Off-Market Self Storage Sales: Pros, Cons, and the True Cost
Key Takeaways
- Off-market deals account for a significant portion of self storage transactions, but they carry hidden costs most sellers don’t fully understand
- Data suggests off-market sales typically close at 5%–15% below what a properly marketed process would achieve
- Off-market can make sense in specific situations: operator-to-operator deals, facilities with significant issues, or when privacy is paramount
- For assets valued at $3M+, the potential upside from a marketed process almost always outweighs the perceived benefits of going off-market
- The hybrid approach — targeted, confidential marketing to qualified buyers — captures the best of both worlds
- A well-prepared Offering Memorandum (OM) is the foundation of any successful marketed sale process
Introduction: The Allure of Selling Quietly
We get it. The idea of selling your self storage facility without the world knowing about it is appealing. No disruption to your tenants or employees. No competitors finding out. No tire-kickers wasting your time. Just a clean, quiet transaction with a handshake and a wire transfer.
And sometimes, that’s exactly the right approach.
But here’s what we’ve learned after brokering hundreds of self storage transactions: the off-market path costs most sellers real money. Not always. Not in every situation. But often enough that every owner considering a sale deserves to understand the full picture before choosing their approach.
This isn’t a sales pitch for our services. It’s an honest look at the off-market vs. marketed debate — the pros, the cons, and the true cost of each approach — so you can make the decision that’s right for your specific situation.
What “Off-Market” Actually Means in Self Storage
The term “off-market” gets used loosely, so let’s define it clearly.
An off-market sale is any transaction where the property is sold without broad market exposure. This can take several forms:
- Direct approach from a buyer: A REIT, PE fund, or neighboring operator contacts you directly with an offer
- Seller-initiated private outreach: You reach out to one or a few potential buyers yourself
- Whisper listing: A broker quietly shops the deal to a handful of contacts without formal marketing
- Operator-to-operator deal: You sell to someone you already know in the business
What off-market does not mean:
- It doesn’t mean the deal is secret (buyers talk to each other, lenders share information, word gets around)
- It doesn’t mean it’s faster (many off-market deals drag on because there’s no competitive pressure)
- It doesn’t mean you’re getting a “fair” price (fair according to whom? Without competitive bids, you’re trusting one party’s assessment)
Why Sellers Choose Off-Market
There are legitimate reasons why self storage owners pursue off-market sales. Here are the most common:
1. Privacy and Confidentiality
You don’t want your employees, tenants, or competitors to know the facility is for sale. This is the most frequently cited reason, and it’s valid — particularly for smaller operations where staff turnover during a sale could disrupt operations.
2. Speed and Simplicity
You want to avoid the time and complexity of a full marketing process. An off-market deal can potentially close in 45–60 days from initial conversation. A marketed process typically takes 90–120 days from engagement to close.
3. Avoiding Disruption
You’re concerned about the impact of due diligence — property tours, inspections, multiple buyer visits — on your business operations and tenant experience.
4. You Already Have a Buyer
Someone has approached you with an offer that seems reasonable, and you’d rather take a sure thing than go through a process with uncertain outcomes.
5. Testing the Waters
You’re not sure you want to sell, but you’re willing to entertain offers. Going off-market lets you explore without commitment.
6. Relationship-Based Deal
You’re selling to someone you know — a neighboring operator, a friend in the business, a local investor. The relationship adds a layer of trust and simplicity.
Each of these reasons makes sense on its own. The question is whether the benefits outweigh the costs — and for most sellers of meaningful assets, they don’t.
The Hidden Cost: What Off-Market Really Costs You
Here’s the part that doesn’t get discussed enough: off-market deals almost always leave money on the table.
The Data
Based on our experience and industry transaction data, off-market self storage deals typically close at 5%–15% below what a properly marketed process would achieve for the same asset. Here’s why:
On a $5 million facility:
- 5% discount = $250,000 left on the table
- 10% discount = $500,000 left on the table
- 15% discount = $750,000 left on the table
On a $10 million facility:
- 5% discount = $500,000 left on the table
- 10% discount = $1,000,000 left on the table
- 15% discount = $1,500,000 left on the table
These aren’t theoretical numbers. They represent the difference we’ve seen between initial off-market offers and final marketed sale prices on comparable assets.
