Making sense of ground up construction in self storage

THE SELF STORAGE REPORT — EPISODE TRANSCRIPT Episode: Round Table — The Current State of Self-Storage Development Guests: Lauren Feeney — Director of Acquisitions, Trojan Storage; Cam Paktinat — Managing Director, DXD Capital Hosts: Chris Berg — Head of Land Acquisition, Abernathey Development; Thaddeus Campbell — S3 Partners (co-host) Recorded: November 21, 2025 Video: https://www.youtube.com/watch?v=RYXcvx_41PM Key topics: What each panelist wishes they'd known starting out, the 2021 "throw a dart at the map" era, whether oversupply is negligence or bad incentives, GCs with no storage experience building into oversupplied markets, DXD's zoning-map defense ("a sea of red"), zone-change loopholes and local politics, Trojan's Sylmar mixed-use entitlement play, Kmart/parking-garage/office conversions (North Augusta SC), underwriting processes (Trojan's historical deal database and ECRI strategy by market type; DXD's three buckets — revenue, opex via Extra Space budgets, construction costs), supply-per-capita nuance (Chicago 8 sq ft vs. Phoenix 13 sq ft), 20% development return targets, Lauren's Inglewood story (buying the two houses next door and doubling NRSF), Cam's Rhode Island daycare story, AI in daily workflows (zoning gut checks, site selection, photo-based conversion mockups, investment-committee market briefs), the Extra Space ECRI/street-rate debate and bank appraisals, bullish/bearish theses (Q3 REIT data: EXR 94% October occupancy, 13% national utilization, length-of-stay data; consolidation math — PSA+EXR own ~25% of national NRSF), the 18.6-year cycle and 2026–28 outlook, and the NYSSA Investment Forum (Jan 7, NYC). Note: Speaker attribution reconstructed from raw captions of a four-voice round table. Light cleanup of transcription errors only; wording preserved. Format: first-ever round-table episode of the show. Sponsor read: TractIQ. ————————————————————————————— Chris Berg: The current state of self-storage development — that's the topic for today's show. Welcome to the Self Storage Report. I'm your host, Chris Berg, head of land acquisition at Abernathey Development. Joining us today, some very special guests — it's the first time ever we're doing this round-table format here on the Self Storage Report, so I'm very excited for that. As always, the one and only co-host, Thaddeus Campbell, with S3 Partners. Thaddeus — I always kind of get tongue-tied on that. Thaddeus Campbell: Yes, I can talk — but sometimes it's a challenge for me as well. Chris Berg: Lauren Feeney, head of acquisitions at Trojan Storage, doing some great things. Lauren, great to see you — and hopefully we're going to see Charlie here in just a moment as well. Lauren Feeney: I said hopefully not! I hope she doesn't wake up for us. Chris Berg: We would love to see Charlie and have you introduce her to all of us. And Cam Paktinat at DXD Capital — he is the managing director there. To all of you: really, really appreciate you joining us to have this conversation about development in self storage. It has changed dramatically over the past few years. I want to start a little differently today and have some fun — I think this is a really powerful question, and then we'll get more specifically into where development is at today. Lauren, we'll start with you: what's the one thing that you know today that you wish you knew when you started? Lauren Feeney: I think — and I vocalize this — I'm more on the existing-acquisition side, but we do a lot of development internally at Trojan. One thing, when you're starting off with all the new projects you see coming in, is you think it's easy. But the timeline of a development actually happening — especially in California, especially in LA — has so many headwinds against it that you just have to be patient, prepare for the worst, and hope for the best. I think just knowing how much can go wrong is something I wish I knew and was more equipped to deal with from the beginning. It's tough even with existing acquisitions — you can have the LOI signed, or even the purchase agreement signed, and things can still fall apart. I get really optimistic and excited about a project, and you just have to have a realistic stance that things get in the way sometimes. Chris Berg: I love that you started that way — because if you look at the current supply situation, many people would say, "What are you talking about? It's tough? Look at all the supply in the system!" We'll talk more about that in a moment. Cam, for yourself — same question. What's the thing you know today that you wish you knew back then? Cam Paktinat: Yeah — I think it's having a strong grasp of where rental rates have gone, all the volatility that's taken place. If I'd had a crystal ball back in 2020 and 2021, seeing where we'd be today — it would alleviate some pressures, or have us look at some specific markets that maybe we overlooked at the time. So having that crystal ball would have been great. Chris Berg: And Thaddeus — same question to you. We all know Thaddeus does development as well, and you're going to be asking questions as we go through this round table. But you and I haven't really talked about this — I'd love your answer. Thaddeus Campbell: Yeah — I wish I had understood the volatility of rates based on small changes in occupancy. When