When it’s time to sell your self-storage business, it can be tempting to start making phone calls to individuals you know would be interested or to quietly announce that you are looking for people to “make me an offer.”
Selling a self-storage business requires a bit more consideration than that. That’s why it is often best to seek the help of a self-storage broker. A self-storage broker will walk owners through the steps necessary to ensure that the best deal is made for the seller. In many cases, the result is a 6-figure increase in what would have been the sale price.
What steps are necessary to prepare to sell a self-storage business?
Planning
Prepping a self-storage business for sale involves planning. The exit strategy plan includes a timeline, necessary repairs, gathering of financial information, a market valuation, and a consultation with a legal advisor.
Much like selling a home to a new family, it’s time to clean things up and make it shine. Curb appeal either attracts the right buyers or a lack thereof may attract the wrong ones. Assess what needs to be cleaned, painted, or repaired to make the business stand out to buyers.
Working with an accountant to gather the necessary financial information enables a broker to work efficiently on a property valuation that highlights the business’s success. Business owners often overvalue or undervalue their businesses, so using a broker with expert knowledge is necessary to secure the best offer for your business.
A trusted legal expert will protect both the owner and the business throughout the transaction.
Marketing
The net operating income (NOI) of your facility is a determining factor in the sale price. The occupancy rate at the time of sale should be between 75 and 95%, so part of the timeline of the sale is making sure that occupancy remains in this range.
This may be the time to increase rent to raise the NOI, but it also may not be the best time to do it. A broker will consider several factors before recommending a rental increase. Business owners should frequently complete a comparison with local businesses for competitive pricing.
This may be the time to take action on delinquent tenants. If they are unable to catch up quickly, it’s time to evict them. Potential buyers assume that they will have to remove such tenants, which will reduce occupancy. It’s better for you to get rid of delinquent tenants and boost occupancy with new renters.
Brokers will create the listing focusing on the features of the business that showcase the best details of the property and the existing NOI. Brokers will also determine if it makes sense to increase the NOI by adding features that may attract the best buyers. Some examples include box truck rentals, boxes and other packing materials, and boat or RV storage if space is available.
Negotiating
Brokers are essential to a successful negotiation process. Our team of experts will handle the fine details of this process and provide a smooth and stress-free experience for clients so that they receive the best available offers for the business they have built. Brokers also work within the designated timeline to ensure that the transaction is complete in a timely manner.
Hire Coastal Storage
Consult with an expert self-storage broker like Coastal Storage. Our team of experts has decades of experience and is laser-focused on self-storage. As the Argus Self-Storage Network Affiliate for Georgia and Florida, we have access to a wide network of buyers ready for their next investment. For all of the benefits of a self-storage broker call Coastal Storage today at 904-591-0140.