361. The Last Time Self Storage Did This, We Made Millions (You Have 2 Years)

These are long-term investments. It just happens to be we are now on the right side of the cycle that actually is like wind in your cells as opposed to being where we were in 2022. The winds have shifted. What we've seen in the last 12 months, this is the story. Deals are now selling. We bought more in a six-month period of time than we'd bought in the previous three years combined. Yeah, yeah. It is very similar to what we were doing after 2008. We had a four-year time frame. We were gobbling up everything we could. This is very similar to right now. It is mid-year of 2026 and this has been a big change over the last really 12 months in self-storage. So, Connor, today let's take a look at what is happening in self-storage. How this year has turned out so far. What we can expect, we need to look at the reeds. We can look at acquisition pipelines. We can look at new starts. There's a whole bunch of stuff to talk about. Now that we've had enough time go through the year to really see what's happening. Exactly. We're living the crystal ball in real time. I think 2026 has panned out to be a lot different than everybody expected it to be. Going through 2025, I think everybody had these expectations for 2026 and I think a lot of that has been vastly different than anybody could have expected. I think moving into 2026, there was a lot of expectations. Both on the macro side, the industry side, a lot has changed, not panned out for positioning investment. We've seen a lot take place, especially some really eye-opening information from the reeds, what they're doing, and between the reeds, the bond market. That gives us a really clear picture of the next two years. By seeing exactly what they're doing, their actions, and that can really set the stage for that. Before we dive into that, maybe we hit on just kind of the marketplace and rates and occupancies. And what we've seen, the health of sales storage, let's kick it off there. It's a different year than was expected. That's true. 2025 was the beginning of the transition. We've had these down years. For people that are just now tuning in or maybe they've heard a few episodes, things like that. I know most of our audience is a core audience and is amazing. They're very hard to die hard. But for those that are tuning in, high interest rates, we had a huge contraction after 2022. In fact, 23, I believe, was the largest rate decline in self-storage's history. That's including 2008. There was a lot of things going on that caused that. A lot of people remember back in 2021 in 2022, we started talking about what we believe would be the self-storage bubble. And the driving reason behind that was rising. And we believed interest rates would rise. And the housing market wouldn't collapse. It would stagnate. And that would create some fundamental problems with refinance on the asset side, the storage market side, the buying and selling up facilities. That makes refinance problematic because interest rates would jump because of inflation. We talked a lot about, back then, this made up word of transitory inflation was starting to be discussed. That's bull crap. There isn't transitory inflation. It's just inflation or it's not. Call it what it is. And so interest rates rising to come back that lowered the price of acquisition to storage. So storage facility prices and what you took to buy one dropped. Interest rates went up, investors couldn't afford as much. Then the major driving driver evaluations wasn't on the market side. Our listeners, our community, our diehard people, they know we talk a lot about intrinsic and extrinsic value. The value of an asset as it's traded on the market, that's that extrinsic value. You can have the exact same income and the price of an asset can go up and down depending on external things like interest rates. But what we were focusing on during that time and the big driver was actually interest rates effect on intrinsic value because the housing market would stagnate. And we looked at basic data. We looked at out of the housing market at the time, 94% plus of all mortgages were locked in at like 3%. So that meant that homeowners wouldn't get in trouble because they had 3% on a 30 year mortgage. And as inflation went up and incomes were rising, the actual weight of that payment, the basis of it got better. So if you are a homeowner, it actually got better through this period of time. Today homeowners have more equity than they've ever had. Their income to payment ratio is like better than ever had. But it killed new buyers wiped out the home market in that way. Everybody knows over the last few years. If you're trying to buy a home, it's like impossible. What a cost. So expensive. Stopped. Yeah. That stagnation kills storage. Is that figure still around 40% for homeowners who are moving that are driving that business for self storage like that 40 plus percent mark? Yes. That new moving is what's driving that occupancy for those storage facilities in those different markets that about 40% of the tenant base is coming from moving. Yes. Yeah. That