Self Storage Due Diligence

Self Storage

I hired Sterling to open our 80T sq. ft. project in Seattle in 1996. They achieved stabilized occupancy within a year, and have since maintained in excess of 90% occupancy even in the most of difficult economic times. We are now expanding and trust Sterling to achieve the same results. We are also developing a new site and will look to Sterling's leadership to achieve RESULTS. I trust Sterling.

Tom Nickerson

Nickerson Investments, LLC

I partnered with Sterling to acquire a underperforming project in Port St. Lucie. Sterling had the skill to bring the project into peak performance quickly. We sold the project in 2002 and earned a handsome ROI together.

Carl Minieri
President
Wyndham Investments

Since 1996, Sterling has delivered 90+ percent occupancy rates at both our mini-storage facilities, despite severe economic challenges of the 2010+ era. They also did the feasibility study, start-up, and fill-up within one year of our latest project.

Carl Mineri
President
Tropicana Mini Storage

Since the inception of Storage King, Sterling Management has been an invaluable asset. Their expertise in the storage industry has been key to the success we have experienced and their diverse and creative way of thinking has helped us through the economic decline.

Joe Caparelli
Managing member
Storage King, LLC.

Sterling managed six self-storage projects my partners and I acquiried through bankruptcy in the late 1980's. Sterling took 40% non-performing projects and turned them into 95%+ profit centers within one year. Sterling ran the projects for 6 years until we sold them. Sterling not only made us money in all of these projects, they achieved results far beyond our wildest expectations.

Eugene Rosen
Managing Director
Litchfield Companies, LLC.

Iâ€™ve done business with Sterling principals since 1984, and partnered with them on several projects since 1997. Three words say it all: Trustworthy, Smart, Results.

W. Major Chance
President
Income Property Group

In 1994, my company partnered with Sterling to develop a full-service record storage center, Sterling Records Management, Inc. My partners and I feel that Sterling principals are outstanding business people, and our relationship has proven to be extremely profitable, even beyond our greatest expectations.

Eugene Rosen
Managing Director
Litchfield Companies, LLC.

Sterling Management Services has performed dozens of due diligence studies for prospective buyers since 1984.

STORAGE FACILITY DUE DILIGENCE

Our facility due diligence study provides critical information to Buyers of existing Self Storage projects. Typically sales price is determine by a market cap rate that equates to a percentage number of Net Operating Income (NOI). Market Cap Rates fluctuate based upon demand.

That Cap Rate can range from 7 to 11 depending upon the strength of the economy, availability of product (are there a lot of self-storage on the market or are they hard to find), and condition of the facility. As an objective third party, our detailed, yet concise study validates to your investors and financial institutions that your purchase is viable, the marketplace stable, and pricing has been based upon reliable NOI numbers.

The Study Includes:

Competition Analysis - Information collected in the study includes specific data pertaining to competitive facilities within the market area, for example:

Type of construction
Type of management
Occupancy percentages
Appearance Amenities
Rate Survey Number of Units
Combined rate comparison of market

Location: Specific conditions affecting the proposed site

New facilities either in construction, proposed or pending approval
Existing facilities that are planning expansions
Analyzes ingress/egress, proposed changes in the community, or other factors that could affect the viability of the project

Pricing - The study will include a complete rate survey along with an average rate by unit size in the subject market. Sterling will then recommend pricing for the subject site to create a Gross Potential Income for the site. This information can then be used to create pro forma projections by the developer and/or will become the basis of the pro forma created in the Business Plan.

Site Audit - Physical inspection of the site and records to include:

Review computer software used to management the site, and generate relevant A/R and Occupancy reports and histories.
Review receivables and collection process.
Review storage agreements to confirm that all tenants have signed a written agreement and review for completeness.
Move-outs - scan names/units looking for recent move-in/out duplicate activity.
Foreclosure Units - audit files for adherence to legal procedures; physically inspect units for lockout, seal, inventory of unit/photos.
Unit Inventory - verify vacant units are, in fact, vacant; rented units match computer; review overlock/vacant unit lock procedure.
Grounds Inspection - Building exterior condition; hallways, doors, lighting, drives, landscape, signage, office, equipment, cleanliness.
Procedure Review of all operational forms.

Financial Review - Review financials provided by Seller to determine if NOI is a reasonable reflection of on-site records and operational history (from on-site audit).

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