The CEO of Brooks Brothers – the renowned American clothier that has been a mainstay of men’s fashion for over a century – once said “we’re not good because we’re old, we’re old because we’re good”. That’s an interesting take on the relation between age and success. What’s the meaning of this quote and how does it relate to self-storage investing?
Stick with the basics
Brooks Brothers has always been focused on one simple product: business attire. And since people have to earn a living and want to look good to be successful there is never a shortage of demand for things to wear to work. One reason that Brooks Brothers has lasted so long is that it has never attempted to venture into hip clothing for young people or camping equipment. The same can be said for self-storage investing. You need to focus on the tradition single-story, back up your car, roll up the metal door, self-storage classic. Not the high-rise, climate controlled stuff that nobody really wants and you only build to try to make sense of higher urban property costs. With the new trend in storage investing focused on the suburbs and exurbs (and away from urban metros) this puts you back in alignment with the traditional model that made self-storage popular in the first place.
Stay away from bad deals
There is an old saying that “discretion is the better part of valor” which basically translates to the simple fact that sometimes not doing a deal is better than doing it. Brooks Brothers has lasted for a century because they have not done a lot of speculative acquisitions. A good storage deal is one in which you have carefully evaluated the best case, worst case and realistic case, and are adamant that the property will do well and you can cover the worst scenario. Too many self-storage owners have violated this premise in recent years and the result has been billions of marginal new capacity built and a huge amount of exposure in markets that are now in declining population. When you see a multi-story facility in a big city with a bunch of marketing signage that says “first two months free” then you know that’s probably a deal that the current owner wishes they had avoided getting involved in.
Experience matters – seek out those individuals for advice
Brooks Brothers knows business attire better than anybody. They have even written books about it. Every President has worn their clothes. Abraham Lincoln was wearing Brooks Brother at the Ford Theater. Reagan was wearing Brooks Brothers when the Berlin Wall came down. And that well-earned experience in a single focus is invaluable. For self-storage investing, the same can be said. You need to seek our the advice of those who have lengthy, successful knowledge of the industry and the current trends. That can come from other owners, industry associations, reading books – any source that has a credible track record. If somebody tells you how to invest in storage, but lack a track record of success or a depth of knowledge, the listening to them will get you in more trouble than it will help you.
Brooks Brothers is a legend in business wear and you can be a legend in self-storage if you follow their example and focus on learning the correct way to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around an operate self-storage facilities. Learning the correct way to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around an operate self-storage facilities.