Self Storage Secrets The CEOs Are Talking About!

THE SELF STORAGE REPORT — EPISODE TRANSCRIPT Episode: Self Storage Secrets The CEOs Are Talking About! Guest: Thaddius Campbell — S3 Partners; host of Stories Behind the Door Host: Chris Berg — Abernathey Development Recorded: August 18, 2025 Video: https://www.youtube.com/watch?v=inkl7aWgtfg Key topics: SmartStop's positive same-store NOI and CEO H. Michael Schwartz's earnings-call comments; StorageMart's Alex Burnham and 10 straight quarters of outpacing REIT same-store NOI growth; Manhattan Mini Storage's 60% share of the island and return to subway, podcast and influencer marketing; 0.3% NOI growth against a 30% year-over-year jump in website traffic; the "it's not a hockey stick" recovery debate; SmartStop's $500 million (about $350 million US) in sub-4% maple bonds as dry powder; Arman Aagenians' REIT acquisition chart — nearly $14 billion in 2021 versus under $1 billion this year; the DXD lender survey showing 88% citing absorption/lease-up risk and oversupply; 2023 and 2024 as the highest ground-up delivery years on record; Kristen Millington of Crow Holdings on yield on cost and negative leverage; the 2021 six-asset Crow Holdings portfolio sold to Extra Space at a 42% IRR and 2.2x multiple; 2020-2021 five-year loans maturing and bridge-to-bridge lending from Talonvest; SSA and CSSA Newport Beach. Note: Speaker attribution reconstructed from raw captions. Light cleanup of transcription errors only; wording preserved. Timestamps and YouTube chapter markers removed. Turns marked [attribution inferred] could not be attributed with certainty. ————————————————————————————— Chris Berg: Welcome to the one and only self storage report. SmartStop released their earnings. One of the few REITs that actually came out with a positive NOI. We're going to hear from their CEO with some very interesting comments from their earnings call. I get the feeling that as we go through today's call, people are going to see a common common theme that's very very important to this industry. I'm your host Chris Berg here also doing some land acquisition for Abernathy Development. If you've got some sweet land in the great state of California, please let us know. We might want to buy it and do some deals with you. With me today, my co-host Rad Thaddius Campbell works at S3 Partners doing some really exciting things in storage plus host of I want to say always many podcast, but you just had this beautiful podcast. You're doing a great job. And you had an amazing conversation I believe this morning with Alex Burnham. They're like, "Oh my gosh, man. I got to tell everybody about this conversation because it was so powerful." Thaddius Campbell: I literally texted you like 30 seconds after I got off. For those of you that don't know, StorageMart is a REIT, but they are privately held REIT. So, they don't necessarily disclose information, have earnings calls the way that the publicly traded REITs do. Um, but was excited to get on with Alex. Alex was excited to get on with me. I'm going to get into that. Before I do that, I want to just give a quick shout out to our data partner, TractIQ. For those of you who missed it last week, Noah was live on the show. Um, came in. You can follow the link to TractIQ. Also going to throw up a clip later, a link later for you folks if you missed that. It is now living on our YouTube channel which you can go to the self storage report. You can search the self storage report on YouTube. You can subscribe to it right there. It's really nice to have Eric behind the scenes taking care of us throwing up the links when I need them. Eric, we appreciate you, my friend. Um yeah, you do not want to miss last week's episode and the the gems that came from Noah Star and and of course my co-host Chris Berg, the AI storage guy. They were they were literally like it was 30 minutes of non-stop education. So, I'm going to get back to Alex Burnham real quick and I want to just throw up this quick graphic which shows the earnings from the various REITs compared to StorageMart. So, StorageMart slightly above. This does not include SmartStop yet. They don't really track against SmartStop. Obviously, these are the four more well-recognized REITs that exist. SmartStop relatively new in the REIT space. storage. This marked their 10th straight quarter, Chris, of outpacing same store NOI growth against the REITs. So, a pretty cool thing for Alex. We had an amazing conversation. One of the things I wanted to touch on that I thought was fascinating. They was talking about a lot of talk about what's going to go on with the Fed rate and Alex was sort of the opinion like be careful what you wish for. Of course, as storage in storage, we really want to see housing velocity increase. But if we flash back to when rate cuts uh happened in 2024, it actually pushed treasuries higher and mortgage rates tend to be attached to treasuries, not to the Fed rate. And so be careful because if there's considered to be too much volatility in the market and the Fed does decide, there's been some talk that there might be a jumbo cut to start off a 25 or 50 bip cut, maybe bigger if they do the jumbo cut to start. One of the fascinating things that Alex shared is that may not be the great news for storage that we think it would be if they cut the Fed rate because if treasuries get hiked again because of it, it's only going to increase mortgage rates and slow down the