I got into the industry in 2021, we were obviously in the middle of a COVID boom, and at no point did I recognize how drastically rates could drop. Look — we saw 60% drops in web rates and street rates based off a four or five percent drop in occupancy. So I wish I'd been a little more like Lauren Feeney and understood how to model out worst-case scenarios in every way possible. Because I got caught up in the hype, just like a bunch of other people, where you thought there's no way this stuff can go wrong. And the reality is, there are a lot of projects out there sitting as raw land, not being built, because rates dropped so drastically. Chris Berg: When you came in, you must have thought this industry just rains money. Thaddeus Campbell: August of 2021, dude. It was fresh off the Nashville SSA — the first live event since COVID. Everyone was riding this wave of excitement. The thing I heard was: you could throw a dart at the map of the US and you're going to be able to develop storage there. That was actually said out loud. And to think back on how egregious a statement that was... So yeah — I wish I'd understood a little more, and been a little more cautionary. Chris Berg: It definitely felt like the Federal Reserve — like you could just print money in this business back then. The one thing I'd say for myself, answering the same question — and I hate to make it so simple, because Lauren, you said it best, there are so many things that can go wrong — but I really appreciate Sam Zell. He always told the story of walking into his freshman economics class at Michigan, and on the board, in big words, was just: supply and demand. To make things simple — I'm not a really smart guy; simple is good for me, complex is bad — if I can really hone in on that supply piece, I'm giving myself a chance to win. I don't think I understood how powerful that simplicity was when I first got started. So let's get into the supply piece, then. I want to ask this a few different ways. I remember when I was at the Newport SSA for California, and you had the big REIT guys up on stage kind of pounding on developers — and I thought, man, why is everybody beating up on developers? But then you look at what's going on in the supply line... I guess my question is: are we really our own worst enemy in this business? Or are the incentives wrong, causing people to do quote-unquote irresponsible development? Lauren, we'll start with you. Lauren Feeney: I think what I'm seeing as the biggest problem in our markets is some of these GCs with no storage experience who are building in oversupplied markets. They build, get REIT management, and then try to sell at CO, out of forecast — and those aren't selling. They're sitting stale. And what's happening is that's hurting our rates, because it's happened in a lot of our markets. I've had people reach out to me on LinkedIn saying, "Hey, should we build this site five miles from your site? What do you think about the market?" And I say — and I'm not just saying this because I'm in the market — that is a huge mistake. It's going to flood the market. And some of these markets don't recover from the supply per person; they're fundamentally ruined when there's too much storage. So I think, to a certain point, it is negligence — in the markets where it's easy to build. It's easy to build for a reason. When we see an easy conversion, we ask ourselves: why is the city allowing this Bed Bath & Beyond to become a storage site? It means it's probably easy to build, and there's probably supply following. I think a lot of people are excited about the industry and want to jump in, and they aren't doing their homework. Chris Berg: Cam, I don't know your capital stack perfectly, but I'm assuming it's somewhat similar to things we're looking at as well — disclose it or not, up to you. But my question: you hear Lauren say it's negligence. Charlie Munger said it best — show me the incentives, I'll show you the outcome. Is this oversupply due to negligence, or the wrong incentives? Cam Paktinat: You know — you can say negligence, or you can say we're in this period of self-storage where institutional capital has come in, there's a lot of excitement around it, and it's a Class A product we're building now. Going back to my first comment: when you're looking at rental rates today, it's really easy to get excited about a specific market. There are certain examples — Denver, for instance, back in '17, '18, had a ton of supply come in, and we saw what happened with the rates. In some of these markets where growth is happening, there's a lot of excitement to deploy capital and get in there — and I think the underwriting is too optimistic rather than realistic about what's going to happen to rental rates. To your point, Chris — it's supply and demand. You have to be ready for that. So I think it's a lack of future foresight into how supply is going to impact things. And then the zoning piece is actually really important as well. There's more clarity now on the areas and pockets you can develop in, where maybe ten, seven, five years ago that wasn't the case. What we do on our side is go in and build a whole map for every deal we look at, and we pinpoint the lots someone could build on. That wasn't part of the picture when I started in storage — but it's very much what we have to do