245. Self Storage’s “Lost Year” and Why Mom-and-Pops Are Disappearing w/Andrew Freeman and Jon Marshalla

May 20, 2024

Industry experts Andrew Freeman and Jon Marshalla discuss the changing landscape of the self storage sector, highlighting the struggles faced by operators in recent years. They share insights on building a successful portfolio, targeting new markets, and navigating industry shifts. The conversation covers key topics like strategic growth, cost management, market trends, acquisition strategies, and the importance of adapting to technological advancements and changing consumer behaviors.

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Introduction

00:00 • 4min

Sustainable Growth and Strategic Adaptation in the Self-Storage Industry

04:07 • 11min

Insights on Self-Storage Industry Changes and Challenges

15:28 • 4min

Navigating Challenges and Strategies in Self-Storage Industry

19:15 • 19min

Market Trends and Operational Strategies in Self Storage

38:23 • 2min

Insights on Feasibility Studies, Ownership Shifts, and Acquisition Strategies in Self-Storage Industry

40:06 • 5min

Evolution of Technology and Management in Self-Storage Industry

45:15 • 26min

The self storage industry is changing. From the Great Recession through 2021, those who bought self storage facilities saw massive rent growth, impressive appreciation, and, at times, a seemingly endless supply of renters. As the American population began to move after the lockdowns, self storage only became more attractive, and facilities were filling up left and right with occupancy rates and rents exploding. But now, things have changed.

Over the past two years, self storage operators have been hit hard. Rent drops, vacancy, and increased competition took away the “passive” income part of self storage investing. Thankfully, those who treated their facilities like businesses survived, while the casual investors either bit the dust or sold to stop the bleeding. Time-tested investors Andrew Freeman and Jon Marshalla from KO Storage were able to roll with the punches and survive a tough self storage market.

Today, we’re talking to Andrew and Jon about how they built their portfolio from zero facilities to over two hundred, plus the markets they’re targeting as the “mom-and-pop” investors slowly sell and large operators “consolidate” what’s left of the smaller facilities. Andrew and Jon even share what they’re seeing in 2024 and how they’re pivoting to control the controllable and not only survive but thrive as the storage industry continues to change.

What you’ll learn in today’s show:

Why Andrew and Jon ditched multifamily real estate to build a massive self storage portfolio
The “lost year” in the self storage industry and why so many operators got hit hard in 2022
One CRUCIAL part of your investing strategy that cannot be overlooked
The “acquisition runway” causing mom-and-pop ownership to dwindle
Why small markets, not big markets, might be even safer to invest in
Andrew and Jon’s 2024 plan to buy even more as deals become challenging to find

Previous Episodes with Andrew & Jon

Episode 105 with Jon and Andrew

Episode 142 with Jon and Andrew

Where to find more about our guests!

Andrew LinkedIn

Jon LinkedIn

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