Too many real estate investments are designed to produce short-term results which loses special benefits of owning a good asset long-term. Usually structured for quick liquidation, sometimes in as little as five years, the strategy usually emphasizes maximizing sale value. While attractive returns are often achieved there are several significant disadvantages to this approach:
- Good assets are difficult to find.
- The strategy forces the investor to continually seek alternate properties for reinvestment.
- Often area long-term growth trends produce opportunities to enhance the asset and significantly increase returns.
This is particularly true of self storage, an industry with many properties but few have the necessary characteristics to be long-term competitors and the ability to benefit from the increasing value of their location for storage use. With competition for the best properties increasing, we believe there is a better alternative than selling to achieve a short-term gain.
Growing Income Through Long-Term Ownership
Many investors have noted that real estate should have bond-like characteristics but with the advantage of income that can be increased over time rather than terminating upon the bond maturity date. Pension funds and other long-term investors such as wealthy families often keep a substantial portion of their total assets held in income producing real estate for which the objective is to achieve long-term returns. This is our fundamental investment philosophy that guides acquisition, operational and financing decisions.