Broker Secrets In A Changing Self-Storage Market

Is this the moment to get bold with your next self storage move, or the moment to back away?

Scott Meyers sits down with broker and former principal investor David Perlleshi of Franklin Street to unpack why today’s selective market may actually be the best buying climate since the mid two thousands. 

David traces his path from acquiring and expanding mom and pop facilities in the Carolinas to brokering nearly two hundred properties nationwide, giving him a rare view from both the ownership and sales sides. 

He explains how values have reset to twenty sixteen through twenty eighteen levels, why true motivation now separates real sellers from market testers, and how smart buyers should think in price per foot rather than fixating on yesterday’s cap rates. 

Along the way he shares what makes a great buyer in the eyes of a broker, the biggest mistake sellers make when they decide to list, and why self storage is not a set it and forget it asset but a real operations business that rewards speed, preparation, and collaboration.

WHAT TO LISTEN FOR

:50 How did David go from principal investor to national self storage broker?
5:09 What is really happening with pricing, values, and supply in self storage today?
7:56 How can you tell if a seller is truly motivated to meet the market?
11:27 Why are buyers and lenders chasing stabilized deals and avoiding stalled lease up projects?
18:22 What separates a merely good buyer from a great buyer in the eyes of brokers?

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Chapters

• 0:50 How did David go from principal investor to national self storage broker?
• 5:09 What is really happening with pricing, values, and supply in self storage today?
• 7:56 How can you tell if a seller is truly motivated to meet the market?
• 11:27 Why are buyers and lenders chasing stabilized deals and avoiding stalled lease up projects?
• 18:22 What separates a merely good buyer from a great buyer in the eyes of brokers?

Transcript

Announcer (00:03):
 This is the Self Storage Podcast with the original self storage expert, Scott Meyers.

Scott Meyers (00:12):
 Hello everyone, and welcome back to the Self Storage Podcast. I am your host, Scott Meyers, and we have a very special guest today. It is David Perlleshi from Franklin Street.

David, welcome back.

Thank you for having me.

Well, so good that we could spend more time together here, especially after the last mastermind and the conversation that came after your presentation, which continued on for the next couple of days. I am just grateful that we can now have a conversation with the wider audience here at Storage Nation.

So for the listeners here who are not in our mastermind, if you could give them your background, how did you end up specifically specializing in self storage?

David Perlleshi (00:50):
 Yeah, great question, and Scott, thanks for having me. This is a wonderful opportunity and we really appreciate it.

Scott Meyers (00:56):
 Of course.

David Perlleshi (00:58):
 So the way that we got involved, or the way I got involved in the storage industry, was from the principal side. We entered the business by acquiring self storage properties in the Carolinas. That was back in 2016.

We were a small private equity group, really a family office based out of New York City, and we were identifying opportunities in the Carolinas. We identified about thirteen properties over the course of my four years there. Every property had mom and pop ownership, owner operators at each facility, and there was an expansion component and a heavy value add component in every single deal.

Essentially our business plan was buying direct from sellers and sourcing those opportunities. From there, upon acquisition, we would acquire the facility, install institutional management on those deals, and then capitalize on the expansion opportunity at those properties.

David Perlleshi (02:05):
 So often we were buying single story facilities, and we were building single story or multi story climate controlled buildings at those properties. We would get them to institutional size, and the existing size on them was twenty or thirty thousand square feet. Often we were getting to sixty, seventy, eighty thousand net rentable.

As far as the existing structure and the property that was there, we would beautify the asset by enhancing the asphalt, signage, fencing, and painting the exteriors, and enhancing the security and lighting. We did everything needed to get it to institutional quality.

So our business plan was identifying mom and pop opportunities throughout the Carolinas. There were about thirteen deals that we did, and we would also get them to institutional size and institutional quality. That is how we got involved in the business early on in the self storage space.

In 2020 we had completed those thirteen projects, and at that point the ownership group and the equity group said, “Hey, we need to show proof of concept here and lease up all this inventory that we brought to market.”

David Perlleshi (03:19):
 So I like to joke that I successfully worked myself out of a job at that point.

