168 listings. $568 million. A live look at what self-storage is asking, and what actually moves the price per foot.
When you go to buy a stock, you have a wealth of information at your disposal.
Price history, earnings multiples, bid/ask, and an infinite number of other metrics all standardized for the world to analyze 24/7.
We are far from this reality in real estate, especially self-storage.
Don't believe me? Or think I'm over-reacting?
Try your hand at this question: what is the average cap rate on the market for self-storage facilities?
Ah, to answer this question, you would need a standardized dataset of all the self-storage facilities on the market, and you'd have to use the same definition of cap rate for each property.
When you say cap rate, do we mean the last 12 months of NOI divided by the asking price? Or is it the last 3 months of NOI annualized? Do we mean the pro forma cap rate based on broker assumptions? Or the last full fiscal year of NOI?
Then, when discussing NOI, what about the one-time expenses the Seller passed through that a new buyer wouldn't pay for?
Get my point? A simple question does not have a simple answer because there is no standardization for real estate.
This has driven me crazy for years. We have an asset class with $5-$15B of annual transaction volume, yet an extremely inefficient market for understanding asset prices.
This is one of the problems we aim to solve at TractIQ, but with our release last week, we got one step closer.
For the first time, we now let our users analyze all $568MM of deals listed within TractIQ through our AI Connector (MCP).
So, for today's edition, let's break this down using our data.
If I said to you there were a bunch of 7+ cap rate deals on the market, would you be surprised?
The average across 59 listings with cap rate data is 6.92%.
Here's how they spread out.
I'll note, these are broker inputted cap rates to start, which doesn't yet have the standardization concept I discussed early. But you gotta start somewhere.
We currently have 168 active listings, $568 million of total pricing, across 5.28 million net rentable square feet.
Per the charts below, more deals are in the $1-$5MM range across the deals that are priced. Interestingly, the asking dollar PSF increases as the facility size increases.
How about looking at occupancy, is there a relationship between this metric and pricing? What about by vintage, or looking at single assets and portfolios?
| Structure | n | $/sf | Cap |
|---|---|---|---|
| Single asset | 132 | $84.18 | 6.50% |
| Portfolio | 28 | $79.80 | 7.18% |
Buy five at once and you pay less per foot at a wider cap. The portfolio premium that gets pitched does not show up on the board.
Interestingly, there doesn't seem to be a correlation between vintage, or looking at single assets and portfolios.
Taking a step back, when I first digested the data above, I couldn't believe what we were missing. But now with AI, we can take it a step further.
Keep in mind, all the data I assembled above was using our AI Connector, which all our customers now have access to.
This capability also allows you to find the best deals listed in TractIQ, like this Apple Country Storage deal listed by Taylor Dooley and Brady Mast from Meridian Storage Group.
AI Connector demo: buybox query across live listings, surfacing the Apple Country Storage deal. Nikki, drop the MP4 or the LinkedIn video URL in here.
Every number here is an asking price, not a closed sale. For the first time, we can tell you what Sellers want at scale, but we still have a lot of work to do on the sales comp and standardization side.
The good news, is this marks a major improvement in transparency, and we will continue to push forward.
Where will we be in 5-years?