today to make sure we're insulating ourselves from risk. Chris Berg: Bro, I love how you set that up. I've talked about this repeatedly: underwriting dev sites is very much like a football game plan for me. I've got my offensive piece — looking at rates, what's going on in the marketplace — but the defensive aspect of the strategy is: okay, what other areas can people build on? So walk us through that process. Part of this round table is to help everyone appreciate what Lauren's saying — sometimes it's just hype: "Let's go build this and everyone's going to make money." But that's not the case, because if there are other lots that can be built on, it destroys your opportunity to make money on that asset. Cam Paktinat: Sure. One of the things we have at DXD is proprietary technology — we have zoning across the country. We'll put in an address, and a zoning map pops up with rates and zoning overlaid on each other. Some markets we have to fine-tune a little. What that allows us to do — I love to see a sea of red, because red to us means these are all the parcels you can't build on, and green means you can. Where there are green parcels, we go in parcel by parcel: How big is it? What's the zoning code? How big can you build? Will this out-position us? Will the cost of land allow them to do it? It's this in-depth work we're doing now before we even send out LOIs. Everything has shifted so much from where it was ten, eleven years ago when I started in self storage. We do this work before LOIs because we don't want to waste the seller's time, we don't want to waste our time, and we want to be realistic about the deals we approach. And then we get to assess the risk profile along with the growth. In a lot of these growing markets, you're building into the growth, which is great — but we were looking at one today that got shut down, because even though it's growing into wealth and the rates are strong, there's a ton of land, and someone can easily go in now, build another bomber, and away it goes. Chris Berg: Thad, anything you want to add to what you heard from Lauren and Cam? Thaddeus Campbell: No — I think, to Cam's point: not only can someone come in, someone will come in. If there are other pieces of land available for self storage, someone's coming. And we see it. Whatever data platform you use — any time in the last year and a half that I've found a parcel I'm excited about, in a market with any type of available land, there have been multiple people coming down the pike. Because there aren't a lot of places with the rates you need to support new development. So if I find that pocket where the rates make sense and the saturation is low — I'm not the only person with access to some of these technologies now. There are some great AI platforms out there that help us: I can dump in the demographics I want and find census tracts around the country that match. Other people are using them too. Which is why you have to be very, very careful about how you move forward in self-storage development. Cam Paktinat: There's also the topic of people being able to do zone changes on top of that. You can play defense all you want, but there are all these loopholes. We've had markets where we thought for sure no one could come in within two miles of our site — and then they whip a rabbit out of a hat. The dynamics out there are interesting: people are able to get stuff done if they have a good team. Chris Berg: Is that a rabbit out of the hat, or is that a donation to the mayor's campaign? Thaddeus Campbell: That's one kind of rabbit! I was going to say — this is the danger. All of us here are national-based, or at least regional across markets. We're spread across the country, and we're not necessarily in tight with a single local government. So you're susceptible to the guy who does know the people on the zoning board and can make those inroads in his own market — get something done that you just don't have the bandwidth to check out. Which is even more of a reason to be very cautious on the front end. Chris Berg: I want to touch on that — because one of the things, Lauren, that you and Brett do really well: there's a site in Sylmar you guys are doing, and one of the caveats you proposed, based on what I've seen, is, "We're also going to put some multifamily close by." You almost have to have this mixed-use approach, especially because so many cities aren't into self storage. Do you know the project I'm talking about — and can you speak to it a little? Lauren Feeney: Yeah — I didn't directly work on that; that was mostly Brett. But it's true: you kind of have to appease the city and get creative about what the current use of the property is and how you can work with them on creative solutions to get the project across the finish line. That's going to be a really cool project, and I think it'll be a good example for the self-storage industry of how we can find those pathways. I've had a lot of people reach out about that project, because people want to do similar things — especially in Southern California right now, where housing is in such dire need. Adding that component to the storage was kind of a revolutionary concept, and I'm impressed with Brett's skills in piecing it together. It's pretty unique. I think we'll be seeing more of that. Chris Berg: First off, Brett's incredible. My