Self-Storage Cap Rate Calculator
Self-storage is the highest-margin commercial asset class. Calculate NOI, cap rate, and value-add potential on a facility purchase or development.
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| Value at 92% stabilized occupancy | — |
Self-storage is the highest-margin major commercial real estate class — 32-38% operating expense ratios vs 40-55% for apartments and office. Stabilized occupancy of 88-92% is the industry norm. The business model: no on-site tenants, minimal maintenance, monthly automatic rent push, and the ability to add 'auxiliary' revenue (tenant insurance, late fees, retail).
Why Self-Storage Has High Margins
No tenants on-site = no make-ready costs between move-outs. No interior maintenance = no plumbing/electrical/HVAC by unit. Pricing is set by computer (revenue management software) and pushed monthly — tenants rarely leave over $5-10/month increases. Result: 60-68% NOI margin vs apartments at 50-55%.
Value-Add Levers
(1) Occupancy: bringing a 70% facility to 90% adds 25-30% to NOI without any capital expense. (2) Rent push: industry standard 3-5% annual increases — automated, low resistance. (3) Auxiliary revenue: tenant insurance ($10-15/mo per unit, 70% margin), retail (boxes, locks), late fees. Often adds 8-12% to EGI.
Underwriting Watchouts
(1) New supply within 3-mile radius (oversupply kills pricing power). (2) Customer concentration — single-employer towns at risk. (3) Climate-controlled vs drive-up mix (climate-controlled commands 50% premium but costs more to build/maintain). (4) Tenant insurance attach rate — institutional operators run 60-70%; mom-and-pop run 20-30%.
Last updated May 2026. Sources: Self Storage Association, CBRE Self-Storage Cap Rate Survey.