How AAA Storage Underwrites Self Storage Investments

Market Definition as a Critical Step

Every self storage opportunity at AAA Storage is first viewed through the lens of precise market definition. The designated trade area is usually three to five miles, but this range flexes according to population density, urban context, natural barriers, drive-time segments, and local movement patterns. Analysts do not simply draw circles on a map; they analyze where actual demand and competitive influence begin and end. Two core factors drive the market boundary: population density and competitor count. High growth rates in a small population area may appear attractive, but analysts identify whether the base population can meaningfully support a new project. For example, five percent annual growth means less in a market with just 10,000 residents, versus one with 50,000. Natural barriers, retail corridors, and major highways are always considered to avoid overgeneralization, ensuring the project fits local realities.

Quantifying Demand and Verifying Future Supply

Demand analysis anchors on three primary data points: actual occupancy at existing facilities, current market rental rates, and the percentage of households utilizing storage. Industry heuristics—such as the benchmark of 10 square feet per capita—are not used in isolation. Every market is different, with military cities often supporting 15-18 square feet per capita and some regions sustaining much less. Usage rates are measured and contextualized instead of assumed. Threat of oversupply is directly researched using specialized self storage data platforms, but AAA Storage always validates this information directly with city planning offices and local permitting authorities. Confirming new facilities in the pipeline is decisive—a sudden 20% or more increase in total supply may impact lease-up timing and rent projections. Analysts identify not just how much space will be added but when it opens, what neighborhoods are affected, and whether the location serves the primary target market. The result is an accurate, site-specific view of both present and future competition.

Weighted Risk Assessment and Cross-Departmental Collaboration

Risk and reward are balanced through a weighted multi-factor framework. Each site is measured on roughly 10-12 key criteria: population and growth, occupancy and rental rates, land cost, proximity to established competitors, national REIT and local operator mix, new supply as a percent of current inventory, site access, and distinctive market features. Factors with the greatest strategic impact—such as sustained low population or major supply expansions—carry heavier weight in scoring. Underwriting happens in two stages: initial land banking, focused on market suitability, and a second stage once construction drawings, costs, and financial details are confirmed. Departmental collaboration is central—construction teams price and schedule the project, financial analysts build pro formas and stress-test models, and our VP of property management, David Lutz, supplies expense and revenue projections as well as occupancy ramp assumptions. Each leader’s perspective is directly included in a comprehensive review.

Integrated Committee Review and a Track Record of Results

When all data is assembled, the investment committee—John Muhich, Paul Bennett, and Andy Muhich—leads the formal assessment, supported by input from heads of construction, finance, and property management. This multi-stage system ensures red flags are surfaced and discussed, underlying projections are challenged, and no detail is left unchecked. Over the last 12 to 18 months, the process has become even more robust, tightening diligence and improving risk scoring. AAA Storage’s approach—grounded in data, cross-team expertise, and true local analysis—remains the engine behind its 30-year record of delivering results and protecting investor capital.