Self Storage PDF
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The Big Financial Picture
Self-storage retains its advantages, bright future
By Michael Parham
11/1/2000
Table 1: Financial Model
A. Statement of Cashflow
Gross Annual Rents
Other Income
Total Gross Annual Income
Vacancy/Collect Loss
Effective Gross Income
Operating Expenses
Net Operating Income
Debt Service
Before-Tax Cashflow
Annual
$450,000
$22,500
$472,500
($47,250 )
$425,250
($140,000 )
$285,250
($167,489 )
$117,761
Annual $/SF
$9.00
$0.45
$9.45
($0.95 )
$8.51
($2.80 )
$5.71
($3.35 )
$2.36
Monthly
$37,500
$1,875
$39,375
($3,938 )
$35,438
($11,667 )
$23,771
($13,957 )
$9,813
Monthly $/SF
$.75
$.04
$.79
($.08 )
$.71
($.23 )
$.48
($.28 )
$.20
B. Statement of Development Cost Annual
Land
Construction Cost & Security
Architecture/Engineering
Permits/Fees
Testing/Surveys
Legal Expense
Builder's Risk Insurance
Advertising/Marketing
Office Equipment & Furnishing
Closing Cost
Interest/Lease Carry
Total
Annual
$353,925
$1,349,400
$37,500
$15,000
$12,500
$10,000
$2,250
$35,000
$10,000
$37,500
$125,000
$1,988,075
$/SF
$6.82
$26.00
$.72
$.29
$.24
$.19
$.04
$.67
$.19
$.72
$2.50
$38.31
C. Project Specifications
Gross Buiding SF
Net Leasable SF
Office/Apartment SF
Land Coverage/Gross
Land Area in Acres
Land Area in SF
Land Cost per Acre
Land Cost per SF
Annual
51,900
50,000
1,900
SF 45.91%
2.5
108,900
$141,570
$3.25
D. Development Financial Variables
Other Income %
Vacancy/Collection Loss %
Gross Rents/Net SF/Month
Interest Rate
Loan Amount
Equity Required
Amortization Period (25 years)
Payments per Year
Operating Expenses/Net SF
Annual
5%
10%
$.75
10%
$1,590,460
$397,615
360
12
$2.80
Annual $/SF
$9.00
80%
20%
E. Development Financials
Capitalized Gross Rents
Capitalization Rate
Current Market Value/Gross SF
Break-Even Ratio
Loan-to-Value Ratio
Post Lease-Up Return on Equity
Debt Service/Period (With Principle)
$2,852,500
10%
$54.96
65.08%
55.76%
29.6%
$13,957.42
Self-storage retains its advantages, bright future
By Michael Parham
11/1/2000
Table 1: Financial Model
A. Statement of Cashflow
Gross Annual Rents
Other Income
Total Gross Annual Income
Vacancy/Collect Loss
Effective Gross Income
Operating Expenses
Net Operating Income
Debt Service
Before-Tax Cashflow
Annual
$450,000
$22,500
$472,500
($47,250 )
$425,250
($140,000 )
$285,250
($167,489 )
$117,761
Annual $/SF
$9.00
$0.45
$9.45
($0.95 )
$8.51
($2.80 )
$5.71
($3.35 )
$2.36
Monthly
$37,500
$1,875
$39,375
($3,938 )
$35,438
($11,667 )
$23,771
($13,957 )
$9,813
Monthly $/SF
$.75
$.04
$.79
($.08 )
$.71
($.23 )
$.48
($.28 )
$.20
B. Statement of Development Cost Annual
Land
Construction Cost & Security
Architecture/Engineering
Permits/Fees
Testing/Surveys
Legal Expense
Builder's Risk Insurance
Advertising/Marketing
Office Equipment & Furnishing
Closing Cost
Interest/Lease Carry
Total
Annual
$353,925
$1,349,400
$37,500
$15,000
$12,500
$10,000
$2,250
$35,000
$10,000
$37,500
$125,000
$1,988,075
$/SF
$6.82
$26.00
$.72
$.29
$.24
$.19
$.04
$.67
$.19
$.72
$2.50
$38.31
C. Project Specifications
Gross Buiding SF
Net Leasable SF
Office/Apartment SF
Land Coverage/Gross
Land Area in Acres
Land Area in SF
Land Cost per Acre
Land Cost per SF
Annual
51,900
50,000
1,900
SF 45.91%
2.5
108,900
$141,570
$3.25
D. Development Financial Variables
Other Income %
Vacancy/Collection Loss %
Gross Rents/Net SF/Month
Interest Rate
Loan Amount
Equity Required
Amortization Period (25 years)
Payments per Year
Operating Expenses/Net SF
Annual
5%
10%
$.75
10%
$1,590,460
$397,615
360
12
$2.80
Annual $/SF
$9.00
80%
20%
E. Development Financials
Capitalized Gross Rents
Capitalization Rate
Current Market Value/Gross SF
Break-Even Ratio
Loan-to-Value Ratio
Post Lease-Up Return on Equity
Debt Service/Period (With Principle)
$2,852,500
10%
$54.96
65.08%
55.76%
29.6%
$13,957.42