question: if I remember correctly, the self storage is one asset, but the multifamily — it's not attached; it's in a different part but close by. Is that accurate? Lauren Feeney: It's on the same property, yeah — but there's a drive aisle between the two buildings. It looks like the same project. Chris Berg: And when do you plan to open doors? Lauren Feeney: Probably late 2026. I mean, things may have changed since I've been out of the office! Chris Berg: I bring it up because I like to hear what you guys are seeing out there that's creative. Thad and I recently talked about a project in Santa Barbara where — we talked about housing, and Lauren just alluded to the challenges — a guy is building micro-apartments. He said, "I'll come in and convert this building into micro-apartments, as long as you help me build self-storage behind it." And he says the self storage is what made the whole project pencil. Cam, Thad — anything you're seeing on the creative front? Cam Paktinat: For us, we've seen a lot of opportunities come in with developers who are putting multifamily on a site and have a piece of dirt they can turn over for storage — because of the fact that it's lower-impact on traffic, people coming and going. It helps a lot for that use. At times it's difficult for us to do those deals, because we're building into the growth, and based on how we look at deals, we want to stabilize in a certain amount of time — whereas if it's a really long-term hold, it might work well. Other creative opportunities we've been looking at: parking garages and office conversions. We're seeing a lot of those types of deals come in, where you're able to get the building at a cost basis less than what we'd build it for. The cost of putting the structural systems in to make it work — if it's a market with really strong rental rates and high barriers, that can be a great deal to go down the line with. Thaddeus Campbell: I was just going to say — creativity is key. We just closed on a project in North Augusta, South Carolina. It's a conversion of an old Kmart that had been sitting empty. Obviously everyone's heard of a Kmart conversion, but we had to add other aspects to the simple Kmart conversion and sell that to the city: we're now adding boat and RV on the existing parking, adding a little exterior drive-up storage. Creativity is extremely key these days. You can't just do what you did in '17, '18, '19, '20 — find an open parcel, build a facility, and expect it to be a roaring success. Chris Berg: I want to get into your underwriting process. Before we do — a quick thank-you to our data partner, TractIQ. As we get into this underwriting conversation: if you're looking for the right data — supply, demand, what's in a three-mile radius, all the aspects that are critically important to underwriting an asset — do yourself a favor and check out TractIQ. Tell them the Self Storage Report sent you and they'll take great care of you. It's a free consultation to find out how their data can inform better decisions. These aren't $50 investments — you're talking 10, 20, sometimes $40 million. Mitigate risk as much as you can. Again: tractiq.com — tell them the Self Storage Report sent you. Lauren, we'll start with you. Walk us through how you approach an asset strategically to make sure you're underwriting correctly and mitigating risk as much as possible. Lauren Feeney: Similar to Cam, we have proprietary software where we track every single deal we've ever looked at. It has the rent reports, all the conversations that were had around it, the pricing, my underwriting, and the date. I think this is critical for anyone really trying to expand on a national level, because it's so easy to forget the numbers. Say I'm hyper-focused on buying assets in Salt Lake City: I can use this software to look at the trended rates of projects at every life cycle that I've ever underwritten — okay, this project is really similar to the one I'm underwriting now. I can understand the seasonality from past projects just from the uploaded rent reports. I can see what market rents were, how quickly occupancy built and stabilized — real data from projects within five to ten miles to inform my underwriting. What better data on a market than what the historicals have done? Then I add a layer: what do I think this project can do under our branding and our management? Maybe that gives it a little buffer of 5%. Then how we implement ECRI, and when. So: a lot of historical data, a lot of understanding what the REITs are doing and what the competition is, and I also look at how REIT-heavy the market is — versus more mom-and-pop — because that influences how I underwrite the growth, and what the market rates are. Having a historical database is critical for fine-tuning underwriting, because we're at a disadvantage: we don't have the data set the REITs have, especially entering a new market. In San Jose, where we have four properties, I can easily underwrite a project. But in new markets, we're kind of going in blind — so that historical database is critical for us. Chris Berg: For people who aren't as familiar, Lauren — walk us through how you approach a mom-and-pop market versus a REIT-infiltrated market. What does the distinction mean as you underwrite? Lauren Feeney: There are pros and cons to a REIT market. If it's a mom-and-pop