velocity maybe even more than it is right now. So you guys can find that interview live on LinkedIn on my LinkedIn page. But some fascinating gems from Alex Burnham if if you guys know him in the industry, one of the most well-educated and understanding the data points behind what's going on with rental rates of anyone in the industry. So it was really cool to get to spend some time with him. Chris Berg: Interesting to see his NOI numbers as well. If people remember, we were looking and perusing through the earnings for, you know, public and extra and I think it was even maybe NSA last week, but you know, New York didn't perform as well as we had suspected or you would suspect and I remember you kind of pointed out like what's going on there in NYC, you know, with even negative NOI. So, um, what is he seeing as far as demand right now or, you know, anything else more specific to stores that he talked about? Thaddius Campbell: So specific to the Manhattan Mini Storage brand which is fantastic for them. They are 60% of the island in New York City right so 60% of the occupancy he he called it uh I can't remember exact zero search position is what he called it. People literally in Manhattan when they go to search for storage type in Manhattan Mini Storage as their search. So they've they've reached this enviable spot in New York City where they're at the front of the line and it's definitely helped them. One thing he mentioned though is they're going back to to old style omni marketing. You know, they're they're putting up subway marketing. They're putting up, you know, podcast advertising. They're doing influencer marketing. They're and if you're familiar with the Manhattan Mini Storage brand, they've been known for unbelievable um unbelievable marketing campaigns. I don't know if you remember the Biden and Trump campaign that came out last year where, you know, it was a Biden and Trump in character and then it said something like a place to store your old stuff. um you know they they've just done an amazing job over time. But you know that that is is New York challenged. They've been able to avoid a little bit of that just because of the position they hold in the market where they're the first people they're the first store people go to look at when they go to bring their stuff. Chris Berg: So then why are they doing more offline marketing? Did he give a thesis around that or Thaddius Campbell: He he did it's it's what's happening right? people are are not necessarily using Google as it there has to be an overall actually it was we can go deep in the weeds with this he brought up something that you've talked about is with Joe Margolis out in Chicago at the mid uh the Midwest show um the Great Lakes show excuse me talked about the increase in Google search but one of the things Alex pointed out is that some of what's attributable to Google search is that people are now searching multiple times they'll put in an initial Google search they'll get the results and they'll search again and So, what they're feeling and and part of their premise is they want to have sort of that omnipresent feeling for somebody when they go to look for storage because that's going to help make them actually get to a close, right? To actually go and rent their their spot online, you know, if they happen to call a call center or call a person, you know, a a manager of a store in person. They want to have that multiple touch feel where they they've gotten to that person before they go and do their search. Chris Berg: But let's just kind of walk through this. What's fascinating to hear from you is obviously you're always trying to lower cost, right? And so you just said they own 60% of the market. Um people are doing double searches. It's just interesting to me if I've already got that mind share, you know, why am I doing more offline marketing when I've got the mind share? It's easy. And and I guess what I'm getting at is everyone always say storage is a commodity. Storage is a commodity. Is that starting to change a little bit per his suggestions or No, Thaddius Campbell: I think where where and if you listen to the full interview, he explains this far better than I do, but I think the way he phrased it was we're all fighting for a shrinking market, right? There's less people looking and we're all fighting for those less people. And so I think that goes to the premise of the omni marketing like you've got to make even more effort now to draw those people in the door. And and quite frankly, while he didn't try and be Nostradamus and predict, what he did say is if you look at the trailing data, it's it doesn't make you feel like there's going to be a huge uptick in what's going on in housing velocity, which obviously is tied in a lot to the number of people that are looking for storage. Chris Berg: And I'm really curious, and I can speak, you know, to this being in Los Angeles, as people, I'm sure, have watched the news. Did you guys get into the migration situation and the deportation conversation at all and what that mean? Thaddius Campbell: Not even. Nope. didn't even Chris Berg: Okay because I mean there was obviously a lot of people we saw it from you know what the mayor was talking about from New York City that were being put into New York and I'm just curious if that's starting to change the dynamics as well from a demand standpoint if that's part of what he's Thaddius Campbell: Didn't get that deep