245. Self Storage’s “Lost Year” and Why Mom-and-Pops Are Disappearing w/Andrew Freeman and Jon Marshalla

The self storage industry is changing. From the Great Recession through 2021, those who bought self storage facilities saw massive rent growth, impressive appreciation, and, at times, a seemingly endless supply of renters. As the American population began to move after the lockdowns, self storage only became more attractive, and facilities were filling up left and right with occupancy rates and rents exploding. But now, things have changed. Over the past two years, self storage operators have been hit hard. Rent drops, vacancy, and increased competition took away the “passive” income part of self storage investing. Thankfully, those who treated their facilities like businesses survived, while the casual investors either bit the dust or sold to stop the bleeding. Time-tested investors Andrew Freeman and Jon Marshalla from KO Storage were able to roll with the punches and survive a tough self storage market. Today, we’re talking to Andrew and Jon about how they built their portfolio from zero facilities to over two hundred, plus the markets they’re targeting as the “mom-and-pop” investors slowly sell and large operators “consolidate” what’s left of the smaller facilities. Andrew and Jon even share what they’re seeing in 2024 and how they’re pivoting to control the controllable and not only survive but thrive as the storage industry continues to change. What you’ll learn in today’s show: Why Andrew and Jon ditched multifamily real estate to build a massive self storage portfolio The “lost year” in the self storage industry and why so many operators got hit hard in 2022 One CRUCIAL part of your investing strategy that cannot be overlooked The “acquisition runway” causing mom-and-pop ownership to dwindle  Why small markets, not big markets, might be even safer to invest in  Andrew and Jon’s 2024 plan to buy even more as deals become challenging to find  Previous Episodes with Andrew & Jon Episode 105 with Jon and Andrew Episode 142 with Jon and Andrew Where to find more about our guests!  Andrew LinkedIn Jon LinkedIn Enjoy this podcast? Leave us a great review wherever you listen!  Ready to buy storage? Have your deals personally evaluated by AJ and our team!  https://www.selfstorageincome.com/feasibility  Take advantage of today’s market conditions and invest with us:  https://cedar.cc/invest  Make self storage management easier than EVER with our podcast sponsor Tenant Inc. - https://www.tenantinc.com/