market, you have to go in asking: are the renters in this market used to lower ECRIs? Are they used to lower rates? Are we going to come in as this institutional group that customers shy away from, because we implement more aggressive tactics than the market is used to? If it's REIT-heavy, we can pull Radius data to see what they've historically done — but we have to know the competition will be different in terms of getting renters in the door, and the market-rate battle we're seeing. It changes our lease-up strategy, and it changes our ECRI strategy, based on the type of market we're playing in. Chris Berg: And Cam, we'll get to you in a moment. As you guys do acquisitions or development — for us, it goes to our investment review committee, and it's got to be an H-double-hockey-sticks YES or we don't do the deal. What is it for you? Lauren Feeney: Return is really the driving factor — what we think we can do at the site. A lot of underwriting is based on future projections, and it depends on the all-encompassing picture. Thad and I have talked a little about supply per person and using that as a benchmark. I used to blindly say to brokers — and I regret saying this now, because I look at the world so differently — "We'll never look at anything with 10 square feet per person or higher." That's completely changed. We're looking at a deal in the suburbs of Chicago, a pretty stagnant market — on paper it might be the perfect deal at eight square feet per person, but they're not having a population boom; you're pretty much going to have steady growth if you build or buy there. Whereas a Phoenix, Arizona might be 13 square feet per person, but the population is growing 3% every year. You have to look at every opportunity super differently. And to your point — we only do something if it's a "hell yes" as well. On returns, we aim for at least a 20% return on developments. Chris Berg: You've got to have that margin of error, because — as you said at the beginning — so many things can go wrong; you just don't know. Cam, walk us through your underwriting process. Cam Paktinat: Sure. DXD is driven by data — that's our thesis and our motto. Data, data, data. That's the main thing we look to, and we try to gather as much as we possibly can. Very similar to Lauren's team: we have technology — a database of every deal we've ever looked at, every deal that's been on CoStar, every deal we have notes on, construction pricing in the market — we pull it all in. So when we're looking at opportunities, we can assess the rental rates, the cost of building, where someone else can buy land and at what price, and whether we'd still be competitive if they took that piece of dirt. Data is more key today than ever, to make sure you're making the right choice on deals. Very simply, when we look at opportunities, it's three buckets. First, the revenue piece — all about the rental rates, and the timeline to lease up based on supply and other properties in the area. We have achieved-rate data, historical rate trends. One interesting thing: the average unit size on our existing assets, and what we're moving forward with, has gotten larger. Seven, eight years ago, 85 square feet was the number. Now we're getting closer to 100, if not over 100, in a lot of these markets. The second bucket is operating expenses. Like Lauren said — well, we go third-party operated for all of our assets, so we'll reach out to Extra Space and they'll provide their budget for what to expect on operating expenses. And taxes — because we work in so many municipalities, we do our own underwriting, but we also have a third party review it to make sure we're spot-checked and correct. The third piece is the cost of building it. We've been really lucky — we have a killer construction team who've built really strong relationships across the country with amazing general contractors. Even while we're doing LOIs, we're talking to them, getting pricing information on what they're seeing, what deals they're bidding — because we're literally doing deals from Hawaii to the East Coast. We really rely on those relationships to get comfortable with those numbers. Chris Berg: I hope people are hearing what I'm hearing: this is not for the faint of heart. If you're going to do this, make sure you've got — like you just mentioned, Cam — a great team around you, great contacts. It's such an integral part of the deal. Maybe even a mayoral campaign contribution, whatever it is, to grease the wheels! Thad, anything to add? Thaddeus Campbell: Just to piggyback off what they said — I hope what people are taking from this is the weight of ground-up development. This is not something where you heard about storage last week, decided storage is a great way to go, and should all of a sudden think it's a good idea to put a parcel under contract and expect a successful outcome. Chris Berg: I hope the arc we've created is from 2021-Thaddeus saying, "Just take a dart and throw it, and you're going to be good," to, "Yeah, you know what, maybe I shouldn't do this unless I have a pretty good idea of what I'm doing." We're coming up on time, so a couple more things. I think stories are really powerful. Lauren, back to you: a story — good or bad — that surprised you. An asset you went into thinking, "I don't know," or one you thought would crush and didn't. What's a