Self-storage offering memorandum template

Why a self-storage OM is different

Most commercial OMs are built around leases. A storage facility has no long leases to abstract: customers rent month to month, rates are changed frequently, and the facility’s income depends on how well it is managed and marketed. The OM therefore leads with the unit mix and the operating history rather than a rent roll, and it has to explain how the rates and occupancy came about.

That also means a buyer will rebuild the income from the bottom up. Present every figure with its period and basis, keep management fees and on-site payroll in the expenses even if the seller runs the facility personally, and say which income lines are rent and which are fees or retail sales.

Presenting the unit mix and rates

• Group units by size and type, such as 5×5, 5×10, 10×10 and 10×20, and keep climate-controlled, interior, drive-up and vehicle parking as separate rows.
• Give the count and the average size of each row so buyers can check the net rentable area against the building plans.
• Show the average in-place rent per month next to the current street rate, the rate quoted to a new customer today, and date both.
• Note any discounts or promotions in use, such as a first month at a reduced rate, so the street rate is not overstated.
• If a large share of units are leased to a few business customers, say so; that concentration matters to buyers.

The difference between in-place and street rates is often part of the investment case, in either direction. Explain it rather than leaving buyers to guess, and avoid presenting a projected rate increase as achieved income.

Occupancy, income and expenses

Physical occupancy, the share of units or area rented, is easy to measure but can flatter a facility that fills its units with heavy discounts. Many buyers also look at economic occupancy, the rent actually collected as a share of the rent the facility would earn at full occupancy and street rates. State which measure you show, whether it is by units or by area, and its date.

Typical operating expenses include realty taxes, insurance, payroll or management, utilities, repairs and maintenance, marketing, software and credit card fees. Show the trailing twelve months by month if you have it, because storage income is seasonal in many markets and buyers want to see the pattern, not only the annual total.

Competition and the trade area

Storage customers rarely drive far, so the competition is local. Identify the facilities within a short drive that a customer would compare, with their approximate size and type where you know it, and mention any planned or approved facilities you are aware of, citing the source. Pair this with the population and households around the site from Statistics Canada for Canadian properties or the US Census Bureau American Community Survey for US properties, with the table and year. Avoid quoting supply-per-capita benchmarks unless you can cite where they come from.

Canada and the United States

The product is similar on both sides of the border, but the paperwork differs. In Canada, storage rentals are generally subject to GST or HST, and provincial laws set the rules for dealing with the goods of customers who stop paying; in the United States, state self-service storage lien laws play that role. Zoning for storage varies by municipality, and some cities restrict new facilities or require them in particular zones, which can make an existing facility harder to replicate. State the zoning and the source, and leave interpretation to the buyer’s advisers.

Building it in OfferingStack

Enter the unit mix rows, occupancy, income and expenses, or upload a fact sheet and accept the extracted figures. OfferingStack builds a Unit Mix page with the count, average size and rents for each unit type; for a storage listing the rent columns are labelled per month. The OM adds a Financial Overview, Pricing & Valuation with a cap-rate sensitivity table when NOI is entered and, for a for-sale listing with price and income, an Investment Summary, with calculated values labelled.

From the address it adds drive times and demographics with their sources. Competing facilities are not looked up automatically: add the ones you consider relevant, with their locations, and they are drawn on a located map whose title you choose. Pages without data are left out, and you approve every page before it goes to buyers.