in the weeds unfortunately but yeah that that the the overall premise was they've been able to succeed and they've been able to to increase obviously 0.3% it's not like it's a a huge number but they've been able to see some modest NOI growth but it's a fight Chris Berg: Well, here's — that's interesting because now I want to play a couple clips from Michael Schwartz. He's the CEO of SmartStop. Um, I've seen Michael Schwartz a few times now live, had some one-on-one conversations with him. In my opinion, I think he's fantastic. He's really really bright, knows the numbers well, and so I want to play some clips because he's saying things a little bit differently. Now, one one of the important things to keep in mind here is he's done an amazing job building a portfolio in Canada. So maybe there's some confluence here where he's just sort of taking his entire portfolio as he's having this conversation. Canada's got a much different migration situation obviously where they've got much more they're open to it but it is tough to get visas there. But let's just hear what um what he has to say if I can figure this tech out which is always a battle. Um but I I do want to this is the first clip I want to play and and I he talks about demand here. So let's listen to this and you and I can chat about it H. Michael Schwartz (SmartStop earnings call clip): 25%. And so, you know, when we take a look at this competitive rate environment, we've been very clear that the market has bottomed, the market is recovering. It's slow, it's steady, it's methodical, and it's not a hockey stick. And I think we've been very, very, you know, clear with our website traffic, which is something that is incredibly important. you know the second quarter you know every year June and July reality is the demand and uh it's just a matter of you know who's going to be uh capturing the demand. So we Chris Berg: So there you go he's saying hey the demand is there now it's just going to be a matter of who's capturing and maybe that's obviously what Alex was alluding to but I'm just hearing it maybe through a different lens. What say you? Thaddius Campbell: I I quite frankly I take a very different um take on that. It's it's opposite of what Alex was saying as far as increased um you know having website that 30% June to July. I mean that's a massive increase year-over-year in terms of search volume or or website going onto a website volume. By the way, kind of funny the hockey stick analogy for a company that that does most of their business in Canada. I love that. It's like it's not a hockey stick. Um but I mean 30% year-over-year growth is is a hockey stick, right? The question becomes, are those people actually renting? You know, are are they seeing and and we saw a SmartStop similar to StorageMart um modest increase in in year-over-year NOI growth, right? So, if you take on the one hand, he says 30% growth in terms of people touching the website, but your NOI growth was only 0.3%. It it's not a huge increase in in net operating income growth relative to what was a huge spike in search. Chris Berg: You know, it's so funny, man. I always love doing the show with you because it seems like God just sort of lines it up where the conversation falls in place because I actually took that clip initially because I think he's continuing with the theme that hey, we've hit the bottom. We've hit the bottom. I could play another clip from Alex Con. He was on another podcast who's from Andover Properties and talked about, hey, you know, I think we've hit the bottom. So, I think all of us, including Nick Walker from CBRE, would would concur that rates are bottoming out. But again, just as Michael Schwartz alluded to, Joe Margolis said in Newport Beach, the thing with with storage, and we talked about this last week, it just does not have a hockey stick recovery. It's very slow. But good news is is hopefully we're going to start to see some more growth in that standpoint. Um, I also want to play this clip as well from Michael Schwartz, which I think is really, really good. Um, and this will get more into our theme throughout the conversation of the show as I also go into uh the DXD lender survey. So here's what he said towards the end of the call and I believe I've got a little bit of the question um from the analyst as well. Analyst (SmartStop earnings call clip): As we think of kind of a a rebound in the space, is there a single kind of forward-looking uh indicator or catalyst whether it's housing market transactions or or something to that effect that we should be looking for to kind of give us comfort that we are in fact inflecting and and that demand is going to pick up. H. Michael Schwartz (SmartStop earnings call clip): Well, I mean, I look, I I don't want to uh beat a dead horse, but uh I think the first thing is you got to focus on supply, okay? Um we uh you know, we we uh we had a 10-year um cycle supply. It should have been a five-year, then COVID hit and it became 10 years. And so, um I think that uh you know, we're we're first focusing on supply and we're starting to see obviously real absorption accruing. It's it's it's going slow. We all want it to happen now. We all want it to to to be a hockey stick, but it's not. And and the good news with that is it's going to keep developers on the sideline for a much longer period of time. So, as we get through this choppiness, I can see some some some better days ahead for