Atlas Storage Deals – Update 3

The last 90 days have been fun.

 👋 Welcome back to Atlas Self Storage's Quarterly newsletter.

Quick Intro If You're New Here:

Who are we:

Atlas Self Storage is a real estate investment firm started by Connor & Giovanni.

Our goal is simple.

Buy ~$5-10M of value-add self storage facilities every year. Mainly in Texas.

Current Portfolio:

• 3 properties (sold 1 last week) valued around $2.8M

• 228 units & 44,240 rentable SF

Why are we writing this?

Our goal is to build a $100M portfolio over the next 5-10 years.

I want to document that process.

Along with teaching people just getting started how we're thinking about buying these deals. And maybe even attract some investors to partner with us along the way.

New Here? You can find our last email here.

Team

Last update we introduced Ecko & Elliot who have been crushing operations & leading up our acquisitions department.

Since then we brought on two more 1099 contractors to make 300 calls/week to TX owners & operators.

We ultimately let one go. Now have Ian helping us scale up our outbound full time, helping us make offers on a more consistent basis to off-market sellers.

Portfolio Update

^{Since our last update on March 10th:}

• We sold our Midland property (more on that later)

• Excluding Midland, February 2023 rental revenue was $22,400. May numbers we were at 23,700. Up 5.8%

• Physical Occupancy across the 3 remaining facilities is up from 82.8% to 88.5% (202 units)

Deals:

It's been 9 months since we've bought our last facility.

Not for a lack of trying, we’re making 3-4 offers on a weekly basis and following up with sellers every day.

That said, we have a new deal under contract in Rockport, TX.

It’s a 17,300 SF facility with 237 units. We plan to close on it in the next 60 days.

Like every property we’ve bought to date… it’s not that pretty:

And we’ve got our work cut out for us on junk removal alone

So we’ve set aside hundreds of thousands of dollars to replace nearly everything from the paint, doors, gate, landscaping, lights, etc.

And this will be our first big 1031 project, taking the proceeds from the Midland, TX sale and moving them into the new Rockport property.

Between purchase price and repairs, we are projecting to be all in on the property at just around $1M.

We believe we can lease it up and have the property valued ~ $1.6M and generating ~ $16,000/month when it’s all said and done.

Midland Deal:

Last April we closed on a property at 200Norman in Midland TX for $590,000

After leasing it up to 95%, repairing the gate, lights & paint, and stabilizing existing tenants at market rates, we just closed on the sale last week.

We saw a 3.85x equity multiple in 14 months.

While I don’t think this will be standard across all of our properties, but we are thrilled to realize our first gain, and 1031 the cash into our next deal.

It also gave us a healthy idea of where the market is at today on the buy side.

Overall, a big win for us and our plan is to continue buying heavy value add facilities that we can find similar success with.

Focus for the next 90 days:

• Deals. Find them, make great offers, and get them under contract. This is currently the entire companies #1 focus and priority. The activities to get there mean:

  • Cold calling daily

  • Sending more post cards

  • Building out a stronger and more consistent pipeline of sellers

• Stabilizing Larger Units. We've leased up a lot of our facilities but between the 3, each have 1,000+ SF of warehouses or offices that need leasing help. We’ll be getting those ready to lease this summer and focusing on getting them rented out ASAP.

Closing Thoughts

We have the systems in place to manage a storage facility exceptionally well.

Our biggest bottleneck today is deals.

Finding more deals to buy at the return profile we are looking for has been difficult, but I believe our offers & sellers expectations will become more aligned over the next 12 months.

If you have any questions or want to get involved, please respond to this email! We'd love to chat.

-Connor & Giovanni