Smaller operators are less willing to sell their facilities than they were two to three years ago, the CEO of publicly traded REIT Sovran Self Storage says.
“They are seeing better terms for refinancing, and the improving economy has them seeing better opportunities ahead,” CEO David Rogers told REIT.com. “A lot of them are pretty happy sitting where they are, and it’s tough to encourage them to sell.”
In the past three years, Sovran has purchased about 140 facilities and sold about 30 non-core facilities, REIT.com reported.
According to Rogers, one avenue Sovran has used to overcome intense competition on the acquisition front is its third-party management program, paving the way for the REIT to run and then buy facilities.
Another acquisition strategy Sovran has embraced is targeting one- or two-facility deals rather than portfolio deals.
“It’s as much work as buying a far larger asset, but we’re willing to do that, especially if they are quality products in markets where we already have a presence,” Rogers told REIT.com.
Generally, “times are pretty good” for the self-storage industry, he said.
“We’ve hit a real sweet spot in the cycle in terms of a lack of new supply during the last five years and an uptick in demand,” Rogers said.
Sovran operates 506 self-storage facilities in 25 states under the Uncle Bob’s Self Storage brand.