Inside Our Investment Committee | The AAA Storage Podcast #49

Every site that ends up in one of our funds has survived a long list of reasons to say no. On this episode, three members of our team join me to explain how our investment committee makes those calls: Logan Broyles, who leads our market analysis; Shawn Beichler, who runs development and construction; and David Lutz, who leads our self-storage property management.

From Raw Land to a Fund Investment

The process starts with raw land. Logan screens for size, then maps the trade area and studies population, income, growth, competition, and the pipeline of new supply. Shawn checks what could stop us from building on time and on budget: road widening, sewer, water, fire protection, and permitting timelines. David asks whether the rooftops are there, and will be there, to lease the facility up. If a site clears those tests, we put it under contract, spend 45 to 90 days on due diligence, including geotechnical and environmental reports, and decide whether to buy the land with our own capital.

Two Years Is a Long Time in Development

Between buying the land and funding the project, there are usually 18 months to two years of design and permitting. Construction, lease-up, and a second phase follow. From land purchase to a stabilized facility can take about six years, and a lot can change.

Competitors open nearby. A housing development that was supposed to drive demand gets delayed. A new building code calls for sprinklers. The DOT redesigns the road and changes our access. So at the final vote, we test everything again, and Logan talks directly with the local planning office to confirm what new supply is really coming.

Demand Has the Final Say

For David, the deciding number is square feet of storage per capita. A strong market might be three to five. At nine or ten, he can't create the demand to fill a store. That's why we once killed a deal on land we already owned, and why we turned a planned storage and small-bay project in Hutto, Texas, into an all small-bay industrial park.

Rules still have exceptions. Our Cibolo, Texas, store was built on a road with a traffic count of zero, next to a large housing development that was only 10% complete at the time.

Key Takeaways

• Each project faces at least three investment committee reviews before it reaches a fund.

• Site size, trade area, and new supply decide whether a site is worth pursuing.

• Utilities, fire protection, road requirements, and permitting can kill a site before design begins.

• Markets can change in two years, so the final vote tests everything again.

• Square feet per capita tells us whether there is demand to capture.

For a deeper look, read Self-Storage Site Selection: What Kills a Deal Before It Reaches Our Fund.

Ready to talk about your investment strategy? Reach out at https://www.aaastorageinvestments.com/contact

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