storage because of of that supply being I think going to be more muted than maybe we all think um in the future. And so, uh first I want to focus on supply. In addition, um yes, it would be nice to have a robust full housing recovery um in the US. And so I think they're they're uh we're all waiting for it. We're all prepared. But I find what's what's interesting without the housing recovery how we've actually performed storage operators now have better technology, better sophistication, better access to data. You know, I think in our just small portfolio, we're making now three million pricing changes on a monthly basis. we are, you know, modifying our approach based on supply and and overall aggregate demand. So, one, we're going to focus on supply. Two, we're going to focus on our portfolio and optimize the best we can. We showed that we've been focused more on rate than promotions and discounts. And yes, when that next driver, whatever that is, is it housing rentals, is it COVID 2, is it hurricanes, um, earthquakes, whatever that additional driver for storage, SmartStop is prepared to capture the upside in those environments. Chris Berg: I want to say a comment before I do, Thaddius, what say you? Thaddius Campbell: Canadians are nothing if not consistent with their reference to hockey. That was the first Chris Berg: First off, he's not Canadian, right? Right. I mean, the guy's he's out of he's out of Orange County, so he's not Canadian. He's just he's got a nice portfolio. Thaddius Campbell: Operates in Canada. Yeah, he's he's definitely adopted some of the lingo. That was funny to hear the hockey stick a second time. Um, yeah. I mean, to his point, what's going to be the driver? And and I think, interestingly enough, in my conversation with Alex Burnham this morning, he didn't reference a bottom out, right, which I thought was fascinating. Like, I didn't really ask directly if we've seen the bottom, but that didn't come up in the way he was talking. And I think of of everyone that we've mentioned, he was probably the least um least confident that we've hit the bottom and that it's going to turn up. Right. As I alluded to, listen, if the housing market goes south, the the the uptick in storage is it could easily turn the other way. I think you and I have talked for weeks and we're very confident in the long term storage is in a great place. I thought it was neat that Michael Schwartz, it's always nice when really smart people that are CEOs of REITs echo a sentiment that I've had over the last few weeks. I asked you and Noah this last week. You know, is it amazing that the REITs are doing as well as they are given how many headwinds storage is facing. I thought that he alluded to that and it was a point that I I think is well taken Chris Berg: Very much. I think couple things that I would know from that is one obviously supply supply which we'll talk more about here in a minute especially when we get to the DXD lending survey. Um, and a clip I want to play from you from a recent podcast I did with Kristen Millington from Crow Holdings. But also, I love what he said right there is, hey, one of the things I want you to know, SmartStop is well-prepared when this next shift happens. One of the things that people may not know is Michael also has $500 million in what are called maple bonds at less than 4%. You and I have alluded to this in past shows. You're playing this game with money at less than 4%. You're in a different game right now. Like, you just are in a much different game than the average Joe. And I just again respect Michael Schwartz from the standpoint. Very well prepared. If things start to shift and you start to see some assets that I can go buy these below replacement costs, which is another important conversation that's taking place right now in the space of self-storage, he's going to be able to step in and do that and manage those things really, really well. And as I'm looking around California for sites, SmartStop has got some really nice assets here. They are playing the ECRI game. I mean, they are definitely lowering rates. They're going after trying to build occupancy in some of these things and that's a tough game to play which I can share with you here. I want to I don't think you've seen this Dad so it'll be fun to go through this with you together. Thaddius Campbell: Let me mention something really quick because I think this is interesting. First of all, maple bonds are Canadian, right? So they're they're pulling them out of the Canadian government. Still, you know, $350 million US there. And and interesting, you and I talked to Arman made a post earlier this week. We mentioned Arman Aagenians a lot. um he made a post about the REIT acquisition value. I'll call this up real quick so I can show it so people know what I'm talking about. This is the the value of the acquisitions by the REITs year-over-year, right? So look at 2021. Almost $14 billion in acquisitions from the REITs this year looks like under a billion. And so I put this up just to talk about what a great position SmartStop's in with that ammo that they have because there's not a lot of transactions going on. And if they can transact in in the five cap range and have their debt be under four, Chris Berg: That's a you know, you got a two bip spread on your purchase price versus your debt cost and you're doing pretty well. Can you bring that back up, please, that graphic? Thaddius Campbell: I