Not-So-Extreme Makeovers: Smart Investors Look At Class C Properties For Growth


    93100472-300x225Despite a declining housing market that prompted a pause in the self-storage market in 2007, self-storage real estate remains an attractive investment for investors large and small. The industry’s robust years brought more institutional investors into the field, and that trend continues as we enter 2008. With deep pockets, these investors have their sights set on Class A properties, which are typically newer, state-of-the-art facilities set in prime locations. With the run-up in Class A prices in recent years, many operators and smaller investors have been priced out of the Class A category. Many of these investors are left to pursue Class B and even Class C facilities that generally are older, first- and second- generation properties. These investors are analyzing these real estate types to determine the best turnaround candidates for upgrade. With a fresh coat of paint, some re-paving, and sometimes, a complete tear-down and renovation, even some of the unloved Class C properties are getting makeovers and commanding rents that can approach those of Class A facilities. “The larger institutional players are more interested in buying Class A or Class B properties in markets where they need additional facilities, and they’re shying away from ‘C’ properties that are first-generation and early second-generation product because they take too much time and energy to bring them up to their standards,” says Chico LeClaire, vice president/investments and senior director of the National Self Storage Group of Marcus & Millichap in Denver, Colo. Click Here to Read More….]]>


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