great story from this business that would be powerful for people to hear? Lauren Feeney: Let me think of a good example... I could use the Inglewood example again — that's always my first thought. We had this entitled deal that we purchased from a broker, and quickly we realized how expensive the project was going to be, because it was a six-story project in Inglewood. I went into our head of construction's office — he was sitting there and said, "God, Lauren, if we could just make this lot bigger." And I said, "You know what? That's super interesting." I went on Google Street View, looked at both sides of the parcel, and saw there was a house for sale on the parcel next door. This is right by SoFi Stadium — a great gentrifying market that's going to be great in a few years. I zoomed in on Google Maps, called the real estate agent on the sign, and said, "How much? We'll buy it right now." Long story long, we ended up buying the two residential parcels next door, and we're doubling the net rentable of the project — which gets our construction dollar-per-foot down massively and has almost doubled our returns. In the spirit of creativity — especially in construction and development, which I'm not super well-versed in — you have to get creative and look outside the box to sweeten the deal. There's always opportunity to enhance — the structure of the building, the lot size, the unit mix — to boost your return somehow. Thaddeus Campbell: Can I just say — I'd love to be as "not in tune" with development as Lauren is. Lauren Feeney: She keeps saying I'm not that good at development! Before we started, we were talking about how reading zoning codes — I could never be super in the weeds on development, because zoning code... my face literally glazes over every time I try to find anything zoning. So I'm glad I'm not super in the weeds on that. Chris Berg: No — I was going to say, she's got every other part of it down. You can find someone in the back office to read the zoning code — or a ChatGPT, which I'm going to get to. But I do want to say, I think that's such a great story. That's a site I loved — one we wanted to do, or I wanted to do. And part of the story you aren't sharing, if you don't mind, is that you had to go finagle to get this deal done, too. What I remember is it maybe wasn't the cleanest deal, but you kept pushing to get it across the finish line. Lauren Feeney: That's for another day — but the characters we had to deal with to get that project done were hilarious. From the real estate agents we worked with, to the people living in the houses on site that I had to knock on doors and do site visits with. It was crazy — there were nine people living in a one-bedroom little house. It was gnarly. The whole thing was very grassroots. Chris Berg: I can just see Lauren: "Hi, I'm here to sell Girl Scout cookies... oh, you're selling your house? Okay." Lauren Feeney: Like the Lego Movie — I was big corporate America coming in. "Here's our best and final offer. Here's a check. Take it or leave it." Chris Berg: Cam, how about you? Cam Paktinat: For me — listening to what you were saying, Lauren — one of the main reasons I got into real estate is that it's all about relationships. That's one of the benefits: you're dealing with people every single day. We built a project in Rhode Island where there was a basically dilapidated daycare behind the property. The woman had put all her money into it, and she was so scared when we came in to buy the property — where was her business going to go? The community was scared — where's their daycare going to go? We figured out a way to build them a brand-new, Class A daycare to move into — and the kids were all excited during construction, watching it get built. That, to me, was great. And other moments — right now we're dealing with sellers we've built really good relationships with. I'm not much of a wine guy, but a seller took us out and had this whole spread of really expensive wines, letting us taste them, walking us through it. It's those little experiences you have throughout these development deals. When you finalize a deal — there are self-storage facilities everywhere, but it's the story behind that facility, and the relationships built behind it, that are really why I love what I do. Chris Berg: Really, really well said. All right — two final questions as we wrap up. First: AI. I'll throw this out to all of you — whoever wants to jump in first. How specifically are you using AI right now in what you're doing in storage? Cam Paktinat: So much. There are a couple of ways. One — you guys mentioned zoning codes: we use it, but we verify it. A lot of times it helps us out; ChatGPT will take the zoning code and pull the important information out. But we've also built our own database — we put in an address and it pulls all the information together, and it will even say, "We think there's a 95% chance you should do this deal." Obviously that's just the AI working off the data — but it's having a system our team has invested in, to utilize AI across all the data we've gathered over the past five years and make it digestible as we look at deals. It's every single day. They've also created ways to watch our operating environment: if a new project pops up in Radius, we get a ping on Slack the next day — "this project popped up" — so we