certainly can. Chris Berg: Just to sort of lay out for people. I think there's a few people really well-versed, well-seasoned in the industry and their thesis based on what they've said. So, let's say you go get that loan in 2020, 2021, typically it's 5 years. Then all of a sudden, you got to come back in and go, "Okay, I got to, you know, do something here, right?" Well, we've heard, we've talked about here on the show, Talonvest in Newport talked about we're not just doing bridge loans now. We're doing bridge to bridge to help these people get through maybe a really tough time and they thought, hey, we're going to be fine. They underwrote this thing at 2021 rates. That's where I believe you see a guy like Michael Schwartz licking his chops with $500 million or $350 US, whatever it is. It's a nice chunk of change, dry powder, just waiting for guys to be like, Thaddius Campbell: I can no longer extend it. Pretend I got to get rid of this asset. you can come in, buy it under, you know, for less than replacement costs, and some of these guys are going to swoop up, which leads to what you've talked about before. There's just going to be more and more concentration, I believe, um, in this industry. So, well played, my friend. Chris Berg: Thank you. And and thanks to Arman Aagenians as always. Someday I'm going to convince him to come on live with us. I don't know if it's going to work or not because he doesn't like going live. He likes to prepare his stuff. But, um, Arman, we we appreciate you and and so thankful for all the amazing content you put out. Thaddius Campbell: Amen. Chris Berg: All right, so let's get into this DXD lender survey that recently came out. And again, hopefully you're going to start to notice a theme as I go through some of this info. At any time, Thad, you want to jump in and comment, please do so. But let's just start with this one. How is self-storage loan performance um compared to other CRE sectors in the portfolio of the last 12 months? I think this is really interesting because many people always see storage as kind of that safe haven asset but to see almost a quarter say you know what it's underperformed really speaks to how much supply is coming online the lack of demand that's in the marketplace so this I think is an important uh data point to track but here really speaks to what we've been talking about so what are your top three underwriting concerns today for self-storage absorption risk and lease up you know 88% of the respondents And you might as well in my opinion just put both these together, right? Risk lease up over supply. So you've got these two two top two items saying hey look we are really concerned about all the supply that's come on which goes back to what Michael Schwartz just said. I don't know if the supply as much as we think is going to come on over the next few years actually does which will bode well for the absorption and as you and I have talked about why we believe we've got a really strong long-term thesis um in this asset class. Then you see sponsor capabilities, construction costs, you know, some other items here. But just your reaction to some of this these data points. Thaddius Campbell: Yeah, I think one of the interesting things is that I would expect six months from now that sponsor capabilities is going to grow go up. Um, raising money on deals is getting harder and harder and harder. I I see this all the time like you know you have people that are are hoping to go raise LP money in a a mid to high teen range of a return where if you flip back to 2021, 2022 you were showing deals that were underwriting to a 30-plus IRR now they didn't end up returning that much in many cases but the when you're raising the money it you know the ultimate outcome doesn't matter as much as what it looks like on paper to that investor in the moment and just kind of like sellers are having a hard time letting go of things when they can still remember the peak. Investors are having a hard time letting go of their money to invest in things when they can still remember seeing deals that looked far better on paper. Chris Berg: Well said. I want to play a clip for you um last week just had so she was at CSSA in Newport Beach. Uh Kristen Millington, Thaddius Campbell: You got to keep rubbing this in. I was literally I flew into LA the day of that event and didn't know it was going on and you keep bringing it up weeks later Chris Berg: Because it was such a great event. It was like hey man if you weren't there that's on you bro. So um but so anyway she she just did an amazing job on the roundtable in Newport. Um thus why like hey she would be a great guest to have on the pod. in case you missed this podcast, this conversation with her. I would strongly encourage you to go back and watch it because we really walk into because what she did so well on the roundtable was talk about, hey, here's how I val here's how I see assets. Here's our our underwriting process. And then here what I ask her about which I want to play a couple things. One is I say, okay, um, what's really important to your investment review committee? She's at Crow Holdings, obviously an amazing organization. So, she's got an investment review committee of 12 people that she basically has got to go pitch on assets on why they should or shouldn't do it. So, I want you to listen to her conversation around what her investment review committee looks at. I'll probably pause it. You