Self-Storage Fund, Two and a Half Years In

Most sponsors talk about their track record in decades. AAA Storage has 33 years of it. But on the latest episode of The AAA Storage Podcast, Paul Bennett made the case that the decades matter less than the last two years.

This article is for growth-minded investors weighing a self-storage investment fund and wondering what one looks like in mid-life — not at the pitch or the exit, but in the middle where the work happens. Below is Growth Fund 1 project by project: real occupancy, the path to a first exit, and where the numbers sit against projection.

"When you're evaluating a sponsor, the whole track record matters, but the most recent track record matters the most," Bennett said. "It's the best reflection of that sponsor's performance in the current market conditions."

So he opened the books. Growth Fund 1 broke escrow in November 2023 and began investing that December, putting it at the two-and-a-half-year mark — the point in ground-up development in self-storage and small-bay industrial where construction is behind you and lease-up is the whole game. All figures are as of June 30, 2026, and occupancy is measured on a square-footage basis, not a unit basis.

His one-line summary: "Growth Fund 1 is outperforming the market."

How a self-storage investment fund reaches its first exit

About four years, and the arithmetic isn't mysterious. Bennett laid out the timeline AAA Storage underwrites to:

Six to eight months to build phase one
Twelve to eighteen months to lease phase one to 70%
Four to six months to build phase two, faster because the site work is done
Another twelve to eighteen months to reach 85%, the point a facility is ready to sell

That's why AAA Storage projects a first exit at year four, and why the middle of a fund's life looks quiet from outside. One wrinkle: the early months are slow by design. "It takes four to six months to get indexed on Google so that you start appearing on a regular basis in searches," Bennett said. Lease-up doesn't run flat — it compounds. For how that risk profile compares across property types, see our breakdown of the four layers of risk in a real estate fund.

Cibolo, Texas: why occupancy dropped on purpose

Because the building more than doubled in size. Phase one leased to 70%, triggering phase two; when that CO'd in February, occupancy mathematically dropped to about 28%. The facility — outside San Antonio on the I-35 corridor, now fully built at 67,000 square feet and 481 units — has since recovered roughly 14 points to 40.5% on June 30, with seven new leases in June and thirteen July reservations booked. Institutional buyers have inquired, but Bennett won't rush: "we're not gonna sell that facility at a discount just because we sell a little too early."

Next door, the Green Valley Business Park signed two leases before phase one was finished, putting it into revenue less than eight months from groundbreaking. The tenants: a church and a basketball training facility, with a medical distributor circling. "It's the beauty of small-bay," Bennett said. "The tenant base is so diverse." His counterexample: "The worst piece of real estate in the world to own is a building shaped like a cowboy hat." Our deep dive on small-bay industrial and self-storage unpacks why that flexibility drives lease-up.

Georgetown, Texas: the best story in Fund I

It's the FM 3405 Business Park, which hit 72% occupancy in eight months. Its 104,000 square feet leased so fast that AAA Storage built phase two immediately after phase one, and most of the remaining vacancy sits in a single building just completed.

"At 72% in eight months, that's insane," Bennett said.

If leasing holds, he expects it fully leased by Q4 2026 and sold in Q1 2027 — a first exit and first return of capital at roughly the three-year mark, a year ahead of projection. He caveated it directly: "I can't guarantee that. I can't promise that. But it's what I see happening right now."

The storage facility on the same road is the quieter half: Georgetown has ranked among the five fastest-growing U.S. metros for ten straight years, and that building, CO'd in November 2025, sits at 32% occupancy eight months in — "about in line with our average expectation."

Lago Vista: a 33-year record

The Lago Vista facility CO'd phase one in December 2025 and hit 41% occupancy in seven months. "It is truly at this point leasing up at a faster pace than any facility we've built in 33 years," Bennett said.

The reasons are specific rather than lucky. Lago Vista is a Lake Travis community with a heavy second-home base and strong seasonality — a demographic that profiles as high-use for storage. There are no REIT competitors, and the existing facilities are old: gravel lots, chain link fences, terrain Bennett wouldn't drive a U-Haul up. The new building sits across from the high school. Even the local marketing works: 500 flyers at a summer festival produced five tenants in a week.