end. So it's a ton. It's a ton. So what Connor just pointed to, that is so important to understand. That moving drew so much occupancy. And in 2019, 2021 and even into 22, historical interest rates combined with the government's spending created a landscape where moving renovations, motor homes, everything exploded that drove up rates that drove up self storage prices. That's where we got to the self storage bubble. We believed it would pop because of the acquisition price would have to go down to interest rates. But because that 40% Connor's talking about that went away. And that's why we saw the rates drop. Now since then, self storage has been hit over those years. Well, in 2025, everyone, that's when we saw the stabilization begin to take place. That's the first time we saw, okay, rates and occupancies aren't dropping. And a lot of this was tied not just because of the rates, but new supply. So during that window period of free money, crazy demand, developers built like nuts. But developments, everybody take a while to come out. They take years. So what they started in 2020 didn't come out until 24 or 25. We're still seeing new starts trickle in in 2026 from that boom period. So it was a build up of new supply while demand was dropping and cost were going up. Bad. Yeah, it's very easy to see, especially now where you've seen a lot of those dynamics coming full circle. And people are in these distressed situations and needing to exit on those developments where yeah, the landscape is vastly different than it was before. I think too, this discrepancy between occupancy and rate management and revenues is a really important thing to know going through those times as well, where yeah, the occupancies were coming down. And so therefore, a lot of us had to focus on adjusting the rates to keep and maintain that level of occupancy because you naturally have a level of churn every month of occupancy was around 4%, 5%, something like that. I'm pretty minimal, but you have that. And then on top of that, you've got this huge swath of tenant base that you just don't have anymore because people aren't moving. And so you're doing everything that you can to try to get in and attract those tenants to drive the occupancy. And you know, big picture here, you can't manage revenues if there's not occupancy. Like occupancy has to be there. It has to be first. And you know, there's a certain degree where the occupancy doesn't matter. Yeah. It's like this dichotomy where it's like, you know, if you're getting that 85, 90% plus like driving the rate management a big deal. And obviously too, you got a unit specific in each of these facilities. So if you got a high demand unit, always occupied 100%. You know, and that's in the market. Places a whole obviously drive, maintain, manage those rates aggressively as is that market can can stand. But I just wanted to note that because I think that's a common question that we see a lot of too where it's like, well, has it occupancy or revenue like which is more important? And it's like, well, if you can be 80% occupied and get more money in the bank than being 90% occupied, then I would do the 80% occupied. But if I continue to see trends of, you know, downward trending occupancies and revenue, like then maybe I'm going to start really focusing my efforts on maintaining occupancies and maybe not especially in adjusting the rigidity because you don't have, you don't have the people to raise rates. Yeah. There's no revenue management because there's no revenue. And so with all those new facilities, And this is where we saw the huge rental rate drop was they needed to fill up. You have limited demand, so price became everything. And the reats really drove this and they were just crashing rates. We have facility in one of our markets that the rate drop was 60%. Like crazy. We've never seen anything like it. I don't know who's underwriting that. Yeah. It was Wyatt. Like nothing you should ever expect. Crazy. And so when you look at that period, that's what they were doing. They were filling up at all costs, but they also understood there's a difference between street rates and in place rates. What I mean by that, everybody. This is really important to understand today and it's really important to see exactly where we're at. The reats found that I could sell a 10 by 10 for $50. It may have been 150 six months prior, but I can sell it for 50, all get all the move ends. And then I'm just going to double triple rates over the next year because while people are price sensitive to moving in, they are way less sensitive to price once they're in that actual economics change because it's so expensive and so difficult to move out that they were making a decision that was a difference of 20 bucks between facilities when they moved in, but they're not going to turn around and move out for a $20, $50 difference. So the reats were dropping these rates to nothing. People were moving in and then they were jacking them up. And that is why we saw rate drop like we'd never seen it before. That's why when we had 23, I think it was across the board. It was like a 20% rate drop