Redwood Storage aggressively seeks opportunities to acquire self-storage assets between $2M and $5M throughout the Southeastern United States. It is our goal to find exceptional, risk-adjusted assets in low-vacancy markets with a focus on facilities with below market rents.
We prefer to work with sellers directly, avoiding on-market transactions in which the price is inflated due to broker fees. We pride ourselves on finding deals the old fashioned way: with boots on the ground, a smile, and a firm handshake.
Traditionally, self storage facilities required considerable amounts of manual labor: a human in an office was needed to book reservations and take payments over the phone, admit tenants into facilities, and clean out units.
With web-based storage management systems, we can automate all of these tasks saving tens of thousands of overhead, thus increasing our NOI.
Self-storage is a counter-cyclical asset. As the economy recoils, people are forced to downsize into smaller homes or apartments, frequently face marital troubles and get divorced, and ultimately turn to self storage.
In inflationary environments when cash is cheap, people buy more and more consumer goods with no plans on getting rid of them. When they run out of room, they turn to self-storage.
As we grow, our cap rates will compress dramatically, even outside of MSA's.
As the largest generation of business owners enter retirement, the opportunity to purchase stable, cash-flowing self storage facilities will accelerate for the next few years and then drop off dramatically. Consolidators will take advantage, aggregating high-performing assets now and selling for large gains.
REITs and large private buyers need to place billions of capital each year, and are unable to achieve their preferred yields in MSAs. Diversification into large self-storage portfolios in tertiary markets provides them with a safer and higher yield option.
The short-term nature of storage rentals allows Redwood to increase prices for all of our customers just weeks after we take over management, driving revenue growth immediately.
The demand for home-office and learning environments has increased the need for external storage space.
Rental rates have increased significantly in tertiary markets as the new work-from-home movement has loosened geographic restrictions for high-paying jobs.
Behaviors that drive people to self-storage (divorce, downsizing, relocation, renovations) are more common during economic downturns, making self-storage a counter-cyclical asset and potential hedge against recession.
While many residential investors were burned by eviction moratoriums, self-storage owners were shielded. Self-storage is generally far lower maintenance than similarly priced residential real-estate.