Storage Diligence
Self Storage Due Diligence
Practical guides to the items buyers should request, verify, and question before closing on a self-storage facility.
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The One Number in the Pro Forma That Is Guaranteed to Be Wrong
Every self-storage offering package carries the seller’s property tax bill forward as if it were the buyer’s. It almost never is. In Texas and most other states, a sale is the event that resets the assessment, and the buyer who underwrites last year’s taxes is underwriting a facility that will stop existing at closing.
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The Rent Roll Is a List, Not an Income Statement
Every self-storage offering package is built on the rent roll, and every buyer treats it as the income. It is not. A rent roll is a list of what tenants have agreed to pay, and the distance between that and what a facility actually collects is where most of the surprises in a storage acquisition…
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The Land Under the Storage Facility Has a History
Self-storage is one of the cleanest uses in commercial real estate, which is exactly why buyers treat the environmental report as a box to check for the lender. But storage tends to get built where nothing else would, and the liability that comes with contaminated ground does not care what is sitting on top of…
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The Tenant Who Stopped Paying Is Still on the Rent Roll
A self-storage rent roll counts locks on doors. It does not count who is paying. Why a buyer should care about the difference between a tenant who is a week late and a tenant who is a month late, and what a facility’s auction history says about the people who have been running it.
