Self-storage has emerged as one of the most resilient and consistently profitable sectors in commercial real estate. Today's interest-rate environment, combined with our all-equity structure, opens an unusual window to acquire well-located assets at favorable basis.
During the COVID-19 pandemic, one of the most severe stress tests for commercial real estate in recent memory, self-storage outperformed every other major property sector. Peak-to-trough value decline by sector:
Source: Green Street Advisors
Self-storage has consistently outperformed other real estate sectors. Over the past 25 years, average annual returns have approached 18%, and during the COVID-19 pandemic the sector saw only a 16% peak-to-trough decline, versus 49% for senior housing, 38% for lodging, 28% for retail, and 23% for multifamily.
Demand for storage tends to hold or grow during economic downturns. Households downsize, businesses store inventory or equipment between leases, and life transitions (moves, family changes) accelerate. The asset class produces stable, predictable cash flows that don't depend on a bull cycle to perform.
Persistently elevated rates have suppressed transaction activity. Leveraged sellers facing balloon maturities are increasingly willing to transact at favorable prices to cash buyers. Our all-equity structure positions us to act quickly when those opportunities arise.
Smaller and mid-sized self-storage facilities are often under-managed. Modest improvements (rate alignment, payment discipline, digital marketing, customer experience) translate directly to NOI growth and asset appreciation. Our edge is operational, not financial.
Every deal we close moves through the same disciplined sequence, built over fifteen years of self-storage operating experience and refined across our own acquisitions. We do not pencil deals on hope. We pencil them on documented gaps that operational work can close.
We screen every market against three hard thresholds before a deal advances. Population growth must clear 1% annually. Average household income must exceed $50,000. National rentable square footage per capita averages 7.5, and we benchmark each submarket against that figure. We also pull the active development pipeline through permitting offices; a property with new ground-up supply coming online is a different deal than one without.
We shop every comp by phone, posing as prospective tenants. We ask about waitlists, current asking rates, promotional pricing, and unit availability. We then visit the market: drive the comps, walk the downtown, sit in the diners and ask locals what they think about the area. Demographic data from RadiusPlus tells us what should be true; on-the-ground shopping tells us what is.
We model current rents against street rates, economic versus physical occupancy, payment mix, and the gap between trailing performance and reasonably achievable performance under disciplined management. A facility renting 20% below market with loose collections is a different opportunity than one already at-market. We don't pencil deals on hope; we pencil them on a documented gap that operational work can close.
Once under contract, we run the full sequence: Phase I environmental study (Phase II if anything irregular surfaces), third-party property inspection with a credit proposal back to the seller for material findings, feasibility study, title work and ALTA survey, two years of insurance loss runs, three years of operating statements with general ledger, and full review of the in-place lease forms and tenant rolls.
Every deal underwrites to a 3 to 5 year hold with a 1.8× target equity multiple. We test our basis against replacement cost, typically $75 to $80 per square foot for ground-up self-storage construction (land at $15 to $35/sq ft plus build at ~$50/sq ft). If we can acquire at or below that figure, with a defined operational lift, we have a defensible exit at multiple price points.
The bottom-line test: if a property cannot be acquired at or near one percent of monthly revenue, and cannot be operationally lifted to materially better economics, we walk.
We closed on Bob Hall Self Storage in Dothan, Alabama in February 2025 at our underwritten acquisition basis. Below are the actual operating results from the first thirteen months, independently reported to limited partners in our March 2026 investor update, and benchmarked against the pro forma we underwrote at closing.
The facility was acquired at 75% physical occupancy and re-launched under the Safelock Storage brand within thirty days. By October 2025, occupancy reached a peak of 84.9% (191 of 225 units), driven by targeted Google Ads, SpareFoot listings, and a credit-card-first payment infrastructure. Rental rate increases were implemented in late 2025; the resulting December dip to 79.6% was anticipated in the original underwriting and recovered to 82% within sixty days.
Entering Q2 2026, Bob Hall carries zero current delinquencies, 52% auto-pay enrollment (up from 44% at acquisition), and monthly revenue tracking ahead of our underwritten projection, with 36 vacant units of further lease-up upside heading into spring.
We said the value-add in self-storage is operational. Here's what operational means in 2026.
Both GPs work out of the same version-controlled repository. Every analysis, feasibility model, tenant check, and operating procedure lives here, not scattered across Dropbox folders or buried in email threads. Our AI tools run out of it. When one of us underwrites a market or reviews a property's financials, the context is available to both of us immediately. We replaced cloud storage with code. A small change that compounds every time we need to move fast.
We run our books through Kick, which exposes an API that connects our accounting directly to our operating data. Weekly revenue and expense digests run on a cron. Expense categorization happens at ingestion. Reconciliation takes minutes. We don't pay a bookkeeper to do what the software does faster and without error. The dollars saved are small on their own; across a multi-year hold, they add up.
A property manager can't be on call seven days a week. We're deploying AI voice agents to handle after-hours tenant inquiries: gate codes, payment links, delinquency status, unit access. Tenants get an answer at 10pm on a Sunday. We don't get the call. We watched the same pattern (an AI voice agent on the front desk) eliminate meaningful staffing overhead at a multi-location dental practice. There's no reason it doesn't work at a self-storage facility.
Our previous web presence was a GoHighLevel site maintained by a retained contractor. We replaced it entirely, built it directly against our property management software's API, and deployed it on Cloudflare. One contractor off the payroll. Reservation and payment flows we fully control. Google Ads connected directly to the system it's driving traffic into, so conversion tracking is ours and the optimization loop is closed. It cost us an afternoon.
Our gate went down recently. Normally that's a minimum $400 service call: someone drives out, diagnoses, bills hours. We were onsite, pulled the cover off, and walked through the repair step by step with an AI model. Thirty minutes. Zero cost. We then turned the repair into a written training spec for our property manager. Every time this happens, we build institutional knowledge instead of writing a check. Over a three-to-five year hold, that compounds in ways that don't show up cleanly in a pro forma but absolutely show up in NOI.
We're building an operations layer that synthesizes accounting data, incoming calls, and marketing spend into a single weekly digest, delivered automatically, without anyone going looking for it. The goal is to know when something is drifting before it becomes a problem. Small portfolios don't usually have this kind of operational visibility. We're giving ourselves an advantage that scales across every property we add.
None of this is a technology pitch. It's a description of how we run lean, reduce vendor dependencies, and compound the operational advantages we identified at underwriting. In a sector where margins are tight and human error is expensive, eliminating both is the job.
Many funds chase self-storage returns. Few do it without leverage, without outside influence, and with the investor's economic interest placed first.
Our deals are funded with equity, not leverage. Returns are not magnified by debt, but they are not exposed to refinancing risk either.
We work directly with our LPs by name, not through institutional intermediaries. Reporting, decisions, and access all come from the operating team.
GP carry is junior to limited partner economics. We make money when our investors make money, not before.
Every dollar invested is tied to a deeded, income-producing property. Not a paper claim, not a synthetic structure.
Our standard deal structure prioritizes the limited partner's return before any GP carry is earned. Illustrative figures below reflect the Eastman Self Storage deal. The actual terms of each opportunity are detailed in the offering memorandum for that deal.
Figures are projections derived directly from our internal pro forma and may or may not be realized. They use conservative expense estimates and assume zero asset management fees. The average annualized return excludes depreciation benefits, which we estimate add ~3% in net annualized value through pass-through tax savings.
Each opportunity has its own confidential offering memorandum with complete financials, market analysis, and operating plans. We share them with qualified persons under NDA.
