How do I judge a self-storage facility’s nearby competition and local demand?
Visit and call nearby facilities as a customer would, noting rates, features, vacancies and condition. Then compare that with the seller’s own occupancy and inquiry records, and look for what is driving local demand and whether new competitors are planned.
Start in the field. Visit nearby facilities or call them posing as a renter, and write down rates by unit size, promotions, access hours, security and how clean and busy they look. Check how each appears online and in search results. Note any that are new, expanding or advertising heavily.
Then look at demand. Ask the seller for occupancy by unit size over time, inquiry counts, the reasons tenants give for renting and where they come from. Ask which sizes fill first and which sit empty. Local housing, moves, and nearby businesses can all push demand, so ask what the seller thinks is behind it.
Look ahead. Ask the municipality’s planning office, or have your adviser ask, whether new storage sites have been proposed nearby. Ask whether the seller’s occupancy depends on discounts. The Competition Bureau’s guidance can help you understand fair advertising. Your accountant can help you see what the facility earns when it is only partly full. Ask how the facility attracts tenants today: signs, search results, referrals or a website. A buyer who cannot replace the seller’s marketing has a weaker position, so ask what the seller does each month and what it costs.
Key takeaways
- Shop the competition as a customer and record rates, features and vacancies.
- Compare rivals with the seller’s occupancy and inquiry records.
- Check for planned new sites and for occupancy that depends on discounts.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat is Cash Flow
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