Joe Downs explains how to address the lender objection that kills most self-storage deals: seasonality. He shows how to prove NOI using market data, supply gaps, HOA density, and comps from adjacent markets when direct comparables don't exist.
Chapters
Seasonality is the single biggest lender objection and the one you have to be most prepared for. So you need to address the following: the summer dip, which we covered a second ago. You want to remember, annotate that. So vehicles are in active recreational use in the summer, which demonstrates engaged tenants doing exactly what they paid to store their vehicle there for. Revenue swings. A consistent repeating 2-year cycle is more predictable than a retail tenant whose sales depend on foot traffic. False spike. It's structural. Demonstrate it. HOA-prohibited home storage is an annual regulatory reality. These tenants move in because they have no other option. Lenders who see a prepared downside case trust the upside case more. All right. So 5 elements that together replace a missing transaction comp. All right. So we're going to give a market overview, supply gap data, HOA density, registration to spaces ratio, competing inventory. This establishes why the NOI is real and sustainable. Show whatever comparable transactions you can, though. So imperfect comps still help. 3 partial comps in adjacent markets or similar markets are better than an empty section. Uh, comparable, comparable asset class, uh, self-storage in the same market as, as a Frame.