Why Off-Market Underperforms
1. No competitive tension. This is the single biggest factor. When a buyer knows they’re the only party at the table, they have zero incentive to pay top dollar. They know you can’t say “we have another offer at X.” Competitive bidding isn’t about creating a circus — it’s about ensuring you receive a price that reflects true market value.
2. Information asymmetry. Sophisticated buyers — especially institutional ones — have access to market data, comparable transactions, and valuation models that most individual owners don’t. In an off-market deal, the buyer almost always has better information than the seller. In a marketed process, the broker levels the playing field.
3. The anchoring problem. In an off-market deal, the buyer typically makes the first offer. That number becomes the anchor for all subsequent negotiation. Even if you negotiate up 5%–10% from their initial offer, you may still be well below what the market would bear. In a marketed process, the seller’s asking price (or the competitive bidding itself) sets the anchor.
4. No FOMO. Fear of missing out is a real and powerful force in self storage acquisitions. When institutional buyers know that multiple parties are evaluating an opportunity, they bid more aggressively. In an off-market deal, there’s no urgency. The buyer can take their time, negotiate hard, and walk away without consequence.
5. You don’t know what you don’t know. The hardest part about off-market sales is that you’ll never know what you left on the table. If someone offers you $5 million and you accept, you’ll never know that a marketed process might have yielded $5.5 million or $6 million. The counterfactual is invisible.
When Off-Market Actually Makes Sense
We want to be fair here. Off-market isn’t always the wrong choice. There are specific situations where it can be the right approach:
1. You Already Have a Buyer at a Genuinely Fair Price
If an institutional buyer has approached you with an offer that your broker independently confirms reflects market value — and you’ve verified this through comps and valuation analysis — then accepting that offer without a full marketing process can be reasonable. The key is independent verification. Don’t rely on the buyer’s opinion of what’s fair.
2. Your Facility Has Significant Issues
If your facility has environmental problems, title issues, deferred maintenance, below-market occupancy, or other challenges that would be difficult to present well in a marketed offering, a targeted off-market approach to buyers who specialize in distressed or value-add acquisitions may be more effective than broad marketing.
3. The Deal Is Small
For transactions under $1.5 million–$2 million, the economics of a full marketed process are harder to justify. The buyer pool is smaller (mostly local investors), and the incremental value from competitive bidding may not offset the time and cost. That said, even smaller deals benefit from some level of competitive exposure.
4. Operator-to-Operator, and the Relationship Matters
If you’re selling to a neighboring operator you’ve known for 20 years, and the relationship is as important as the price, off-market can make sense. Just make sure you still get a third-party valuation so you’re making an informed decision.
5. Time Is Truly Critical
In situations like serious illness, partnership disputes, or financial distress where speed genuinely overrides price optimization, accepting an off-market offer from a credible buyer with verified proof of funds can be the right call.
When You Need a Marketed Process
For assets valued at $3 million or more, we believe a marketed process is almost always worth the additional time and effort. Here’s when it’s essentially mandatory:
- Institutional-quality assets — Any facility that would attract REIT or PE buyer interest deserves competitive bidding
- Portfolio sales — Multiple facilities should always be marketed to capture portfolio premium
- Strong-market facilities — If your facility is in a high-demand market, you need to expose it to the widest possible buyer pool
- Estate or partnership sales — When fiduciary duty is involved, you need to demonstrate that you achieved market value
- Any time you want top dollar — If maximizing price is your priority, competitive tension is non-negotiable
The Hybrid Approach: Targeted Marketing with Confidentiality
Here’s what most owners don’t realize: you don’t have to choose between off-market privacy and marketed pricing.
The best self storage brokers use a hybrid approach — targeted, confidential marketing to a curated list of qualified buyers. This is fundamentally different from either:
- Posting your facility on LoopNet for the world to see (what many people think of as “marketed”), or
- Selling to the first buyer who knocks on your door (true off-market)
How the Hybrid Approach Works
Step 1: Confidential preparation. Your broker prepares a detailed Offering Memorandum (OM) and financial package without any public marketing. Your facility name and location are not disclosed in initial outreach.