never happened before. During 2008, it was like 7%. That was like the biggest drop we saw. So why? But it was because of that new function drive that all started to really end in 2025 by end what I mean is the rate drops weren't significant. They weren't nearly as broad base. We actually saw stabilization of occupancy and rents. So we'd hit the floor, we'd hit the stabilization point in 2025. Moving into 2026, we saw rates go up and occupancy not majorly. And this is on average. Some markets had larger rate increases. Others rates continued to decline that all depended on supply. Hey, podcasts listeners. Our goal at self storage income is to give as much value and resources to the self storage community and those looking to get in as possible. And one of the ways that we do this is through our self storage income community. So you may not know, but I wrote a book that's hard to even call this a book. I mean, this is a man we're talking air 100 plus pages, which include all sorts of information about how we have been in the self storage industry. It's everything from how we got our first deals to scaling to buying deals in today's market. What's changed and what remains the same. This is an up to date book that shows you how the market has changed and how you can win today. This isn't simple. This is how you buy a deal. No, this goes into everything, including how you scale and create a self storage business. You can get a physical copy and ebook or the audio book plus pre access to bonus content at the end of each chapter. You can get it today. It's available on Amazon and other platforms in which you can follow the link. Now in 26 though off the backs of that stabilization, the biggest thing that we've seen is the drop in new supply. So right now it sits at 2% of current inventory. It's dropped by over 50% in the last two years. That trend that has been going on, we're still seeing leftovers still come out, but that trend overall is the market is absorbing new supply over the last three years. It's stabilizing, demand is getting better and it's getting an equilibrium. So we're seeing all of those things turn around. That continuation is what we've seen in 2026. We've given an average rental rate increase across our portfolio, 13 states or whatever. It's probably 9%, 10%. Is our average rental rate increase when you look at it? We didn't have that prior. So we're seeing now all those things not just stabilized but begin to turn around. Not big, not massive. It's not like people are going out and we're seeing on the market 8% rate increases. No, on average across the board in the United States, it's like 2% to 3% averaging out. Obviously, that's different depending on markets, but that's an average we see. So that's a turnaround and it's a flip, which that's all great. Those are all positive signs. But I think people believed in 2026, interest rates were going to drop and things would go crazy. And things would go crazy. It'd be great moving with start right. That did not pan out. And in fact, now they're looking, there may even be a chance that they raise rates. So that is the biggest, probably shift that we've seen in expectations between 2025 and 2026. And although we're seeing rates stabilize, occupancy stabilize, turnaround, self storage is getting way better. And that shift is continued. That lack of interest rates dropping. I think that kind of kept things from going nuts, but more importantly, isn't so much what happened is what happened in relationship to expectations. It almost seems like people are getting used to the volatility day to day. It seems like all these different decisions. And maybe it's just social media and stuff these days. But it just seems like every day there's this new direction, this new thing. And there's just so much volatility happening. And I think especially early on, people didn't work used to this level of volatility in a lot of ways, where maybe even if interest rates are still high, maybe there's like, cool, just another crazy day in the world we're living in. And I guess I'm going to have to move because I can't wait any longer. Or I guess I'm going to have to do this because I'm not X, Y, and Z. Or again, like you're talking about, I'm a believer that I think there's a lot of folks out there, whether it's the incomes, they're locked in at these amazing rates on their homes, they've got this expendable income, they need self storage. I think there's a level of end dynamic going on there as well. I mean, both just normal units and with the recreational and RV type units and some of that. Have you guys seen a shift because I know right after COVID, you'd mention this where in those years following, there was that huge influx of demand for those large units for like RVs and everybody's buying them. Everybody was buying them. Then it started to go down. Yes. Has that also been one of those stabilizing unit types and utilizations in the industry that you guys have seen? Absolutely. We've seen some more stabilization along those lines. RV sales, things like that, they haven't gone up. That's very much tied to interest rates. But also, I think