gates and fences.
    • Essential Communications systems.
    • Roofing replacements.
    • Storage door replacements (for security).
    • Walkway and/or driveway repairs and replacements (for safety).
    • Internet presence, such as acquiring a basic information website.
    • Landscaping installations (for increased curb appeal).
    • New road-front signage (for more effective marketing and property identity).
  • Get a Professional Business Valuation - Finally, before you list your property for sale, get a professional valuation to help you understand the actual market value of your self-storage business. Obtaining an objective valuation also:
    • Highlights areas in which you can increase your property value, in order to obtain the best sale price for your facility.
    • Provides an expert review of all aspects of your real estate and your facility operations.
    • Provides a professionally produced competitive market analysis (upon which the valuation is partially based) to display comparable local storage unit pricing for your prospective buyers.

For More Information
SkyView Advisors is a leading real estate brokerage, representing self-storage owners in the sale of their property or portfolio. The SkyView team focuses exclusively on self-storage business sales, making our service unique in the real estate industry. 

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