Proptech Startup Storage360 Unveils Self-Storage SaaS

The company says its software can help manage operations, revenue, and expenses.

Proptech startup Storage360 announced a cloud-based software-as-a-service offering for the self-storage market. “Storage360 will address every aspect of customer service, sales, marketing, operations, accounting, facility access, analytics, pricing and revenue management” to improve net operating income, a press release claimed. “By consolidating all capabilities and data into one unified solution, Storage360 will help storage operators make faster, smarter and more efficient business decisions to remain competitive and gain advantage.”

The release touted the background, of Stephen Sandecki, the company’s founder,  who “has held executive and senior level positions with multiple self-storage operators including Store Space Self Storage, National Storage Affiliates and Life Storage.”

Self storage has been in the greater class of alternative commercial real estate investments and, as its traveling companions, saw increased investor interest soon into the pandemic. With prices of multifamily, industrial, medical office, and some other favored types quickly rising, many people wanted to enter or expand their investment in CRE thought alternatives would provide a more financially efficient mechanism.

However, financial realities are catching up with the property type, meaning better operations will be needed to support net operating income.

A 2023 Q1 report from MSCI suggested that the bloom is off the CRE flower. “In addition to more detail by property type, the firm also looked at alterative CRE sectors, including medical office, manufactured homes, life science/R&D, self-storage, student housing, age-restricted, cold storage, and data center. In 2020 Q2, they were 12% of CRE sales. Now they compose 8%, losing a third of their percentage representation,” the firm said.

“There was a relative paucity of large portfolio and M&A deals at the start of 2023, in contrast to recent quarters, though a multibillion-dollar deal is in the pipeline,” the report said. “Megadeals in aggregate only made up 28% of total alternative investments in Q1 2023, bringing the megadeal share closer to levels seen before the pandemic.”

All alternative CRE categories posted double-digit sales drops since the previous year. So did the more regular types, however the ranges were different. For the office, retail, industrial, hotel, apartment, and seniors housing and care, the smallest drop was 8%, while the biggest was 68%.

Self-storage cap rates were below those of multifamily in 2023 Q1, a first according to MSCI. “Yields for self-storage, as measured by the RCA Hedonic Series, have been little changed over the last year, leveling out a little under 5%,” the report said. “Apartment cap rates, on the other hand, steadily rose in 2022, crossing above 5% in early 2023.”