There is nothing wrong with trying to do something challenging on your own. The feeling of doing a job well-done is a good one, and something that everyone needs to experience at some point in life. However, one of the many tricks to be successful at whatever you do is to know when to strike out on your own and when to seek out and accept help.
The self storage industry serves as a great example of both concepts in practice. The majority of the 46,000+ self storage facilities across the nation are not owned by corporations. Most of them are owned by individuals who may own a couple facilities, but often times only own one.
Since the industry grossed over $20 billion in 2010 these individual owners must be doing something right. Corporations and investors have taken note of this and have begun to realize what a valuable investment that the self storage industry can be.
As a result there have been a number of business entities that have buying self storage facilities up as fast as they can. One such company has been Virtus Real Estate. In 2010, they purchased over one million square feet of storage space for close to $50 million.
“In times of fiscal decline, the self storage market has demonstrated resilience, while also posting solid gains throughout economic resurgence,” said Terrell Gates, CEO and founder of Virtus Real Estate.
In 2011, Virtus has made plans to spend another $150 million on self storage properties.
Not everyone has that kind of capital to throw around though. Some are looking to invest on a smaller scale. Storage Pros Management LLC recently added another facility to their holdings, bringing their total to 19 owned to go with the 39 that they manage.
What makes this one more unique than their other holdings is that it is the first in a joint venture with Virtus Real Estate.
“…We are confident that our joint venture with Virtus will lead to continued rapid growth in our target markets of New England, the Midwest and Southeast U.S.,” David Levenfeld, President and CEO of Storage Pros said.
Partnering up with larger companies to make acquisitions is one way in which companies have joined forces to grow. Another way has been through third party management.
It is one thing to find investors to be able to pull resources and buy self storage facilities; unless they know how to operate the facility they will never turn a profit. That is where some companies have turned to third party groups to run the facility.
“The biggest advantage is we can insert a proven business model into an owner’s facility,” says Stuart Wade, director of business development for AAAA Self Storage. “Our experience as an owner of self storage for our own account (not just for others’) is invaluable to an operator whose main business is something other than self storage.
Whether you want to go it alone, join forces with a larger company, or get some help from a third party manager, the possibilities in the self storage industry are endless!
Sources Used:
“Storage Pros Acquires Extra Space Storage of Fall River (MA): Initial acquisition by new the new Storage Pros-Virtus Real Estate Capital Joint Venture.” PRWeb.com; 20 September 2011.
“Virtus Real Estate Purchases 20 Self-Storage Properties in 2010.” docstoc; 28 December 2010.
“Third Party Management – Bringing a Proven Business Model to Your Facility.” SSA Globe; May 2011.
2011 SSA Fact Sheet; Self Storage Association.