Scott Meyers (03:24):
 Congratulations.

David Perlleshi (03:25):
 Thank you. So we were looking at what we do next, what is the next opportunity. The opportunity was really to monetize a lot of those existing relationships we had, Scott.

So it was going back to those owners, back to those operators throughout the Carolinas, and pivoting into the self storage brokerage side. At that point it was essentially doing the same thing we had always done, which was cold calling and outreach, saying, “Hey, are you interested in selling your facility, and if so, we would love to represent you on the sales side.”

Fast forward now to the end of 2025.

Scott Meyers (03:58):
 Transacted

David Perlleshi (04:00):
 In thirty plus states and sold close to two hundred properties throughout the United States. That was my way into the business.

Scott Meyers (04:08):
 Well, different than some folks. I do not want to say backwards or a reverse order, because everybody gets into the business the way they are supposed to get into the business, but many folks end up on the brokerage side first. Then they say, “Hey, I really want to be representing the ownership side or be in ownership myself.”

Either way, you have to master a few things. That is the underwriting piece, the asset management piece, and knowing what it takes to make them sing on both ends, on the front end and while you are operating, and then exiting successfully. You have been able to go through that several times with other folks as well as on your own.

Let us talk about what is happening recently. This is a rinse and repeat business. If you are doing it right, it should be cookie cutter and the deals should end up looking about the same from front end to back end.

But what is something that has surprised you recently, or what has been a stellar property that stood out that reminded you, “Yep, this is why I love this industry”?

David Perlleshi (05:09):
 Yeah, that is a great question, Scott. What we are seeing overall across the board is capitulation. We have seen that double bottom in the industry, and it has been coupled with a few things. It has been the current state of the economy, the rising interest rates, and a lot of it has been the oversupply that has rushed into these markets, specifically throughout the Southeast.

We are in a situation now where we have seen values really decrease across most MSAs and most parts of the country. Like I mentioned, it has been coupled with interest rates, people not moving, and the amount of supply that has been delivered to the markets.

I think one thing people are not talking about enough in our industry is how valuable the tenants are who are buying and selling homes. Buying and selling homes is what fuels our industry. Some people say that is ten or fifteen percent of our tenant base, others say it is thirty to forty percent. I think it is somewhere in between, personally. However, that is

Scott Meyers (06:23):
 I think it is market driven too and geographically driven. It depends on the site.

David Perlleshi (06:27):
 Absolutely. One thing that has been really exciting for me, especially being on the brokerage side, is that we are now seeing values back at 2016, 2017, 2018 levels, based on where things are trading right now.

So for me, that has been very exciting. One message I have been pushing across to every buyer in the industry right now is that this is a great time to buy. It is a great time to make a play and find an opportunity.

As brokers, I think every broker is guilty of this, and it is not malicious. We are not trying to put inflated inventory on the market. It is just that we are not always sure what the value of these facilities is. So we are putting values out there, pricing deals at where we think they are going to transact, because the sold comparable data we have is from three, four, five years ago. In reality, a lot of that data does not really make sense or reflect what is happening in the market right now.

So what I am telling every buyer out there right now, and this is very exciting, is submit an offer. Just submit an offer. If it is twenty, fifteen, ten, thirty percent below ask, if it is forty percent below ask,

David Perlleshi (07:40):
 Go ahead and submit an offer. More often than not, we have sellers who are willing to meet the market.

I think the biggest shift for us on the brokerage side of the business is that we are trying to find motivated sellers.

David Perlleshi (07:56):
 Let us say, for instance, you are calling me and you are saying, “Hey David, I am interested in selling my self storage opportunity.” The first question I am going to ask you, Scott, is “Why are you looking to sell?”

If you do not give me an answer that makes any sense, then you are not a motivated seller. Now, if you say, “I am looking to retire,” or “I have a partnership dissolution and my partner wants out of the business,” or, “There is a life event taking place that is forcing me to sell,” or, “I am chasing another opportunity closer to home and I need the funds to complete a 1031 into that opportunity,” now there is real motivation. You are a motivated seller at that point.