they've stopped building a lot of that. We have seen that. It's the beginning of that recovery type, right? But the flip was really big. I think you're right. People determine that a lot of these things are the new normal, which is really good actually, because the biggest part of this story is acquisitions. When interest rates went up, acquisitions vanished. They vanished not because people didn't want to sell, but the bid-ask spread was astronomical. People wanted to sell like it was 3% to 2% interest rates and interest rates were at 8%. Nothing was transacting. They would list. They wouldn't sell. This is everything, despite what's going on, deals are now selling. Sellers are coming to the table. There's a lot of facilities that the owners are forced to sell, especially in the fill-up facilities, where they can't hold on anymore. They had an empty facility. It's not happening. They have to finance. They're not operators. They didn't want to be. They were going to flip it. A lot of the speculation, everything else like that, and we're getting amazing deals. How many people are out there needing to retire? You talked a lot of this about the average age of storage. 67. Yeah. Dude, that's crazy. It's crazy. There's so many opportunities out there again in that fragmented industry of sales storage for that acquisition to happen just because somebody's like, "Hey, dude, I've had this thing for 30 years. It's been my baby. I'm ready to dip out. Do the retirement thing." Everybody was holding off because they thought interest rates would drop. You had years of people holding off. I'm going to wait until interest rates come down, and then I'm going to sell it for an astronomical price. Over the last year, reality set in. That's not going to happen. That's what I can't sell this facility in Pasagula, Mississippi. it be for a four cap anymore. We're going to have to go. Right. Like one of these days. Exactly. One of us always want to be our example. But they're realizing that's not going to change. Yeah. And so over the last 12 months, that has been massive. We bought more in a six month period of time than we'd bought in the previous three years combined. Yeah. Yeah. And it's been a ton. And right now we are looking at basically doubling our portfolio size with deals. We have under contract coming in. If you look at like the SSI community, because we bring deals to our community, our communities buying. We're bringing deals to the table. They're buying. We're buying at six to eight caps. No, like people are transacting. And why this is so important? Because during these times, when you have this period of interest rates that are hitting that extrinsic value, your basis and the deal that you're getting is a good deal. It's not like you're buying it at a four cap. And it only works if market rates go up. Right. Today, we're at the bottom of a trough on the internal side, meaning the rates what you can charge. That's all coming up now. Now occupancy is going up. Rates are going up, but yet because of interest rates, the valuations are still historically way down. We had a four year timeframe, 2010, 11, 12, even 13. We were gobbling up everything we could, right? Now when I say that, let me be very clear. This is not, we didn't have 2008 economically. It's not similar at all. That's not at all what I'm saying. I'm saying on a valuation of acquisition for storage, we're getting deals that are similar to that change in valuation opportunities. Great deals. Yeah. There's a lot of opportunities out there. Now it's the difference in opportunities from then versus now was everything was an opportunity. It didn't even matter. Right? Today what we're saying is you have to be more careful due to supply. Right? So we're at the bottom of the trough. The trough's coming up. It's changing, but it's uneven based upon markets. So you do need to be careful with the sillities new supply. It's you got to look into it and make sure that that market's good, that it is turning around. But all our deals were buying, you know, we're buying it below replacement cost. And in some instances, we're buying 40% below replacement cost on brand new facilities that are like the nicest assets we've ever purchased. In lease of. In lease of like so much icing on the cake, man. Yeah, we bought like probably half a million square feet in lease up. Yeah. Are incredible. It's amazing. Our community, they're buying mom and pop facilities primarily. You're dealing with facilities that are a million to three million or five hundred thousand. We've had multiple deals that our community members have bought it 300,000, 500,000, 600,000, four, you know, all around there. Mom and pop facilities that have no management, no nothing. They're just sitting there. They're coming in, turning these things around and because they're buying them at a high cap rate, that cash flow is exploding and it's creating tremendous amount of equity and value. Yeah. No, I was just talking to one of our guys the other day. He'd scooped up a portfolio this year because he was looking at a property in a certain area. And he was like, oh, that's interesting. Let