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Tips to Think About if You are Trying to Sell Your Facility

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  • Tips to Think About if You are Trying to Sell Your Facility

    Usually when I post a thread, I share a link to an article that I personally find interesting or think yall would like, and then try to encourage yall to give feedback and share your experiences, which usually just leads to backlash against my methods. This time around I thought I would try something different.

    Instead what I am going to do is just post a link and STRONGLY encourage yall to check it out. There is some very interesting information here that I think yall would really be interested in.

    That article talks about 5 tips to consider if you are trying to sell your storage facility, which I would imagine alot of you are. I am strictly posting it to share the knowledge, just in case there is anyone out there who has not seen it yet. Feel free to ignore it if youd like but if even just one person takes something away from this article I will be happy. Enjoy.

    http://blog.selfstorage.com/self-sto...-for-sale-3082
    SpareFoot
    http://marketing.sparefoot.com
    @SpareFoot

  • #2
    Re: Tips to Think About if You are Trying to Sell Your Facility

    SF Matt:

    I like the new approach - Take It or Leave It should work well. I read the entire brief article when I saw that someone who I consider one of the smartest guys in self storage, Mel Holsinger, was quoted. It is hard to cover such a big topic with just a few paragraphs.

    Having done acquisition due diligence for many years there are just a few additional cautions that I would add to the article. First, sellers have to understand that if done correctly a buyer's due diligence will be worse than an IRS audit; simply because, unlike most IRS Auditors, many buyers know what to look for in your numbers.

    And, Second, it can be a very demoralizing time for the facility managers. Unless you are very strict with the broker about potential buyers going to the facility, you have to be prepared for a parade of not very good Mystery Shoppers stopping in unannounced. I feel strongly that as an Owner you owe it to your site staff to let them know that you are getting ready to sell the facility. I have seem too many cases where the managers realize that the facility is being sold out from underneath them and they are off to greener pastures even before the deal is consummated and the owner is scrambling to keep things going. In some cases, the deal never closes and your managers are gone. Most managers, if they realize that there is a financial carrot in it for them to see it through to the end can be instrumental in helping getting the owner through the due diligence process. Let's be honest, you did take the financial risk to build or buy the facility, by your managers have been "The Face and The Heart" of the business to the customers that they have rented to and kept satisfied over the years that produced the profit you are now selling.

    One final thought for every seller to understand. All of those "complimentary units" that you have provided to family - friends and local charities that show up as rented on your Management Summary are considered vacant because they do not produce any revenue. If you are seriously thinking about selling - get rid of the deadwood and/or write a joint check to the charity and the self storage facility personally for the forgiven rent for the past 6 months or so. You now get a personal deduction on your income taxes for the charitable contributions and those units are now revenue positive. Even if that check is for $1,000 @ an 8% Cap Rate, the facility valuation of those donations equal $12,500. You also might be surprised that those units that you have been using personally for junk, once cleaned out, might get rented before you sell adding to value. Also, most buyers will look back over the past 12 months to determine your real revenue so don't think, just because you have had a recent spike in occupancy, that it will be reflected in the purchase offer that you receive.

    MisterJim444
    Learning Never Ends, But Will Time?

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    • #3
      Re: Tips to Think About if You are Trying to Sell Your Facility

      MisterJim444:

      Thanks so much for the reply and for sharing all that useful information, this is exactly what I want from these threads. All of those are very good tips to consider and things that we obviously would not have thought of without that first-hand experience.

      Hopefully others will at least see what you have written and learn something from that. Again, thanks for the response and good luck if you are trying to sell in the near future (seems like you pretty much got this process down though).
      SpareFoot
      http://marketing.sparefoot.com
      @SpareFoot

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      • #4
        Re: Tips to Think About if You are Trying to Sell Your Facility

        So it be said.......so it be written.
        We work for Mel Holsinger and agree with MisterJim444
        However, we think that MisterJim444 is a pretty sharp cookie too.

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