I think what the market is looking for right now is true motivation. If you are just looking to test the market, this is not the time to test the market. The type of offers you are going to get are probably not that attractive. However, if you are a motivated seller, that is what buyers are looking for in the market, and that has been very exciting lately.

Scott Meyers (08:58):
 It is interesting, David. I can talk to you as a broker, as well as other brokers, and ask this question. I can ask it of self storage investors who are currently in the market and have properties, folks who are looking to get in or looking to grow, and I am going to get different answers.

The question is, and it is multiple choice or add your own, would you define this market as hot, cooling, fragmented, competitive? If you could put a label on it, how would you define this market? And you can’t say confusing. You have to take a stand on something.

David Perlleshi (09:36):
 I would say it is a selective market. Buyers are very discerning right now regarding opportunities. They want everything to check every box, and they should.

There have been a lot of events in the market over the last three years that have really rocked investments. I would say the number one thing buyers have been most sensitive to is incoming supply. Who is expanding, who is building in those markets?

So right now, in terms of the market as a whole, I would call it selective. Buyers are being very selective about opportunities.

If you have a property in a primary market that is fully stabilized and institutional size, that is as hot as ever. You are getting competitive offers, you are getting twenty, thirty, forty bids on opportunities like that. It is the same thing in secondary markets if you have a stabilized property.

Where we have seen buyers being the most selective is when you enter tertiary markets. When you get into tertiary markets and you start getting into substitutional sites, that is where we have seen the biggest cap rate expansion. Buyers have been really sensitive to those opportunities and are

David Perlleshi (10:58):
 Not aggressively pursuing those deals right now.

Scott Meyers (11:04):
 That was going to be my next question. What do you see moving right now? Stabilized, obviously, but then either rank or speak to value add versus lease up versus mom and pop, which is similar to a value add. How would you rank what is most popular right now, from investor appetite and from what is getting across the finish line that lenders are looking at as well?

David Perlleshi (11:27):
 I think on the investor appetite and buyer side, most are looking for stabilized inventory. They really want stabilized inventory.

Scott Meyers (11:36):
 Interesting.

David Perlleshi (11:37):
 Unfortunately, what we are seeing on the sales side and brokerage side, the inventory out there is a combination of things. A lot of what we are seeing right now is C of O inventory, we are seeing lease up inventory, or we are seeing inventory that is probably a year or two away from stabilization and maybe there is equity pressure or debt pressure

Scott Meyers (11:58):
 Causing

David Perlleshi (11:58):
 Causing them to bring those deals to market.

Right now, as far as the opportunities we are seeing on the market, we are seeing a lot more stalled lease ups or early lease up opportunities. That is most of the inventory we are seeing.

I would say that what buyers want is stabilized inventory, because that is what their equity wants and that is what lenders want to see. They want stabilized, cash flowing assets.

Scott Meyers (12:24):
 And again, that was going to be my next follow up question, so thanks for making it easy on me.

Is that being driven by the equity and the debt? Because as an investor, I am always looking for lease up. I want value add, I want more meat on the bone. I am not looking for something that is stabilized because I do not find yield there, and it is harder to get the returns for my private equity or for my own internal yield thresholds.

So when I hear you say that, my thought is the only reason investors are looking for something stabilized is because of their equity. Their capital is not interested in lease up or stalled developments or anything along those lines. Is that fair to say?

David Perlleshi (13:04):
 Yeah, that is fair to say, Scott. There are many reasons why people decide to exit these deals.

Some of these opportunities, they are holding on to them and saying, “Hey, the rest of the portfolio can kind of balance out this debt payment or debt pressure I have on this one.” So they hold on to it.

You may have

David Perlleshi (13:22):
 A dog in the portfolio that is underperforming, but you have another five assets that are performing very well, so it is not a big deal.

I think what we are seeing right now is operators saying, “We probably bit off a little more than we could chew in this market,” and they are retracting a bit.

In 2021 and 2022 we saw this buying spree in markets across the United States where many operators had no experience in those markets and maybe had no business investing in them. They thought, “We can build a portfolio of three or five or seven assets in this MSA,” and in reality they probably bit off more than they could chew.