me look at some of these other properties and come to find out a number of these other facilities in that area and in that market were same, same thing. Like mom and pop ownership, I think one person owned like three of them and the other person owned like two or three. So he's able to go up and scoop up like these primary facilities with some satellite locations. Do this roll up portfolio. Now commands a healthy portion of the market there as far as market share goes, which is incredible from a rate management standpoint when you're talking street rates and new supply coming in. But these facilities, he can cash flow at like, he's cash flowing right now. Well, this is actually there's two different ones. So those facilities, they're in lease up a little bit. They've got some things you still have to work out, but total just operational turnaround. Got another guy came in purchase a lease up facility. It's it like 50% occupancy and cash flows cash flows at 50% occupancy. And he has another 20, 30% more that he can just throw on top of that and be a freaking golden. So just again, another mom and pop owner scenario. That same guy that did the roll up, he just got one under contract this last week. It's a larger deal. That's like an 8 million deal. But still just, I mean, there's so much opportunity and there's almost every one of the scenarios is the same. You know, it's just somebody's retiring, somebody's offloading an asset. Yep. It's another question you get a lot of times where I think people are skeptical when somebody's selling. They're like, why would you ever sell a facility that cash flows at 50% occupancy? Like you're just, yeah, print money. It's like, well, because these people have other other interests, they have life events, they have, I mean, they're just sick of having to deal with something that maybe they don't even know how to share that all the time. Like they literally don't want to do it anymore. Yeah, they're just done. Yeah. And they want to offload it. They cash their chips in. They've got a refinance coming up. Yeah. There are a lot of people are reinvesting into their businesses that they own, allocating into different asset classes. We're seeing a shuffling of the cards right now. We're seeing this with big operators, small operators, small and pops where people are with this big change, they're reevaluating. Do I want to do this? Do I need money? Am I putting it into the market and am I putting it into my business? A new asset class. Am I tired of doing this? A lot of them have been doing it for three years. They're not seeing big change. They're looking at the environment. They're going, do I really want to do this? They want to wait around two, three more years. And then that becomes an opportunity cost for them for doing other things. So then they sell it, right? This is common. And especially when we see these transitionary periods, the deck is getting shuffled. Assets are moving around. One person's, you know, I think we look at this too many times, especially when you're just starting out, especially beginners. You want the first deal you have one as it is a zero sum game. I win, you lose. That's not true at all. From like a buyer sale. Yeah. From a buyer sale standpoint. When you look at the deals that are being done, even if they're taking less money, for them, it's still maybe a great opportunity. It may save them money. They have somewhere to put it, something to do. They can reshift focus. There's a reason why they're selling. And so it isn't a zero sum game. That probably the biggest opportunity though that we see today is seller financing. Yeah. We're seller financing currently. We just did a deal for I think eight million where the seller was the bank. They came and held the debt. We put way less down. We're into it way less. They're the bank. We're holding it for five plus years fixed four percent. And we're buying another one right now where the seller is going to be financing. The members of our community, we go and we look through it. It's like, yeah, I got seller financing. I got seller financing because what happens is when interest rates go up like that, it becomes harder for the owners to sell the money. But two, the owners have a problem when they sell. I got to pay all these taxes. I've got to figure out what to do with the money. I need to sell. I don't want to do this anymore. But there's also there's other things you got to deal with. So instead they're coming in saying, I get that down payment. I get some of the money up front. I get it out. Then I'm getting paid on my money plus interest. I'm getting interest on my money that's sitting there every single month. And then at the end, I'll get all of it. I'm taking that tax hit and I'm spreading it out. Yet I'm still getting money out and I'm still doing something. It solves a lot of problems with it. So when interest rates are really low, prices are just so high, they don't care. Right? It's like, no, because I'm getting paid so much. And banks are actually lending. And banks are lending. So this way they solve those problems and they get a seller finance. So then you