The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
When finding your niche in the self storage realm, or with any asset, it’s important to whittle down to just what you want from the market. Looking towards smaller towns, rather than the larger cities, can open up a niche space one can work with. While many investors and brands are competing in these larger popular cities, fewer are moving into these smaller areas where various services like self storage are highly sought after.
Richard Wilson: What niche or type of self storage assets do you focus on to still make money in this area?
John Manes: So, a couple things. One, and I imagine a couple of it in this conversation, is I look for undermanaged, under enhanced, under expanded properties, right? But I also look for them in suburban, secondary, and tertiary type of markets. Or, I’ll say it a little differently, is I don’t focus on the top 50 MSAs, like that big money that you’re talking about does. You know, they want the NFL cities, they want all the major metropolitans, inside all the loops and all that kind of stuff. I don’t focus on that, I try to stay out of the headlights of those guys. What I focus on is the towns that are just on the outskirts of that, or like a decent sized town that’s out someplace. Like, to me, towns like Savannah, Georgia is a great town or towns like Chattanooga, Tennessee are great towns. Where everybody else is chasing Nashville, Tennessee, I’d rather chase Chattanooga. So, or Mobile, Alabama, or something of that nature. I look at 45,000 population or better, and 45,000 medium income or better, where a lot of those guys look at 90,000 population or better and $90,000 income a year or better. I go down to the other ones. I don’t mind being the class A operator and the highest price in the market because I’m running the property way better than what anybody else in that market is doing.
Richard: Right, right. Makes sense. Okay, great.