So you are seeing a lot of operators retrace a little and say, “We understand that we do not want to be in this market, we only have one asset here, and this is the dog of the portfolio because we are not getting economies of scale.” They are looking to exit those opportunities.

So I think it is a combination of things. It is definitely equity,

David Perlleshi (14:28):
 It is definitely the debt pressure we are seeing, but I also think operators can be much more selective about the opportunities and markets where they want to expand.

Scott Meyers (14:40):
 Speaking of 2021 and 2022, where would you say the market is now? Are seller expectations in line with reality and where the market is currently, or is there still a disconnect in your mind?

David Perlleshi (14:53):
 I still think there is a disconnect. I think the bridge is closing a bit and the gap is closing. We are seeing a lot of sellers come to reality now and meet the market.

As brokers, we have to encourage our clients, especially buyer clients, to submit offers. At the end of the day, one thing I hate hearing from our brokerage industry and my broker colleagues is the term “low ball offer.”

We do not really know if it is a low ball offer or not. If there is a credible group that has opportunities or owns assets in that market and they are submitting an offer, I do not think it is a low ball offer. It is probably a market offer.

I think it is more about perception and how we position these offers to clients. The reality is, yes, the values of your deals, Scott, might be less than they were in 2021 and 2022,

Scott Meyers (16:04):
 But

David Perlleshi (16:04):
 Are they worth less than when you bought them ten or fifteen years ago?

So I think it is on us as brokers to recalibrate expectations and perceptions and be honest with our clients about where the market reality is right now versus simply testing the market.

Scott Meyers (16:26):
 Then I hope you accept the challenge. You are pricing the market.

So tell me, what trends are you seeing between cap rates, interest rates, and pricing behavior, given the fact that people are pricing based on broker recommendations? What trends are you seeing between interest rates, cap rates, and pricing behavior in the market today?

David Perlleshi (16:45):
 It is really hard to say, because everything changes based on the market. It changes based on price per square foot and based on cap rates, depending on where you are in the lease up of the deal.

What I am telling clients right now is to try to look at opportunities based on a price per pound, price per foot, and if it makes sense for your portfolio, go ahead and buy that opportunity.

A lot of people have bought opportunities in markets where they bought deals for one hundred dollars a foot, and now they might be paying a premium on an upcoming opportunity where they are paying one hundred thirty a foot.

David Perlleshi (17:17):
 If you take that and spread the cost over three acquisitions in the last five years, you have probably done pretty well across the board in terms of price per foot for the entire portfolio. So yes, you might be overpaying for one opportunity right now, but in terms of economies of scale and where you will be in that market, you have done very well across those acquisitions instead of looking at that one deal in isolation.

So what we tell clients is, be very selective about opportunities. Try to look at deals based on price per square foot. If the deal pencils and makes sense, go ahead and submit an offer, but just submit offers regardless of where they come in.

At the end of the day, as a broker I can only advise a client on what I am seeing now, where offers are trickling in at. The market speaks when the offers actually come in.

Scott Meyers (18:14):
 David, help me help you. In your eyes, what separates a good buyer from a great buyer?

David Perlleshi (18:22):
 I think what separates a good buyer from a great buyer is being prepared.

Being prepared when you submit an LOI is huge. I think this is one thing in the brokerage and buyer space where everybody takes pride in what they do day to day, but being fully prepared makes a big difference.

There is a pre qualification letter you can offer, there is a bank letter from a bank you have done financing with that you can offer. I tell buyers every single time, whether it is a paragraph or a one pager, please provide some background information on yourself or the group that is buying the opportunity. That is always very helpful when submitting an LOI, giving some background on who you are, the business you have done, and what you own.

So I think being very prepared,

David Perlleshi (19:12):
 Having the PSA started as quickly as possible, having a draft PSA available, even if it is boilerplate. It does not need to be something where you go back to your attorney every single time you have a deal under LOI and start from scratch.

I think offering something early with an LOI, plus your buyer background, and when you are close to getting that deal under contract saying, “Here is a boilerplate PSA we always use,” goes a long way.