and I can chat. Then I want to play the rest of a clip where um she put together a really unique deal for Extra Space and some other asset operators that I think um was just great for all for all the owners. So, here's the initial part and we will um chat about it. Chris Berg (podcast clip): Number one metric your investment review committee focuses on is what Kristen Millington (podcast clip): Uh I would say from a underwriting standpoint we really look at yield on cost and how much you can grow that and when you can get out of negative leverage from a just um kind of deal standpoint I would say supply is the biggest headwind you face um like we've said over and over here you deliver a facility and there's a a deal leasing up across the street um that's tough Chris Berg: I mean, sounds just like she was one of the lend in in a lender survey, right? Thaddius Campbell: Yeah. Yeah. It's first of all, kudos. I listened to the whole interview. Unbelievable. If you guys are watching right now, go try and find this uh the CRA report on YouTube. Find it. Well worth listening to. Uh but yeah, I mean, listen, this is the great challenge that we have right now. What does supply mean? And and she alluded to this in the full interview. That's different in different markets, right? I can go to certain markets where the supply is five and I don't want to build there. And there's other markets where it's 10 and I do want to build there. And so, you know, she was really really on point and in diving into that answer even deeper and and kudos to you for the questions that you were asking. Um, but I think that she's 100% right. This is one of the things that continues to scare me in storage. You know, we've talked about 23 and 24 being the two highest deliveries of ground-up developments that we've ever seen in storage. By the way, the graph with that Arman shared with the acquisition value. One of the reasons there was so much less acquisition in 2018, 2019, 2020 than there was in 21 is because there was over supply in 2017, 2018, 2019 as we came out of the GFC and money started to flow again. storage started to become a hot commodity and you know the highest year before 2023 was 2019 right 2018 was the next highest 2017 the next highest there was massive over supply COVID accelerated the lease up very fast and we saw massive money train you know changing hands three multi-billion dollar acquisitions excuse me over a billion acquisitions one in LA one in Dallas one in DC metro portfolios that traded to the public REITs in 2021, right? More money in one transaction than has transacted all of this year in each of those three deals individually. And that doesn't count StorageMart buying Manhattan Mini Storage, which also was more than the total transaction volume of this year. One of the things I want to keep hammering on, and I get on the pulpit on this, is if you're going to develop ground-up self-storage, you better understand how to figure out what's going on with supply in a market. You better have inroads with the other management companies. You better have network within other developers, GC's, whoever it is to really get an understanding of what's going to happen in that market. because I can speak to this firsthand having been at a group that opened up a facility a month after a facility opened across the street. It is not a pretty picture when you're leasing up door-to-door with somebody that especially if they had a little bit of a head start on you. So great great quote from her and and again congrats on on getting such a great interview. Chris Berg: Thank you. She she is fantastic. Definitely go listen to it. I appreciate the kudos. The second piece I want to play for you here is that, you know, as we're putting together our portfolio portfolios, I'm going to say, you know, as we talk to PE people, I always say, hey, if you can if you can start peeling off a four or six pack, you're probably going to get maybe 50 bips premium on your cap rate, right? So, I want to share this with you because maybe you're a single operator, maybe you've got two sites and there's a point in time you think, man, maybe I want to exit. Um, this is kind of a unique thing that they did here a few years ago with Extra Space, putting together several different operators, helping everyone make more money, and it was a win-win-win all the way around. So, I just want to share this with you and then we can uh chat about it and wrap things up. Chris Berg (podcast clip): Last question for you. Um, you had a really unique deal with Extra Space, right? I believe it was a six asset deal, put together some different operators. walk us through that because my understanding is because the way you did that you got a premium cap rate for all your sellers and everyone made more money than maybe they would have on their own. So Kristen Millington (podcast clip): Yeah. Yeah, this was this was an interesting deal and this is back in 2021. So obviously a little bit of a different time but I think you know outside of the deal metrics it was a great deal for us. We got a 42% IRR, I think a 2.2 multiple, and we'd held each of them maybe, you know, three years or under. And so, um, fantastic outcome for us. But I think what really was unique about it is, and we sold this to Extra Space, and like I said, fall of 21. I think what was interesting about this is, um, it was a six-pack that we put together. It was three acquisitions