In this episode of The AAA Storage Podcast, Paul Bennett unravels the current dynamics of the multifamily and self-storage markets. Fresh from the PassivePockets conference, Paul shares insights from thought leader Brian Burke on the real estate sector's trajectory through 2025. Explore the influence of the 2008 financial crisis patterns on today's market and discover why patience and strategic opportunities may define the real estate landscape for the coming years.

Key Highlights:
• Insights from Brian Burke's presentation at the PassivePockets conference.
• Exploration of the multifamily and self-storage sectors' current conditions and future outlook.
• Discussion on the differentiation between externally driven down cycles and self-inflicted industry changes.
• Examination of the ongoing opportunities in real estate amid broader market rebalancing.
• The significance of patience, liquidity, and strategic investments in the current market.

Quotes:
• "The market is not like the stock market—it doesn’t move as quickly. It’s more about the bottoming process than the bottom itself." – Paul Bennett
• "Developers as a group are not real smart; when conditions are good, we build too much." – Paul Bennett

Join Paul Bennett to discuss the dynamics of Growth Fund 2, a promising investment venture emerging from the success of Growth Fund 1. This episode dives into the strategic approach of moving from single property syndications to a well-structured fund model, providing a synthesis of expertise in self-storage and office industrial flex investments. Dive into the tactical deployment of capital, market trends, and the opportunities awaiting accredited investors looking to diversify and grow their equity through strategic real estate development.

Key Highlights:
• Transition from single property syndications to an efficient fund model capitalizing on market shifts.
• In-depth discussion on Growth Fund 2’s strategy focusing on merchant development and value creation.
• Insight into the geographic spread of investments, particularly in Texas and North Carolina markets.
• The importance of diversification with a portfolio encompassing both self-storage and office industrial flex projects.
• Due diligence processes ensuring minimal risk and optimal investor alignment.

Quotes
• "We're focused on developing from a ground-up standpoint, creating that value difference." – Paul Bennett
• "The efficiency benefits both investors and sponsors." – Paul Bennett

References
• AAA Storage Investments: aaastorageinvestments.com
• PassivePockets platform and conference information: passivepockets.com

For more details, contact Paul Bennett or Andrew Frowine through the AAA Storage Investments website.

In Episode 11 of the AAA Storage Podcast, host Paul Bennett discusses the current market turmoil and its implications for self-storage investing. Amidst recent fluctuations in the markets, they dive into how these changes impact alternative investments, particularly focusing on self-storage facilities. Paul brings his extensive experience to explore the risks and opportunities that arise in such uncertain times, offering insights into why self-storage remains a resilient investment choice.

Key Highlights
• Analysis of recent market volatility and its effects on investments.
• Discussion on the impact of trade policies and tariffs on self-storage.
• Explanation of the correlation between public markets and alternative investments.
• Insights into systematic risk versus market correlation.
• Paul Bennett's thoughts on investing for alpha versus beta.
• Importance of direct investment in real estate for portfolio diversification.

Quotes
• "The markets don't like uncertainty—what they don't like is uncertainty." – Paul Bennett
• "Systematic risk is a different animal; it directly impacts real estate in a traditional sense." – Paul Bennett
• "Our investments are not correlated to the public markets—they're tangible assets acting as inflation hedges." – Paul Bennett
• "You need to have an allocation in your portfolio that's direct into, I think, real estate." – Paul Bennett

In this enlightening episode of the AAA Storage podcast, Paul Bennett explores the nuanced world of self-storage investment with a focus on hyper-local market dynamics. We discuss the intricacies of supply and demand, emphasizing the importance of geographic specificity in self-storage performance. Tune in to discover essential strategies for evaluating local markets and the critical role of community engagement to enhance investor success.

Key Highlights:
• Definition and significance of hyper-local markets in self-storage investment.
• Examination of square footage per capita as a crucial metric and its variability across different markets.
• The impact of macroeconomic factors like interest rates on local self-storage demand.
• Importance of location in real estate versus its unique implications for self-storage.
• Strategic community engagement for enhancing market presence.
• The role of Google Ads and online searches in hyper-local marketing.

Quotes:
• "A hyperlocal market is simply a small, well-defined geographic area." – Paul Bennett
• "Our local managers are doing things like sponsoring the local little league... building relationships." – Paul Bennett
• "Google and online searches... have become critically important in the storage industry." – Paul Bennett

In this episode of the AAA Storage podcast, we explore how to navigate economic cycles within the self-storage industry, featuring insights from Paul Bennett. With expertise spanning several decades and economic downturns, Paul shares his experiences weathering financial storms from the 2008 crisis to the COVID-19 pandemic. Dive into the strategies that make self-storage a resilient asset class, even in tumultuous times, and the fundamentals that continue to offer long-term investment stability.

Key Highlights:

• Understanding the resilience of self-storage during economic shifts, including insights from the 2008 financial crisis and the COVID-19 pandemic.
• The impact of market correlation and alternative investments on self-storage performance.
• The strategic advantages of investing in non-metro self-storage facilities to avoid market saturation.
• Current market trends, including the effects of interest rates and new developments on self-storage demand.
• Strategies for self-storage investors during challenging economic times and upcoming market opportunities.

Quotes:

• "Self-storage has the lowest default rate of any type of real estate on the planet." – Paul Bennett
• "Buy when other people are selling; develop when other people are afraid." – Paul Bennett
• "The dynamics are consistent enough that what happens to a self-storage deal in a bad economy is that it simply takes longer to lease up." – Paul Bennett

In episode 8 of the AAA Storage Podcast, we explore the 2025 market outlook and dive into the world of passive real estate investing with special guest, Paul Shannon. Shannon, an accomplished real estate expert and co-host of the Passive Pockets podcast, shares his insights on the evolving landscape of passive investments and commercial real estate. Join hosts Brandon Giella and Paul Bennett as they discuss the challenges and opportunities in today's economic climate, offering listeners an in-depth understanding of real estate market trends and investment strategies.