all know to go look at it. We use it in every facet of our business. Chris Berg: I've said it on the show for a while: if you're not using it, you're going to get left behind very quickly. Thad — how are you using it? Thaddeus Campbell: Every day. Like I've talked about — we're doing site selection using AI to narrow things down. To Cam's point, you're not going to just use AI and then go send an LOI. But you're going to compress the amount of time it takes to find an actionable site by a hundred times. And then, of course, you have to do more work — but you're doing it on fewer projects. So your time is much better spent on the things that are actually likely to lead to a successful deal. Lauren Feeney: We use it multiple ways. Very similar to Cam — our development side uses it as a gut check for zoning, and then they do the legwork if it passes that check. The way I use it for existing buildings, and conversions specifically — I use it all the time, but one thing that's been creatively very useful lately: I can upload pictures of a facility, whether it's a warehouse conversion or an existing building, and do mockups and strategize — how to do a unit-mix tabulation on it, what kind of R&M we could do on the building, what it would look like. "Help me understand, based on the materials and construction of this building, how we can enhance it" — and create a plan for that. You'd be surprised: "What material do you think this building is made of, and how can I enhance it to make it more stable, or Class A, or institutional grade?" — just as a gut check on what the cost would be. On the capex side, it's similar — understanding what you'd need to get it up to institutional functionality. And then I use it for investment committees: if it's a new market, I use it from a demographic standpoint to paint a picture — tell me everything about this city, what it's known for, the demographics, household income, and layer on a real estate perspective. "I know we've never heard of Egg Harbor Township, but this is the background on what this area is all about." It saves me time instead of rooting around for what a city's known for. Chris Berg: Yeah — some of that 24 square feet per capita: that's what Egg Harbor Township's known for! Lauren Feeney: Exactly. No more projects! Chris Berg: I don't know why — I always thought that one was a funny one. Really good stuff. Okay — I'm going to have all of us answer this last one. I know your answers, but be as objective as you can, and dive into your thesis. Bearish or bullish on storage — over the next five, I'll even give you ten years? Cam, we'll start with you. Cam Paktinat: Sure. I'm bullish on storage. And the reason is that these discussions are happening — it's getting institutional. On the capital and debt side of things, everyone understands you have to be disciplined to get deals done. I know the questions we get from our investment partners and the banks looking at these deals — they're way more intricate than they ever used to be. I think that's going to help ensure that, moving forward, the right deals get done. And as I talk to my friends and peers — storage is more and more just becoming part of people's lives. I live in a new-build community: there's a lot of living space, but there's no storage area. The need for it, the necessity of it, is going to continue to grow. As long as we as an industry realize this is an institutional-grade product with a lot of money behind it, and we stay disciplined — I'm very excited about the future and where it can go. Chris Berg: Real quick, to piggyback on what Cam mentioned — something that came up recently in a conversation Thad and I had, and that I got interesting feedback on. Do you think part of Extra Space's strategy with ECRIs was to lower street rates so much that it made it harder for people to go to banks and say, "This is where this pro forma is going to go" — thus limiting supply? Cam Paktinat: It's interesting. I don't know if that was the goal behind it. But it certainly — just dealing with appraisers on deals who are only looking at web rates, who have gotten used to looking at web rates — it created a lot more work, and a real barrier. You need to have the data behind the story to get a deal to move forward. Chris Berg: You've got to sell the bank, right? What's fascinating is how long that's been going on, and yet there's still all this supply in the pipeline — at some point it's going to give, I would presume. Thad — your thesis. Bearish or bullish? Thaddeus Campbell: First of all, I love the fact that you just asked Cam whether Extra Space was trying to depress rates — when Extra Space manages almost all of DXD Capital's product. I love that. No shame in Chris Berg's game whatsoever. Chris Berg: I also want Extra Space to manage our stuff! I'm just saying — hey, look, that's going to be part of my game plan. How do I win? Thaddeus Campbell: 100%. Also — I thought I told you: I have a medium-rare filet mignon sitting over there from 20 minutes ago! No — I'm kidding, and I'm loving this conversation. To Cam's point, we need these conversations to happen. I wouldn't call it irresponsible development — I'd call it unknowledgeable development — that really happened in a major way in the late teens and early '20s. Because you heard: self storage has never had negative NOI