can find good deals at great cap rates, good valuations, good upside. And have seller financing. Right. Now those are the opportunities and times like this. But the danger then becomes making sure you're doing the basics and the fundamentals right. Yes. Like demand, demand, demand, demand. You know what she's telling somebody this the other day. Because one of my themes through everything is no silver bullets. And it doesn't matter what you're doing. Like there's truly not a silver bullet to anything. It is just consistency, the fundamentals over and over and over again, the boring mundane tasks that you're going to do each day of staying consistent, doing those things over time. That is what it and again, that key piece of over time, that compounds. And we see it all the time where it's like we've got somebody in the community. that's like, oh, you know, well, if I do this rate management or I do this change, it's only like an extra $1,200 a month. So like, I don't know if it's even worth it. And then you look at that over a year and then you look at that value on a cap rate. And you're like, oh, I don't know, is that worth like $200,000? - Yeah. - Yeah. - Uh-huh. - I would say. (laughs) It's just amazing. 'Cause it is. - Like not a monumental, like you're not doing some crazy like, rain man strategy thing. You're just like, oh yeah, maybe I just fundamentally-- - Fundamentally consistent. - $200 on this thing every month. - And then that compounds monthly over time. Then you all sudden the market gives you value. And when I say the market gives you value, the market can give you value by cap rates coming down. By market rents just going up that you didn't underwrite for. And that stuff compounds in a way that's hard to explain. - Yeah. - Until you've been through that cycle and seen it, it was shocking to see what happened with assets that we bought over time and how that, the small things as they added up, the value creation was incredible. - Yeah. - That's amazing to see. - And then you layer in rate increases and everything on top of all of that. And it acts as a leverage, right? Five percent rental rate increase on the whole is a really big thing. And then you get five, eight percent the next year. And over time what seems small maybe that first year, four years is hundreds of thousands if not millions of dollars. - Yeah, no, it's totally crazy. Something I should clarify too. I said when I said something about banks actually lending, I didn't mean that banks aren't lending at all today. It just, it makes it harder when interest rates are higher to make those prices make sense, or those valuations make sense. So a lot of times a seller doesn't want to sell for less than what they had in their mind. Let's say in the bank obviously isn't going to land on something that, you know, on an asking price that's X, Y, or Z to where they're not going to cover, the debt service coverage ratio is going to be over a certain percentage, which is generally like 1.25 is what they typically look at. But also done, banks are lending. It's just hard to get that again, going back to the ask sale price, discrepancy. - Banks are actually your best friend right now because you can go to a seller who's like, dude, I want a five cap. You're like, I'd love to pay you that. Here's what the banks are. But there's no way a bank is going to land. So nobody can sell it. So you have to sell it at this amount. - For sure. - And I think that's what's happened over the last three years. They were used to free money, crazy high prices. And it took them going to market, being told no by the market. People not being able to get funding for it to go, we have to come back down to earth price because we cannot sell this if we don't. And the banks are the real driving part of that. So they're not going to give any money out of four cap and pass a good little Mississippi. So they can't sell it for that. And so all of a sudden, you're like, I would love to give it to you. This is what it can actually trade for. And when you say, this is the only thing in the bank will finance, too, you say, everybody's going to have pretty much this problem. Unless you're dealing with assets that are in re territory, but even then, reeds aren't coming in and paying crazy prices. Like groups aren't. Because there's no reason to why. You don't need to today. And then you insert your seller finance option. Exactly. There you go. You want a little more? Well, then you carry the note, right? That's our three offer strategy, which you can go watch a YouTube video on that on how to present that, how we do that. But I think one of the things that we got to hit on here, because we mentioned at the first is the reeds. And what the reeds are doing in the bond market, no? Yes, in the bond market that is so telling to how this is going to play out and what this will look like over the next two years. I did a full breakdown on a YouTube video on this. You guys can check that out. But what we've seen this year, what the reeds doing was actually shocking. The reeds went out and what it showed us is the reeds are not waiting. They don't believe