Florida, and one project deliberately on hold

The Highway 41 project ran late for good reasons: AAA Storage redesigned the site to avoid $800,000 of imported fill, and got FEMA to redraw a floodplain map, permanently lowering insurance cost. It's now about 80% complete with an August CO, on a road carrying 40,000 cars a day. "You can't create demand for storage. You simply need to be top of mind when somebody needs storage."

The small business park beside Lago Vista storage is the one asset intentionally in limbo while AAA Storage weighs building more self-storage there instead. "Sometimes when you make decisions in stages, you make better decisions," Bennett said.

Lock In: ancillary revenue, packaged

Lock In is a tiered membership bundling what most operators sell à la carte — tenant protection insurance, smart locks, 24-hour access, dumpster use, and rate lock periods — for $18 to $34 a month. AAA Storage's property management group, led by VP David Luce, launched it in May.

Offered to new tenants only, it hit a 60% acceptance rate in month one. On a 10x10 unit renting around $110, that's a 15% to 30% revenue increase — high-margin income that flows straight into asset value at exit.

Bennett thinks the rate lock is doing the work. "Six months after you rented the unit, you'll be at three times what you originally paid," he said of REIT pricing. "I think people are getting tired of that."

Key Terms

Certificate of occupancy (CO): The municipal approval confirming a building is complete and legally habitable. In development, the CO date marks the start of lease-up and is the clock most performance figures are measured against.

Square-footage occupancy: Occupancy measured as leased square feet divided by total rentable square feet, rather than as a count of occupied units. Because unit sizes vary widely in self-storage, square-footage occupancy gives a truer picture of revenue potential than unit occupancy.

Phased development: Building a project in stages, with each phase triggered by a leasing milestone in the prior phase. It avoids paying interest carry on empty space and is the reason a facility's headline occupancy can drop sharply the moment phase two comes online.

Value engineering: Redesigning a site or building to reduce cost without reducing function — for example, reworking grading to cut the volume of imported fill required.

Ancillary revenue: Income a storage facility earns beyond base rent, such as tenant protection insurance, smart locks, and premium access. Because it carries high margin, it lifts net operating income and therefore asset value disproportionately.

Frequently Asked Questions

How long does it take to lease up a self-storage facility?

AAA Storage underwrites twelve to eighteen months to bring a phase-one facility to 70% occupancy, then another twelve to eighteen months to reach the 85% level where the asset is ready to sell. Lease-up is not linear: the first four to six months are slow partly because it takes that long for a new facility to be reliably indexed by Google, after which leasing tends to compound.

Why did one facility's occupancy drop from 70% to 28%?

That's phased development working as designed. AAA Storage's Cibolo facility leased phase one to 70%, which triggered construction of phase two. When phase two received its CO in February 2026, it more than doubled the rentable square footage, so the same leased space represented a much smaller share of a bigger building. The facility has since recovered about 14 points, reaching 40.5% as of June 30.

When will Growth Fund 1 investors see their first return of capital?

AAA Storage projects a first exit at roughly the four-year mark as standard. Based on current performance at the FM 3405 Business Park in Georgetown — 72% leased in eight months — Paul Bennett expects that project could be fully leased by Q4 2026 and sold in Q1 2027, producing a first exit around the three-year mark. He was explicit that this is an expectation, not a promise: "I can't guarantee that. I can't promise that."

What makes a self-storage market attractive?

Bennett's screen combines demographics, competition, and visibility. Lago Vista worked because it's a second-home, seasonal Lake Travis market with a high-use storage demographic, no REIT competitors, aging local facilities, and a site directly across from the local high school. The Highway 41 project in Florida leans on a 40,000-car-per-day traffic count, on the logic that you can't create storage demand — you can only be top of mind when it appears.

What is Lock In, and why does it matter to investors?

Lock In is AAA Storage's tiered membership program, launched in May 2026, that bundles tenant protection insurance, smart locks, 24-hour access, dumpster use, and rate lock guarantees into silver, gold, and platinum tiers priced at $18 to $34 per month. It reached a 60% acceptance rate among new tenants in its first month. On a unit renting around $110, that represents a 15% to 30% revenue increase — high-margin income that raises net operating income and, with it, the value of the facility at sale.

See This Strategy in Action

Growth Fund 1 runs on the same model AAA Storage applies across its funds: ground-up development in self-storage and small-bay industrial, hyper-local market selection, and phased construction.

Self-Storage Fund, Two and a Half Years In | AAA Storage