Friday, May 29, 2020
Self Storage Q6 Cap Rates
Often times when I'm working with investors that are transitioning out of single family or multifamily investments, and then starting to look at storage as an option for either their active or passive income. A common question I get is, you know, "Fernando, what type of cap rates are you seeing out there in the market?" My name's Fernando Angelucci, "The Storage Stud".
Usually what we're seeing is cap rate is a function of not only the quality of the property, but also the location of the property. So let's start on one spectrum and then move all the way down to the other side. So on the premium side of the spectrum, you see properties that are in primary markets. Usually they're downtown. Like downtown Chicago. And these properties are usually class a facilities operated by large reets. Big operators are usually a hundred thousand square feet or more.
These types of properties are usually trading for four and a half to 6% cap rates. Now that's not where we like to play. Now on the opposite side of the spectrum, you have your first generation facilities or your class C grade properties. Usually these are located in tertiary markets or more rural areas. These types of facilities we can usually pick up at a 10% to a 12% cap rate. Pretty easily and pretty consistently. Now where we like to play is kind of in the middle. We like to do the class B, you know, value add facilities, those that are just kind of below where the reets play so that we don't have to worry about them competing with us but still offer a ton of value when it comes to cash flow and cap rates. Typically our properties, we're buying in the eight and a half to 12% cap rate range with the majority of those falling between nine and a half and 10%.
If you'd like to learn more about self storage, feel free to check it out. Shoot me a line at TheStorageStud.com
Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,
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Titan Wealth Group operates nationwide sourcing off market investment properties for Titan Wealth Group’s acquisition as well as servicing a network of thousands of active real estate investors world wide. Prior to founding Titan Wealth Group, Fernando worked for Dow Chemical, a Fortune 50 company, rolling out a flagship product estimated to gross $1B in global revenues.
With an engineering background, Fernando is able to approach real estate investing with a keen analytical mindset that allows Titan Wealth Group to identify opportunities and project accurate pictures of future performance.
Fernando graduated from the University of Illinois at Urbana-Champaign with a B.A. degree in Technical Systems Management.
Titan Wealth Group was founded in 2015 with the vision of gathering individual investors that have the means to invest but lack either the time to find high-yield investment opportunities or the access to these off-market deals. All too often, founders Fernando Angelucci & Steven Wear came across investors who had deployed their capital only to regret the lack of consistency or degree of returns their investments were producing. In response, Titan Wealth Group provides access to highly-vetted real estate secured investments and off-market acquisition opportunities primarily in the Greater Chicago MSA. Today, Titan Wealth Group not only assists individual investors but has grown to support the acquisition goals and capital deployment of investment groups, private equity firms, and real estate investment trusts (REITs).
As a facilitator of wealth growth, Titan Wealth Group believes that success is not limited to the sum of our efforts and is infinite with what can be accomplished through partnership.