Key Highlights

• Paul Shannon discusses his journey from active operator to passive investor, emphasizing diversification across asset classes, including self-storage and industrial assets.
• Insight into the growth of the private equity market, driven by the participation of high-net-worth individuals in alternative investments.
• Discussion on the importance of selecting trustworthy sponsors and operators when pursuing passive investments.
• Exploration of the current macroeconomic environment and its impact on real estate investments.
• Analysis of supply, demand, and the role of interest rates in shaping current investment opportunities.
• Advice on the significance of joining investment communities for networking and informed decision-making.

Quotes

• "A bad operator can mess up a good deal, but a great operator can turn a bad deal into an okay one." – Paul Shannon
• "Investing in real estate is about the collateral—you're looking for control and consistency." – Paul Shannon
• "Real estate market moves like a Ferris wheel, not like a roller coaster." – Paul Shannon

Resources

• Passive Pockets Community and Podcast: https://passivepockets.com/
• Market analysis by Jay Parsons, economist specializing in rental housing
• Capital markets updates by James Eng from Old Capital
• Economic insights from Greg Willett at RealPage
• General market trends and sentiment on MarketWatch: https://www.marketwatch.com/
• Investwise Collective Fund: Exploring fund-of-funds opportunities for diversified real estate investments.

In this episode of the AAA Storage podcast, Paul Bennett discusses the intricacies of the capital stack in real estate investing. He breaks down the components of senior debt, mezzanine debt, preferred equity, and common equity—discussing their risk profiles, returns, and why certain tranches might appeal to different investors. With decades of real estate experience, Paul provides actionable insights for seasoned and novice investors alike, making this episode essential for anyone looking to understand real estate financing.

Key Highlights:

• Explanation of the capital stack, including senior debt, mezzanine debt, preferred equity, and common equity.
• Discussion on how different tranches cater to varying risk appetites and investment goals.
• Insights on the importance of underwriting risk and market evaluation by sponsors.
• Paul Bennett's reflections on the evolution of financing in real estate from the 1980s to today.

Quotes:

• "Senior debt is in the most protected position of anybody in the capital stack." – Paul Bennett
• "Risk and return are inextricably linked." – Paul Bennett

In this episode of the AAA Storage Podcast, we discuss the intricate details of real estate investing, focusing on crucial financial metrics like Cap Rates, Yield on Cost, Development Spread, and Internal Rate of Return (IRR). With expert insights from Paul Bennett, we explore how these metrics help investors evaluate properties and predict potential returns. Whether you're a seasoned investor or looking to understand the fundamentals, this episode offers valuable guidance on navigating real estate investments with confidence.

Key Highlights

• Understanding Cap Rates: Learn how cap rates are used to evaluate property values and their influence on risk-adjusted returns.
• Yield on Cost Explained: Discover why yield on cost is vital for real estate developers and its impact on profitability projections.
• Development Spread Insight: Understand the relationship between yield on cost and market cap rates in assessing project returns.
• Internal Rate of Return: Explore how IRR serves as a key measure of an investment's potential growth for investors.
• Overcoming Project Challenges: Paul shares strategies to manage unforeseen project hurdles and maintain target returns.

Quotes

• "We begin with the end in mind—driven by the internal rates of return we can provide our investors." – Paul Bennett
• "Yield on cost and development spread point to the potential return of a project." – Paul Bennett
• "No projection will match reality; it's how you handle the challenges that matter." – Paul Bennett

In this episode of the AAA Storage Podcast, Paul Bennett and David Luce, the VP of Operations at AAA Storage, explore the intricate details of leasing and managing self-storage facilities—topics rarely uncovered in the industry. David explains the evolution of management practices over the past decade, the role of technology in operations, and provides a comparative look at leasing up new facilities versus managing mature ones. Listeners will gain a deeper understanding of self-storage investing and the strategic processes that drive success in this unique asset class.

Key Highlights:

• Industry Evolution: David Luce discusses the dramatic changes in self-storage management over the past 10 years, highlighting the shift from manual to all-digital operations.
• Lease-up vs. Maturity: Learn the differences in strategies for leasing up new facilities and managing high-occupancy, mature properties.
• Marketing Strategy: The importance of Google and grassroots marketing in attracting tenants to self-storage facilities.
• Remote Management: Insights into the growing trend of remote management and how AAA Storage balances technology with human presence.
• Investment Due Diligence: What potential investors should consider about a sponsor's property management capabilities.

Quotes:

• "Today, everything is done digitally, and that allows a degree of efficiency we couldn't have imagined 10 years ago." — David Luce
• "For lease-ups, your goal is to lease it up fast—it's all about that initial velocity." — David Luce
• "Grassroots marketing and strong curb appeal are vital—more than 50% of business comes from simple drive-by traffic." — David Luce

In this episode of the AAA Storage Podcast, Paul Bennett takes us through the significant value to be found in investing in office and industrial-flex real estate. Paul elaborates on the synergy between self-storage facilities and office industrial flex properties, highlighting the advantages these investments bring to a diversified portfolio. This episode offers a clear insight into the diversification benefits and financial dynamics of these real estate investments.

Key Highlights

• Explanation of what constitutes office industrial flex real estate.
• Synergy between self-storage and office industrial flex investments.
• Importance of diversification in mitigating investment risk.
• Current market trends and future outlook on office industrial flex properties.
• Differences in lease structures and tenant dynamics compared to self-storage.

Quotes

• "Adding a second property type to the fund gives you diversity across property types and markets." – Paul Bennett
• "The economic efficiency and value creation is very similar to storage." – Paul Bennett