Self Storage REIT

Would you guys take a position at a self storage REIT? Seems pretty niche to me and I'm only 3 years out of school so I'm not trying to pigeon hole myself in an asset class just yet. Cause I'm not sure how you could exit to anything other than MF/MHC/etc.

Also, is this space super crowded now/are firms seeing returns? Seems like the time to be in self storage was a few years ago.

Comments (4)

 
Nov 8, 2020 - 5:21pm

Analyst 1 in RE - Comm

I'm only 3 years out of school so I'm not trying to pigeon hole myself in an asset class just yet. 

So, what are you doing now, hard to advise with only half the picture. That said...

At your stage of the game (3 yrs out), getting specialized with an asset class (or deal type/function in some contexts) is often the next step for advancement. Generic analyst skills will only take you so far (not very in all reality), you need to really know "real estate" to be good at it and be able to move up the ladder. 

I don't see anything wrong with self storage, it is becoming (has become) a mainstream institutional asset. More and more large funds are allocating to "specialty" like self storage at an increasing rate. It still largely tracks consumer demand so much of the market analysis skills will translate to multi-family, student housing, senior housing, and even retail. The physical structure is unique, but relatable to industrial (with a retail twist). The pricing and management structure is like hotels. Thus, I think if you really wanted/needed to swap, you would not be eliminated from consideration. 

Of course, once you establish a specialty of any kind, it gets personally costly to switch. You will just be worth more to the next employer because of your exp., so switching is more like a "jump" where you may face tradeoffs like one does when "lateraling" (including finding it hard to get an offer). Same deal when considering "going out on your own", it will be easiest where your resume backs up your business plan (at least from a fund raising stand point). 

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