Investors who buy self-storage properties are being more careful about which assets to bet on, but they continue to be willing to pay top dollar for these properties.
“The buyers are getting much more selective… there has been a lot of continued concern about supply,” says Brandon Karr, first vice president and director of the national self-storage group in the Fort Worth, Texas office of brokerage firm Marcus & Millichap.
Investors are worried about the number of new self-storage properties opening across the country.
To avoid competition from new properties coming on-line, many buyers have turned their attention to secondary markets, where fewer new self-storage facilities have opened. Meanwhile, buyers in overbuilt markets are taking more time to underwrite their deals, double-checking assumptions about future leasing and rent growth.