Try to make it as seamless as possible on both the buyer side and the broker side so the seller says, “Yes, I want to transact with this person.”

Often that is where a transaction can go off the rails a little, Scott.

Scott Meyers (20:04):
 Where

David Perlleshi (20:05):
 There is difficulty and tough negotiations. As a whole, we always want to make things as easy as possible.

So try to ask fewer obvious questions, and show that you know what you are doing. Act accordingly, and show that you will make this as easy as possible and make the transaction seamless for everyone.

Scott Meyers (20:30):
 Alright, so on the seller side, what is the number one thing they do wrong when preparing to list their facility?

David Perlleshi (20:37):
 I think the number one thing they do wrong is deciding at the last moment that they want to sell.

I always tell sellers this. Doing a valuation and deciding to sell your deal is essentially like a doctor checkup. We call it internally a broker opinion of value or a valuation, and everybody goes to a yearly doctor checkup. You want to make sure your blood levels are in line, make sure everything feels right.

It is the same thing with your self storage asset. Go to your broker and ask for an updated valuation, an updated broker opinion of value, or what we call a BOV internally.

David Perlleshi (21:19):
 I would say do that regularly and have an idea of where your asset is. If you are planning on selling in six, nine, or twelve months, let your broker that you trust and have worked with in the past know, and say, “I would like to prepare my deal for a sale in Q2 of 2026. What do I need to do to prepare for that?”

At that point we can get together and go through a due diligence checklist and understand where there are areas of the property that could see some improvement, or areas where you can add value to the deal. Maybe there is some meat on the bone where you are not capitalizing and can extract some money when you go to market.

Right now, sellers can do a really good job by engaging with their brokers, figuring out the timeline for when they want to sell, and preparing for that sale.

David Perlleshi (22:16):
 There is often a scramble when it is time to go to market, and it does not need to be a scramble. There can be a methodology and a strategy behind going to market and timing the market correctly as far as when to bring the deal out.

One thing I always tell my clients is we want to have all of our ducks in a row. We want to have our due diligence materials together. It is good to have your most recent reports from the last month, but it is also good to have the previous year’s reports. It is always good to have previous P and Ls

Scott Meyers (22:46):
 And

David Perlleshi (22:47):
 And monthly reports as well for the last year or two years.

Having a due diligence file, essentially a file that shows the performance of the property over the last two or three years, is very important. You have it for yourself, for the buyers, and for the lenders, so they can quickly look at it and say, “This is a financial deal and this is a deal I can raise equity for quickly.”

Scott Meyers (23:15):
 So David, I want to ask you a question without the rest of the mastermind members in the room, although I cannot guarantee that they will not hear your answer by listening to the podcast.

What are you seeing mastermind members doing differently from the average investor?

David Perlleshi (23:33):
 I see a lot of collaboration on the mastermind side. I think that is where the industry as a whole might be a little disconnected

David Perlleshi (23:43):
 Because many people are not talking to their competitors. They say, “These are my competitors. Why would I collaborate, why would I talk to them, why would I deal with them in any capacity?”

I think the mastermind members have a different approach to how they handle and look at the business. They are collaborating.

So that is one thing we are seeing differently with the mastermind members. I tell Frank this all the time. They have become some of our best buyers. They are very responsive, they act appropriately, and they are respectful of your time. They are all talking to each other, they all understand how to do deals and how to underwrite properly, and they know where to get savings from.

They are doing things in collaboration with one another. I think that is where the mastermind members are probably a step ahead of the rest of their competitors in the business. They are collaborating every day, at every meetup,

David Perlleshi (24:41):
 On every call, whereas others in the industry who view their competition as true competitors are not talking to them, not learning anything new, not getting new skills, and not figuring out how to collaborate and do deals.

So I think that is the number one separator for the mastermind members right now, the collaboration that happens in the masterminds.

Scott Meyers (25:02):
 Well, mission accomplished. That was my design when we put this together. You and Frank have been a big piece of that because of what we just talked about.

