Selecting a great market is key to driving investment returns. It is very hard to turn around an asset if it is in a market with unfavorable demographics and low rents. On the other hand - buying a great or good asset in high rent, strong demand markets makes the operational lift smoother and generates a higher return in the long run.
What does Patriot look for when selecting potential markets to buy or develop self-storage facilities?
Population
- Minimum of 10,000 people within a 1-mile radius.
- 30,000 within a 3-mile radius.
- 50,000 within a 5-mile radius.
- Growing population, annual growth of 0.5% to 1.0% +
High Traffic Areas
- Locations along major interstates have proven valuable.
- Facilities near major retailers, such as Walmart.
- High visibility and traffic counts drive significant ROI.
Economy
- Stability and Growth: A thriving economy with localized jobs.
- Household Earnings: Minimum household income of $55,000, ideally $70,000+.
- Real Estate Value: Average house values should exceed the national average, ideally over $300,000.
Competition
- Limited Competition: Target markets should have less than 8 square feet of storage per capita, with an ideal figure being below 6 square feet per capita.
- A constrained supply of new developments/ No new development initiatives.
- Entry Barriers: Challenging environments for acquiring land or obtaining development permits.
Patriot Holdings Acquisition Criteria
Rental rates and the ability for our operations team to drive revenue also plays a critical role in selecting target markets and properties. We look for markets with exceptional rents ($12 to $15+ annually) and pinpoint underperforming assets in these markets. For our full criteria, see here: www.patriotholdings.com/acquisition-criteria.
Over the years, our reputation has cemented us as the buyer of choice among sellers in our target regions. This hasn't been an overnight achievement. It results from building and nurturing relationships with sellers over several years, ensuring a foundation of trust.
Next Steps: Interested To Learn More or Invest In Commercial Real Estate?
If you would like to learn more about our Open Funds or invest in Commercial Real Estate please contact our investor relations team by completing the New Investor Form here (it will take less than 2 mins).
