Parkland Self-Storage
Over the last 5 years, self-storage has become an amazing investment opportunity in Washington State. The region is booming and wealth is pouring in, thanks in part to tech giants such as Google and Amazon. This has driven up storage value so quickly that well-managed self storage can now achieve the same rent as Class B office space. – Mike Azose
Parkland Self-Storage Purchase and Rehab
Parkland was a 565 unit, 65,000sq ft. self-storage complex built in 2000. Right from the start, we knew it had potential — but it was going to be a challenge to turn it around.
Since it was built, it was never able to achieve anything higher than a 50% occupancy rate. We got wind of the impending sale in 2015 and decided to perform our due diligence.
We looked at the property, market, demographics, and pricing. Based upon our decades of experience, we felt that the low occupancy rate was due to mis-management rather than a bad market or poor design.
Our offer to purchase was accepted and we set out to implement our proven self-storage rehabilitation plan.
Executive Summary
- We purchased low-performing Parkland Self-Storage as part of an investment deal.
- We encountered many challenges along the way - which required creative solutions.
- It suffered from a low occupancy rate, poor management, and no marketing.
- Our due diligence indicated that it had extreme potential to be turned around.
- Our goal was 85% occupancy within 3 years.
Challenges
Right from the get-go, we knew that Parkland was going to be a challenge.
Occupancy rates were hovering around 50%, the building had deferred maintenance issues, as well as lack of security. The management that came with the building were poorly trained.
Based on our analysis, we quickly realized that if we applied our proprietary processes, we could turn the building around and increase the occupancy rate (and value of the property) within 3 years.
The Solutions
After escrow closed, we immediately began addressing the deferred maintenance issues and added security cameras and guards.
We then reconfigured several units for a more diverse mix which better reflected the needs of the market.
We first tried to work with existing management, but ultimately decided to hire and train an all-new management team.
Parkland self-storage had zero marketing since its inception, so we immediately implemented our proven marketing system that included a website, social media, and inclusion on various review sites.
The Results
Parkland Self-Storage was a diamond in the rough. It had good bones, was in a great location, and just needed an experienced firm like Azose to come in and turn it around.
Our initial goal was to have an 85% occupancy rate within 3 years, but we hit that target in just 6.5 months. The 85% occupancy rate continues to this day.
We were also able to increase the rent from .88/sq. ft per month to $1.28/sq. ft. per month.
The dramatic turn-around was accomplished because of our years of experience and proprietary processes that enabled us to bring Parkland Self-Storage in line with the rest of the market.
Our initial investment of 3.5 million dollars was tripled. Parkland Self-Storage is now on the market for 10.5 million dollars.
About Azose Property Management:
Since 1976, Azose Property Management has been involved in the buying, selling, and management of self-storage units. Over the decades we’ve put together many investment groups which have provided our investors excellent returns in a short period of time. Contact us today to learn more about potential investment opportunities.
