Curb appeal plays a big role in profitability for self-storage facilities since many customers find the location driving by. New landscaping, fresh paint, and a bright banner (below) added serious curb appeal to this Houston property.
AFTER: Fresh paint, updated security systems, and tenant insurance played a major role in increasing the value of a Houston facility by about $1.3 million in the year after purchase.
MAKING THE MOVE FROM SINGLE-FAMILY TO SELF-STORAGE INVESTMENTS. Case Study: When Two Worlds Collide
Retail offerings like boxes and other storage-related supplies can add substantially to a self-storage facility’s bottom line.
by Christina Alvino
ong before John Manes and Robby Dunn launched Pinnacle Stor- age Properties and eventually partnered with Erik Osterhus, they both owned single-family and multi-unit real estate investments. Like many novice investors, they spent a great deal of time fixing toilets, rehabbing units, cleaning carpets, and investing time, energy and effort into L
working in their business. The work was rewarding, but all three found the hours long and hard. Eventually, Manes, Dunn, and Osterhus all made their way into self-storage. Manes entered the sector as an employee with Uncle Bob’s Self Storage (now Life Storage), a top publicly-traded REIT within the industry. He progressed from a district
manager responsible for a handful of stores to regional vice president responsible for more than 120 properties. Dunn started out in single-family and multi-unit invest- ing, then added self-storage to his portfolio and, by 2015, had sold his first facility on a large enough margin to purchase four more. Two years later, he had exited all but one of his single-family investments
completely. Osterhus, who first became interested in self-storage in 2013 when he was looking for a place to store his boat, leveraged his background in land purchas- ing and pre-production construction for the oil and gas industry to develop several facilities from the ground up. Together, the three founded their self-storage company, Pinnacle Storage Properties, in 2016. “We wanted to handle all aspects of self-storage, from acquisition to develop- ment to management of these valuable assets,” said Manes. Since its inception, the company has purchased nine prop-
erties, expanded three existing facilities, and opened a ground-up development in Round Rock, Texas.
management, increasing rental rates after completely rehabbing the facility and up- dating security and gate systems, reducing expenses by 5.6 percent thanks to econo- mies of scale, adding retail merchandise and tenant insurance, and overhauling marketing programs and curb appeal. •
BY THE NUMBERS
CASE STUDY: HOUSTONTEXAS
PURCHASE PRICE: $1.85 MILLION CAPITAL IMPROVEMENTS: $165,000
SOFT COSTS & FEES: $175,000 GROSS INCOME AT PURCHASE: $225,549
2018 GROSS INCOME TREND: $359,556 2018 PROJECTED VALUE: $3.5 MILLION
The key to a successful self-storage investment is an effective comprehen- sive plan for the facility. For this facility, the team used a five-pronged approach that included implementing top-notch management programs focused on positive customer service and efficient property
Christina Alvino is a digital marketing expert with Fine View Marketing. Learn more about self-storage investments by emailing firstname.lastname@example.org or calling John Manes at 210-818-1496.
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