interest rates are coming down. They didn't wait this year. Public storage went out and got hundreds of millions and locked in at 5% for like a decade. There's no way that you would do that if you believed, oh, we're gonna do this, but by fall rates are gonna come down. And then what they're doing is they're taking that money and you think, oh, they're just going out and buying. No, they are a net lender. So the reeds are now lending to storage owners. And they're getting the spread between their money and what they can charge. But this is even more important. The reeds primary mode of acquisition was third party management. Third party management that created an acquisition trough. What they're doing today is they are lending bridge type loans to distressed assets and assets that are struggling because they know they're gonna end up with it. So they are lending to own. And they went out and got ridiculous amounts of money to do this and locked in at 5%. They're going out lending this money to people that for the most part, I think they believe will not be able to pay it back at a refinance in a year. And they're gonna end up owning it. And we've seen what extra space did. Extra space, short up all of their floating interest rates. They short up and locked in. That shows that extra space and they did it for over the next two years. Believes extra space is currently in the position where they believe interest rates are also not gonna go lower in the short term. So you have these major reeds that are making actions and doing things that are signaling over the next two years. We do not believe rates are gonna be significantly lower. Now I believe they think they'll be lower but not significantly. The bond market shows this because we have a very much quasi beginning inverted yield curve. All that means is that short term rates are going up, right? And long term rates were saying, depends on the day, the YouTube video we have it all broken down as of that date. But the short term rates are going up, long term rates are coming down and really we have this two year path. So people believe fundamentally that interest rates, the outlook is that they'll go down but it is gonna be very little, right? And that the actual rate drops are coming after 2027. That's when the rate drops are really gonna happen. That surprised a lot of people. That surprised me. Even when we outlined it in 2021 and 2022, we had 2025 being the transition year. Then 26 things starting to get good and then 27 being really good, 2829 being kind of blowing up. That what seems to happen is we've all been pushed out a year, year and a half that time frame. Why that though is a good thing, okay? So on one side, it's a bad thing. Who's it bad for? If you have to refinance, if you have to sell. But if you're in acquisition mode, that's really good because it gives you time. If you remember, interest rates dropping makes prices go way up, right? So if you are in acquisition mode, if you wanna be buying the next two years, you know, we believe that there's gonna be a good acquisition pipeline to get good solid deals at a good basis. And now while that will get less over time, by less, I mean, over time prices will go up. I think in 2027, we will see prices of storage facilities go up, but it's not going to be crazy anything else like that. Now towards the end of 2027, right? And into 2028, things will really start to change. But those interest rates are creating an open door to buy assets that will create generational wealth just on that spread alone. Not to mention what happens when you go out and have years of lower and lower and lower supply. And they're rebalancing, supply demand is rebalancing at interest rates that are 78%. When interest rates change, that is so inverted. All of a sudden now you're so short supply 'cause there's been years of lower supply that rates and occupancies explode. This is exactly what happened after 2008. This is what's happened in other real estate trends. This is how it works. Supply though, just can't come back online. So let's say now we're in 26 and 27. Ended 27 rates start coming down, interest rates. Then rental rates start to rise and we start to get meaningful rise occupancy goes up and somebody goes, oh, I want to develop. They start in 28. They're not opening till 2030. So what that means is the supply can shut down immediately after the excess supply has been absorbed. We're just not going to do the project. But to turn a project on and have new supply and the market that takes years. So that creates this gap in the market, a demand gap. On the one side, we had the gap that was the opposite over supplied, right? Back in 2018 to 2022. Now you run into the other problem. We have the rebalancing and then under supplied. So we still have a two year timeframe of acquisitions. The best acquisitions we still believe are, you know, before probably mid-2027. We are ramping up buying as much as we can. I cannot express enough how much we are trying to buy right now and want to get. The one thing I wish I could have gone back to 2029 and 11 is just, I wish I would have bought more. I'm not