AJ Osborne
AJ Osborne has been a guest on Collecting Keys, the real estate investing podcast hosted by Mike DeHaan, Dan Austin and Dylan Koch.
Self Storage, AI Hate and Extortion w/ AJ Osborne
AJ Osborne joins Mike, Dan and Dylan after the hosts retracted a false story about him, and spends the episode explaining how self storage actually works outside the institutional headlines. He covers why published cap rate data reflects less than 1% of facilities in the top MSAs, why small facilities have no institutional exit, how rate collapse plus rising interest rates cut values roughly in half, and how his company is buying stuck developer deals at 40% under replacement cost. The conversation closes on AI adoption in operations and why staying solvent matters more than timing the market.
Key takeaways
- Widely quoted self storage cap rates (around 5.7%) come from under 1% of assets in only the top 10 MSAs; outside those metros cap rates are averaging 7.7% and range from 7 to 9 caps.
- About 65% of self storage is owned by single-owner mom and pops, and institutions won't buy a $1M, 80-door facility outside a top 100 metro, so 'stabilize it and flip it to a REIT' is not a real exit plan.
- Damage came from two directions at once: market rents for storage fell roughly 20% in a year (REITs cut street rates then raise renewals) while interest rates and cap rates rose, cutting some property values by 50%.
- AJ is buying heavily now, roughly half from developers who built during the boom and can't get into a perm loan, at about 40% under replacement cost, mostly in overbuilt Texas and Florida markets.