THE BIG PICTURE
INVESTOR SPOTLIGHT
JohnManes & Pinnacle Storage Properties MODERN INVESTMENT STRATEGIES OPTIMIZE A TRIED-AND-TRUE INVESTMENT.
by Carole VanSickle Ellis
W
hen John Manes, CEO of Pinnacle Storage Properties, talks about the self-storage business, he consistently gets directly
THINK REALTY MAGAZINE Most investors have seen self-stor- age facilities but have no idea they can be a great asset vehicle. Can you explain how the investment strategy works? I like to think of self-storage investing as being like buying a cup of coffee at the local run-down gas station. You walk into that dirty gas station and buy a cup of coffee – and you can buy it cheap for 69 cents. Then, you take that same cup of coffee down to your designer coffee bar, put it in a nice cup and add the right ambience like leather sofas, Wi-Fi and a cool logo, and you can then sell it for five dollars. People pay for the experience and to be part of the "cool kids' club." At Pinnacle, we take the storage unit that is a “69-cent one,” fix it all up, make it “pretty” with all new colors and new office remodel, lights, camera, gates, HVAC, etc., and then we sell it at the “five-dollar” level because people are willing to pay for a better experience, as they should be! Here’s an example of a facility where we did exactly that: JOHN MANES
(and enthusiastically) to the point:
“We buy under-managed, under-enhanced, and un- der-expanded self-storage facilities. We go in and fix them up, increase value through revenue management strategies, do expansions when the market demands it, and take a class C property to a class A one.”
Manes and his business partners, Robby Dunn and Erik Osterhus, all spe- cialized in turning distressed assets into high-performing ones in other real es- tate sectors before entering the self-stor- age sector full-time. They also all were involved in residential real estate investing. “We all owned single-family; we all owned multifamily, and now we all own storage. If you ask any of us, we would never go back to single-family investing!” Manes said. Think Realty Magazine sat down with Manes to discuss how his company and preferred investment vehicle are evolv- ing in today’s real estate market.
John Manes, CEO Pinnacle Storage Properties
Making the right upgrades and operational changes to a facility can change everything for that investment. The updated facility (see image at top) brings in about $10,000 more a month.
92 | think realty magazine :: september 2018
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