Great Investment Opportunity in Self Storage Market!

A recent article in The Wall Street Journal  by A.D. Pruitt reports a growing demand for a surprising class of commercial real estate.  Self storage, although a quiet and small market, has, "became more popular over the past few years after catching the eye of a growing number of private-equity investors and entrepreneurs who, armed with cheap financing and dwindling options for high-yielding investments, started bidding up properties," according to Pruitt's article "Self Storage Gains Cachet as Values Rise."
A recent sale of self-storage properties by Acadia Realty Trust for $300 million has gotten a lot of attention recently because of the exceptionally low 5.5% cap rate on the deal. A 5.5% cap rate is interesting to investors because, " As the amount that an investor is willing to pay for a building rises, the cap rate falls. In other words, falling cap rates means rising values." The Acadia sale, along with a few other transactions, have had, " cap rates...similar to those on trophy office skyscrapers and upscale apartment buildings."
A couple of things contribute to the growing popularity of self storage; first, there is the perception that consumers will always need storage options regardless of the economic climate. Another contributing factor is the relatively small supply of storage space and the conservative building plans for the future. This lack of supply, and therefore competition, means that raising rents is a fairly common and painless concurrence. " Landlords...have been raising rents 5% or higher over the past couple of years on existing tenants."
This trend of rising rental rates and increasing value for self storage commercial real estate might not continue forever, but for the moment self storage is one of the hottest games in town.

Compass Commercial Real Estate, based out of Winter Park Florida agrees with The A.D. Pruitt Report. Compass Commercial manages and sells Commercial Real Estate throughout Orlando and the Central Florida area. Mike Sigrist of Compass Commercial Real Estate says they have a facility in Kissimmee name "The Attic Self Storage" that is available and it would be a fantastic investment opportunity for any investor. The asking price is $995,000 and Mr. Sigrist say's that is a steal for any investor right now. You can see the facility at www.theatticfl.com

Mr. Sigrist states there has been an upswing in the Commercial Real Estate market in the last year, we are very excited about the future of Commercial real Estate and the investment opportunities we can take advantage of as well as our clients can take advantage of for 2013. Please visit Compass Commercial Real Estate to see more investment opportunities!