You have both given presentations on what mastermind members can do when preparing to buy a facility and work with brokers, as well as how to list a facility. You went into more in depth discussion about the things you just mentioned.

It is no surprise, because that collaboration goes a long way. We appreciate you and Frank and all you have done in the mastermind, and all you have done to help educate those folks who end up being your potential buyers as well.

That is what the mastermind is all about. It is a community that is self serving, but in the best and most organic ways.

I appreciate your time so much, David. Thanks for being here. As we close down here, I would ask one question. What is the smartest thing a self storage buyer can do in the next six to twelve months?

David Perlleshi (26:03):
 I would say be decisive and act quickly. Submit offers as quickly as you can. Update brokers every step of the way and be decisive.

Right now, speed can be used to your advantage as a buyer. If you are able to get an opportunity, whether it is on market or off market, speed is to your advantage. Sellers are motivated, and if you can move with velocity and momentum, I think you will get deals tied up.

The best deals we have sold in the last two to three years have been LOIs negotiated in the span of a couple of days. I

David Perlleshi (26:42):
 Think that the process of submitting an offer, getting a counter, and then sitting on it for five days, a week, or two weeks is not a bold strategy and does not work right now.

Scott Meyers (26:54):
 No,

David Perlleshi (26:55):
 I think acting quickly, responding quickly, and countering quickly is key. This is the time in the market when you can find phenomenal deals.

So to answer your question in short, act quickly.

Scott Meyers (27:07):
 Yeah, I would say if you really want something, you have to show and prove the ability to perform. Sellers are a lot more discerning these days in terms of who they go into contract with, because they have either had a number of deals fall out from buyers who did not have their financing lined up, or a team, or the ability to, like you said, get back and get their due diligence done or negotiate an LOI.

Secondly, they do not want to go into contract and then have it fall back out and make the property look stale, like there is something wrong with it. “It fell out of due diligence, there must be something wrong with it.”

So our buyers are being much more discerning. We are seeing LOIs handle all of the negotiation, then going under contract in a shorter period of time. That is one of the changes I have seen in the market. Nobody wants to commit fully too early. They will get engaged and march down the path, absolutely, both buyers and sellers, but they are going to march a lot further down with less assurance until they get to that place where they are sure. Then it is a short timeframe to go under PSA and then to closing.

Alright, my friend, how does Storage Nation get in contact with David Perlleshi?

David Perlleshi (28:17):
 Reach out to me. My email is david.perlleshi, that is P E R L L E S H I, at franklinst.com. Feel free to email me anytime. Follow me on LinkedIn as well, under my name, David Perlleshi. I am pretty responsive, so anytime anybody reaches out, I am more than happy to collaborate and chat.

Scott Meyers (28:41):
 Alright, thanks David. One last question. What is a self storage myth that you wish would die once and for all?

David Perlleshi (28:50):
 A self storage myth that I wish would die once and for all is that self storage is a real estate asset class that will always appreciate no matter what.

I think people in this business assume that when you are buying a self storage asset, you are buying a true real estate asset, which you are. However, you are also buying a business. That is where people get a little confused.

We are in the operations business in the self storage space.

David Perlleshi (29:24):
 You are only as good as your operations. You are not buying a triple net asset. You are not buying a skyscraper in the middle of a primary market that will appreciate ten, fifteen, twenty percent in value over five or ten years. You are buying a business, and knowing how to operate that business is equally as important as buying a well located, well built asset in a given market.

So I think that is one thing. These assets do not appreciate over time no matter what. You have to put in the work operationally to make sure your businesses are run tight.

Scott Meyers (29:56):
 Yeah, that is a drum we have been beating for a number of years, because I think self storage has gotten a reputation that it is a set it and forget it business, and that no matter what it is just going to do well. That is not the case.

You have to walk the four corners of your business because this is a business, not a hobby, and it is not something that just automatically goes up in value.

I agree one hundred percent, and well said, my friend.

Alright Storage Nation, you have been hanging out with David Perlleshi of Franklin Street. David, thanks so much once again for your time. Looking forward to seeing you again soon.

Thank you, Scott. Appreciate your time.

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