Self-storage facility - what to look for when inspecting?

[Erik W.]

I am looking to purchase a self-storage facility that was constructed in 2005.  It consists of a mix of 5x10, 10x10, and 10x20 units.  All are presently leased via an electronic "kiosk" style system, which also handled payment and leasing duties.  There is also a 2,000 sq ft retail building on site that is leased by a tenant who does computer and cell phone repair.  All units appear to be under market rents, which is probably why they are 100% leased.  This is in a bedroom community of my hometown that has a city population of around 20,000 and a metro area population of 250,000.  Storage is a hot commodity around here.  They are slightly off the main road, but on a decent side road that sees probably 2,000 - 3,000 cars daily.  There is presently no fencing or security cameras that I'm aware of, but I will verify that.  Parking and space around it is paved asphalt.

I am going to physically inspect the property soon.  What things should I look for regarding the condition of the metal storage unit structures themselves? 

[Scott Meyers]

One of the things I ALWAYS look for on site inspections is where my team and I can add value.  You've already mentioned a few places - the rent being low of the area and the occupancy being 100% makes me think raising the rent and intentionally aiming for 90% would be a great start.  Adding fencing is almost never a bad idea, for the obvious reasons and the subtle ones regardign how prospective customers view the security.  

I would also really try to dig into the specifics of the lease for the retail space as well as the financials of the facility itself (of course, this likely would have to wait until you have an LOI in place at the minimum, but you might be surprised what some sellers will volunteer if simply asked).

It certainly sounds promising, so make sure you keep us up to date on this - there are a lot of great folks on BP that can get you going in the right direction.