Step 2: Targeted buyer identification. Your broker identifies 50–200+ qualified buyers — REITs, PE funds, regional operators, 1031 exchange buyers, and other active acquirers — who are specifically looking for facilities like yours.
Step 3: Confidential outreach. Prospective buyers receive a “teaser” with key metrics (size, occupancy, revenue range, general market) but no identifying information. Interested buyers sign a Confidentiality Agreement (CA) before receiving the OM.
Step 4: Controlled process. Qualified, CA-signed buyers receive the full OM and are given a defined timeline to submit offers. This creates competitive tension while maintaining confidentiality.
Step 5: Negotiation and close. Your broker manages the offer process, negotiates on your behalf, and drives toward the best possible outcome — balancing price, terms, and certainty of close.
The result: you get the competitive pricing of a marketed process with the confidentiality of an off-market deal. Your employees don’t know. Your tenants don’t know. Your competitors don’t know. But 100+ qualified buyers have had the opportunity to compete for your facility.
The Offering Memorandum: Why It Matters More Than You Think
Whether you go off-market, fully marketed, or hybrid, the Offering Memorandum (OM) is the single most important document in any self storage sale. It’s the buyer’s first detailed look at your facility, and it shapes their perception of value from the very first page.
What Goes in a Self Storage OM
A comprehensive OM typically includes:
- Executive summary — Key highlights, investment thesis, and asking price or pricing guidance
- Property overview — Location, size, unit mix, construction type, age, amenities, and photos
- Financial summary — Trailing 12-month (T-12) income and expenses, historical financials (3–5 years), rent roll, and projected pro forma
- Market analysis — Demographics, supply/demand dynamics, competition, and growth trends for the local market
- Upside narrative — Specific, credible opportunities for the buyer to increase NOI (rate increases, occupancy gains, expense reductions, expansion potential)
- Operational details — Management structure, staffing, technology, and any third-party contracts
- Site plan and unit mix — Detailed breakdown of unit sizes, types, and rental rates
- Photos and aerials — Professional photography, drone footage, and satellite imagery
Why It Matters
A well-prepared OM does several critical things:
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Controls the narrative. You want buyers to see your facility through the lens you choose — highlighting strengths, contextualizing weaknesses, and painting a clear picture of upside potential.
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Reduces due diligence friction. When buyers have comprehensive, well-organized information upfront, they can underwrite more quickly, submit stronger offers, and close faster.
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Justifies pricing. The OM is where you make the case for your asking price. Without it, buyers make their own assumptions — and their assumptions will always be more conservative than your reality.
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Creates professionalism. A polished, data-driven OM signals that this is a serious process with a professional broker behind it. This attracts serious buyers and filters out tire-kickers.
We’ve seen firsthand how the quality of the OM directly impacts offer prices. A poorly prepared OM — or no OM at all — can leave 5%–10% on the table simply because buyers couldn’t fully appreciate the asset’s value.
The Bottom Line: Be Honest With Yourself About What You’re Optimizing For
Choosing between off-market and marketed isn’t about one approach being universally right or wrong. It’s about understanding the tradeoffs and being honest with yourself about your priorities.
If your top priority is:
- Maximum price → Marketed or hybrid process
- Maximum speed → Off-market (but verify the price independently)
- Maximum privacy → Hybrid process (targeted marketing with confidentiality protections)
- Minimum effort → Off-market (but expect to leave money on the table)
- Fiduciary responsibility → Marketed process (you need to demonstrate market pricing)
The most common mistake we see is owners who optimize for convenience when they should be optimizing for price. The difference between an off-market sale and a well-run marketed process on a $5 million facility can easily be $250,000–$750,000. That’s not a rounding error — it’s real, life-changing money.
The Right Approach for Your Facility
We specialize in targeted, confidential marketing that creates competitive tension without broadcasting your sale. Our process protects your privacy while ensuring your facility gets exposure to every qualified buyer who should see it.
But we’re not here to tell you what to do. If you’re considering selling and you’re not sure whether off-market or marketed is the right approach, let’s talk it through. We’ll share our honest assessment of your situation — and if off-market truly is the right path for you, we’ll tell you that too.
[Let’s Discuss the Right Approach →]