by John Stevens
July 8, 2011 1:49 PM
Forrest Gump was a great movie with a lot of scenes that will forever be considered iconic to the movie industry. Tom Hanks’s character appeared to be one of the luckiest individuals on the face of the planet with all the things that happened to him. His investment in that company with the fruit logo (Apple Computers) was a perfect example.
Investing money is a challenging pursuit to say the least, and one with more pitfalls and problems then solutions and answers. Finding the right investment, especially one as lucrative as Apple was for Gump, can be about like winning the lottery.
However, there are plenty of solid investments that will give good returns, not Apple-type money, but a respectable profit. The self storage industry has proven to be one of the more reliable ones in recent years.
Run an internet search for ‘self storage’ and you are likely to find a handful of stories on any given day about self storage facilities selling for millions of dollars, many of them by real estate investment trusts. W.P. Carey recently paid $86 million for 24 self storage facilities from A-American Self Storage.
“We’ve been investing in storage for a long time now and typically deals of this size of portfolios don’t trade that often,” Elizabeth Raun Schlesinger, the W.P. Carey director that worked on the deal, says. “It’s tough to gain this type of scale in the industry in one transaction, primarily because of the property type.”
Strategic Storage Trust, Inc recently spent close to $21 million on one facility (and 7.3 acres of adjacent land) in Ladera Ranch, CA.
"This Class A property in a Class A market represents the face of our expanding portfolio," said H. Michael Schwartz, SSTI's chairman and CEO. "Since this flagship self-storage facility is located next to our corporate office, we will be utilizing this property for our training program in addition to conducting investor tours."
The profits are not just to be had within the United States though. Big Yellow Storage is the largest self storage facility owner in the UK. According to reports, revenue went up a respectable 6.3 percent to 15.3 million pounds ($24.4 million), almost a million pound increase from the same time last year (14.4 million).
“Given the continuing uncertainties in the macroeconomic environment it is right to remain cautious,” Chief Executive Officer James Gibson said in the statement. “We are however encouraged by the continuing positive performance of this business.”
Sources Used:
“Big Yellow Storage Revenue Rises on Increased Occupancy Rates.” Bloomberg.com; 08 July 2011.
“Strategic Storage Trust, Inc. Acquires $20.9 Million Ladera Ranch Facility and Adjacent Property.” Marketwire.com; 08 July 2011.
“W.P. Carey Buys $86M Self Storage Portfolio.” GlobeSt.com; 06 July 2011.