going to make that mistake, right? We're all in. We're buying great deals at great basis, long-term investments. We're not short-term, right? We're building out our portfolio. We're leveraging right all those kind of things. Now this is why it's a catch 22 though. And you have to understand the opportunity is there because of the struggles. We still have assets that are struggling, right? We still have markets that are struggling, but that's the very reason why the opportunity is there. This is why it's important that in real estate, you don't play short-term games. It just happens to be we are now on the right side of the cycle that actually is like wind in your cells as opposed to being the opposite where we were in 2022. That was the opposite. Those were headwinds coming at us. And those are things we don't control. I can't control them. Nobody can control them. It's just the cherry on the top when you are doing a good solid deal, you have a good basis, have good cash flow. And then the winds at your cells, it just expands those returns. It expands those values. I don't buy betting that the markets are gonna change, but you buy a good deal that whether the market changes or not is a good deal. And then when the market gets good, a great, you know, that really good deal turned out to be a killer deal. - Right, you buy those 50% occupied facilities that cash will take cash from it. Like, dude, that's crazy to an answer. - I need some more, I need some more of those in my life. - Yeah, I need to get that guy, like figure out how he found that thing. But no, incredible outlook, man. Incredible outlook. And you know, it's funny. I'm looking back at all the podcasts that we've done, talking about like, it's time to get in, it's time to get in. And it's amazing to me because it's always been an amazing time ever since we started doing this podcast. It was a great time to get in his storage. - Yeah. - Same goes today, man. Every day, every month, every year, it's always been a great time, but it's just understanding those market dynamics, being hard to kill, planning accordingly, planning for the long term. All these things that you just talked about, that are gonna make it or break it. But it's always a great time. And man, if you're listening to this podcast, if you're interested in storage, do not hesitate. You, I mean, you've got this two year, amazing time frame that we're looking at what we're talking about here. Get out there, talk to the brokers, talk to the owners, go direct to those owners, talk to them, meet up with people in the industry, make some freaking moves over the next week, over the next month, underwrite some deals, talk to your connections, whatever it is, look at different markets and start executing. Like, don't sleep on this. - Especially the people, I mean, what has changed in the last four years? Like, you could find great deals, you could do it, it's just gotten so much better. Which is so much fun for us. Like, there's a few hard years, right? And it's like, now it's like, oh, this is getting better, it's getting easier. It's getting good. And you're like, it's, I'm speaking from like, to though I get excited about this, because once again, being through the cycles and everything, I remember, and I remember the outcome. Like, you know, when we were buying during that time, that was really scary. A lot of people are like, oh, I wish I could go back in 2010, right? But in 2010, when we were buying, it was really scary. - Yeah, talking about knowing certain things. - Yeah, we focused on the individual deal, like we're saying, just made sure it was a good deal. But honestly, we thought it made take a decade at that point for markets to recover, because it was so bad. And nobody was buying, right? Everything else. But that is how the opportunities are presented. So like, there's never gonna be a time where there's not uncertainty that will never occur. That's why you focus on that deal basis. But there is a time where the markets have shifted, and you are on either an upside cycle or a downside cycle. And now is where at the bottom of that trough, we've already seen the market show us, not just guessing, right? This isn't guessing. It's like, no, the market show us it's turned from rates and occupancy dropping to rates stabilizing, rates start to come up, and occupancy start to come up deals transacting at lower basis, meaning you're getting better buys and supply being down. Those things are already occurring. They've already occurred. It doesn't take out any of the risk of buying a bad deal. It doesn't take out risks of buying in a bad market. That never happens. It doesn't matter what time of the cycle is, right? But it does change the outlook on the future and the wins in your sales, and it makes those good deals amazing in the future. - How to percent, man. I love it. If you guys enjoyed this episode, please leave us a comment, leave us a review, give us a like, all those things, helps us out a ton. We really, really enjoyed doing this stuff for you guys. but get at us, leave those things for us and we'll catch you guys on the next one. Appreciate you.