growth, it grows every year, you can't go wrong. And what that led to was nearly a doubling of the square footage in the country in a matter of ten years. You went back to Sam Zell and supply and demand — well, I go back and study previous problems. Office space in the '80s: it doubled in a ten-year period, and then we had a massive crash. So am I bearish or bullish on storage? I'm bullish on the five-to-ten-year span. In the next year or two, I think we still have some pain to deal with from the supply that's come online. Look at it right now: rates are lower than they were before $4 trillion of money was printed in 2020. Do I think that eventually the natural inflation from all that extra money hits storage rates? Absolutely. Has it yet? No — because of the supply problem we face. Which is exactly why I love having conversations like this. Chris Berg: And with that said — that's the thing. Look at all the supply still in quote-unquote planning. If we get some rate cuts — which is clearly anticipated if we get a new Federal Reserve chair in May — and rental rates start to go up a little, you could see a lot of that planning stock come back into the system, and now look what happens in '27 and '28. Lauren — your thoughts? Bullish, bearish, thesis? Lauren Feeney: I'd say I'm cautiously bullish. The reason: I listen to all the Q3 REIT reports, and you can't deny — Extra Space showed data proving their move-in rates are improving, that they're moving people in at higher rates than at any point in the last year and a half. They have record-high occupancy — Extra Space had 94% average occupancy for October alone. That's a huge signal, portfolio-wide, that things are improving nationally. Storage utilization nationally is up to 13% — it was 11.5% a year ago. More people are using storage nationwide, so demand is naturally increasing. And something really interesting Extra Space shared: length of stay has increased steadily over the last two years — 60% of their new customers stay at least a year, and 40% stay at least two years. They're best-in-class, but I think that's a really good indicator of the long-term need for storage. But when you're talking about groups the size of DXD and Trojan, there's the whole element of consolidation and what it means for the industry — long-term, I think that's the bigger threat, more than a demand issue. Public Storage and Extra Space combined, without managed sites, own 25% of the net rentable square feet nationally. Which means there's only about 60% that's actually obtainable white space — and probably only 20% of that is actually mom-and-pop owned. So if you think of it in terms of a 2.3-billion-net-rentable-square-foot market, that's roughly half a billion feet of obtainable white space — mom-and-pop sites that we can buy. I think that's going to be the bigger headwind. Chris Berg: Where can I buy the Self-Storage Almanac, by Lauren Feeney? That was just bam, bam, bam — dropping it. I'm going to jump on all your coattails and say I'm definitely bullish on the industry as a whole. A couple of things I'd add: number one, Lauren just brought up great stats on Extra Space occupancy ticking back up — and we still haven't seen any movement in the housing market. Once rates get lower, new Fed chair — I think that opens things up from a demand standpoint. And the big thing we talked about earlier: micro-apartments. The apartments being built now are even smaller than normal; Lennar and KB Home are building smaller homes. There's going to be less room for storage at home. And what's interesting with Gen Z — they use storage more like a garage than maybe the baby boomers do. So long-term, five to ten years, absolutely bullish. And I think we're all in a pretty good position with what's coming economically. Thaddeus and I talk a lot about the real estate cycle — again, just a thesis, we'll see how it bears out — but if things go as we anticipate in mid-to-late 2026, I think there could be some really good opportunities if you've got some capital in '27 and '28. That's my thesis, and that's why we're here. Thank you to all of you for being here. Anybody have a last word? Thaddeus Campbell: Two things. I want to give a shout-out to Matt Begs of the Feldman Company — he had a last-minute emergency and couldn't join us today. Great guy, super intelligent — feel free to reach out to him if you want to pick his brain directly. A little sad he couldn't join us. And a shout-out to the New York Self Storage Association — I was joking about the filet, but they put on an amazing show up here. For those of you not registered yet: January 7th, in New York City, is the Investment Forum — for my money, the single most informative event you can go to. Google or ChatGPT "New York Self Storage Association" — or my man Erick behind the scenes will throw up the link so you can register for the Investment Forum. Chris Berg: To what we're doing today — it is more important than ever to get informed and understand what's really going on. Which is why we do this show, the Self Storage Report — the best 30, now 47, minutes you need to make smart investment decisions in self storage. I'm Chris Berg; that is Lauren Feeney, Thaddeus Campbell, and Cam Paktinat. Thank you so much for joining us — we'll see you back here next time on the Self Storage Report. — END OF TRANSCRIPT —