14 Oct 2024
The acquisition market has faced challenges with high interest rates and low street rates, but David Spencer from The Storage Acquisition Group is optimistic. As interest rates are forecasted to drop, the gap between buyer and seller expectations could narrow, leading to more deal volume. With global investors still seeing self-storage as a safe investment, the future looks bright for acquisitions in this resilient asset class.
James: Hey everyone this is James with Radius+ and today with David from the Storage Acquisition Group.
David: Hey how you doing James?
James: Doing awesome. Can you tell me a little bit about what you guys do in the industry?
David: Yeah we've been working on the acquisition of off-market facilities for roughly 10 years or so now. Facilities of all sizes, portfolios of all sizes, really all over the country.
James: Great so you know better than anybody what a tough acquisition market has been in the past year or so. But with interest rates forecasted to come down David, what do you see in terms of bridging the gap between buyer and seller expectations and hopefully leading to more acquisition volume over the next couple of months?
David: It’s not just the interest rates, we also have issues on rate. Street rates are low in a lot of markets and it's making it difficult for deals to pencil out, has been for a long time. But hopefully with interest rates coming down we'll get a little closer to you know lowering the delta between where the buyers are and where the sellers want to be.
James: 100 percent and you know one thing that really happened in our industry in the past couple years was capital markets groups and big money have taken interest in self-storage. What have you seen on your end in terms of bigger buyers, Wall Street money coming in trying to acquire self-storage properties? What have you seen?
David: Well it's not just Wall Street, it's investors literally all over the world that want to get into the market. It's for its consistency as much as anything else and so even though it's been a little yeah for self-storage down market maybe over the last couple years, transaction volume wise, people are still seeing it as a safe place to invest their money and I don't see that changing anytime soon.
James: Right, 100 percent. I think history proves it best that this has been a resilient asset class that investors can invest in to stabilize their portfolio in good times or bad economically.
David: Absolutely, absolutely.
James: Well David, thank you so much for your time and hope you have a great show. You too.
