Franklin Street launches self-storage brokerage

Bruce Goldberg
Published October 25, 2022

Frank DeSalvo, 33, and David Perlleshi, 32, are self-storage investment sales brokers who have worked together for five years.

They recently left Sands Investment Group to join Franklin Street to build a national practice serving self-storage owners and investors.

“Frank and David are leaders and innovators within the self-storage industry who bring an impressive track record of maximizing value for their clients,” said Franklin Street CEO Matthew Harrell in a statement.

Founded in 2006, Tampa, FL-based Franklin Street is a full-service commercial real estate advisory with $7 billion in transaction value.

DeSalvo and Perlleshi are based in Charlotte, NC, but spend half their time on the road in search of new opportunities.

We chatted with the duo about their new assignment and their current view of the market.

With the current economic news suggesting a downturn is ahead, what headwinds do you see emerging for self-storage owners?

Frank DeSalvo

DeSalvo: In more secondary and tertiary markets, I think we could see a decrease in occupancy as consumers start to re-evaluate where money is going. In those markets, we also will see lowered year-over-year rental increases, which ultimately contribute to lower valuations on their facilities.

Perlleshi: There’s been a lot of new development happening with bigger players in the space. [Development in] smaller and tertiary markets will force some of these owners to become more creative in managing their properties. You may see a lot of mom-and-pop-run facilities in secondary and tertiary markets adopt marketing software to compete with the larger players.

How would that impact the buyer pool for self-storage properties?

DeSalvo: It’s going to somewhat diminish as we face less liquidity in the market and a higher cost of capital. Having said that, I think that self-storage is well-positioned to combat both an economic downturn as well as rising interest rates given the quick nature of the way that value-add can be taken advantage of inside the asset class.

What is the opportunity that exists for your firm right now?

DeSalvo: I think that self-storage as an asset class is still fairly under-explored and under-saturated. I think there’s still a lot of runway there for a deal to happen in that space, especially small mom-and-pop facilities that haven’t traded to a significant degree pre-COVID-19.

David Perlleshi

Perlleshi: I would say a lot of our competitors in this space are fractured in terms of the national footprint of where the home base is and where they office out of. With our national expansion plans, we plan to have teams based in the top MSAs throughout the country. We think that will give us a competitive advantage over the rest of the brokers in this space.

DeSalvo: One of the biggest reasons for starting in Franklin Street is being able to offer our self-storage clients, whether on the buy side or the sell side, a one-stop shop for all of their self-storage needs.

What is your view of remotely operated facilities?

DeSalvo: I think remote management is definitely the wave of the future, and where it may not work for every owner-operator, as the market tightens valuations and deals become harder to pencil, we see a lot of buyers become more comfortable with remote management. We’ve seen it very successful in markets that are a lot more tech-savvy. It’s a bit more of a battle in secondary markets. I think 10 years from now, we’re going to see a much larger portion of the industry adopt this business model. COVID has forced a lot of owners’ hands on this issue.

What were your top accomplishments at Sands Investment Group and Houston Street Capital?

Perlleshi: For Sands, our biggest accomplishment was partnering up with each other towards establishing a sales platform and see how quickly we could build our reputation. We’ve had a ton of sales and that were great deals.

At Houston, we acquired 13 self-storage properties in the Carolinas through the years, which gave Frank and I a lot of experience in the ownership and operations side of the business.

Bruce Goldberg

Bruce Goldberg is a freelance writer and editor based in Denver. He worked in newspapers and magazines as both a business writer/editor and sportswriter/editor for 35 years.

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