and three developments, each of them with different partners. So, six different partners, blended occupancies, kind of each deal was in a different um phase of its life cycle. You know, some were in CO, some were in lease up, some were fully stabilized. Um we have always said, you know, we underwrite typically on a 5-year hold. Um but we've always said we're opportunistic sellers. Where we can hit a two multiple, we will try to get out and we're always monitoring the market for the right time to sell. And so, what we noticed, this is when Heman was taking a portfolio to market. Um, we underwrote that I think in early summer of that year. Um, we couldn't make the numbers work. Once we saw what it traded for, we saw that there was a demand for that size portfolio. It was around $[unclear] million. Um, so we kind of took that as our key of light. Chris Berg: I just think that that's a great story. Um, that what say you my friend? Thaddius Campbell: I I listen I I think that interesting right transaction that happened in 2021. So, kind of falls into that whole whole premise, but she's 100% right. One of the things that jumped out at me as I was listening to this is the importance of experience in the market. Crow Holdings has been around for a very long time. Really understand things at a super deep level, right? And and I think this is goes back to to what I've said before. We saw a lot of people jump into self storage in 2020 2021 as it became this glamorous industry. Crow Holdings didn't put that deal together a year into their experience in the asset class, right? It took them years to understand the market well enough to and and she talked about something that was fascinating. You're talking about six different assets that are all in different stages of their life cycle and still put them into a portfolio and able to present it to Extra Space in a way that made sense. What I love about this is you had six owners of those facilities who were smart enough to understand the value of letting Crow make some profit off of that deal as well because ultimately going back to what you said earlier, a rising tide raises all ships, right? And and so helps everyone out. Just be smart, right? Be smart about how you operate and and be willing to go listen to people who are really smart and really experienced. The thing that jumped out to me, three years, 42% IRR. I'll take those all day long, right? Like Chris Berg: 2.2x. Thaddius Campbell: I heard that one, too. 2.2x. If you could do a 2.2x in three years and get a 40%. And it goes back to what I said, like, why is it hard to raise money right now? Well, in 2021, you had deals that were returning 40% IRRs in 3 years and and a 2.2x. you know, maybe you'd get a little bit nervous about about investing into something when the the they're trying to raise LP money at a 17 18% IRR. Chris Berg: That's a hard sell. Uh, thank you, man. Great insight always from you. I want to give you the last word. Anything else you want to add or share? Thaddius Campbell: I just listen, I have a a interview going live right now with Barry Sherman on my YouTube for Stories Behind the Door. If you want to subscribe to that, you can hit below. Barry's I I started doing math the other day. He's been personally involved in ground-up construction on about 0.4% of all the storage facilities that are in existence, which if you start thinking about it is an ungodly amount. So, he's well into the 300s in ground-up self-storage development. There's about 70,000 uh storage facilities around the country in the US. So, really cool. And what he what we talked about on that is the he's been through four different cycles in in self storage in the time he's been in the industry where there's been downturns. So, some really good insights into what we're going through right now, how to operate, how to plan for for what's coming on the other end. Uh, but going back to my premise before and one of the reasons I love working at S3 Partners, I think right now is a time where you better have some really experienced people around you to navigate what's coming for the next couple years. Chris Berg: Amen. I want to wrap things up just again by saying thank you to Thaddius. Thanks for joining us here today. Next week, I'm hoping to be able to share with you. I've been plugging in more as your AI storage guy into chat and really utilizing it for some feasibility studies and perspectives on different assets that we're looking at and it has been very very robust. So, we'll hopefully give you some insight into what you can do to leverage that for yourself and give you a better idea of, hey, as I'm looking at this asset, what are some important things to understand? What kind of developments are coming in there and chat as of today is doing a really nice job. Um, getting that information in a very simple way to to digest it, go to links within the city, confirm things. And so, I think that's really really powerful because it it's doing the work while you're doing other things as an AI agent. So, again, I'm Chris Berg, your AI storage guy. Rad Thaddius Campbell, we'll see you back here. uh next week. And want to remind you as well, if you're going to be at SSA, we will be there. We'll be with TractIQ. Be sure and come out and say hello. Come join us. If you want to do an interview with interview with us, let us know. Let be uh part of the show. We'll see you back here next — END OF TRANSCRIPT —