A common misconception is that self-storage is primarily for personal items. In reality, 30-40% of demand comes from small businesses like contractors and pharmaceutical reps who use the units as low-cost, flexible warehousing. This dual demand driver (residential and commercial) makes the asset class uniquely resilient.
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Current real estate deliveries were financed in the 2020-22 low-rate era, causing a temporary supply glut in high-demand sectors like Sunbelt apartments. Since new construction halted in 2023, today's depressed prices offer a unique entry point before supply normalizes and rents can accelerate.
The REIT market transformed from four highly correlated sectors (office, industrial, retail, residential) to a diverse universe including data centers and towers. Secular risks like e-commerce mean subsectors no longer move in unison, demanding specialized analysis rather than general real estate knowledge.
During the 2008 financial crisis, self-storage assets proved highly defensive. The demand is driven by life events like death, divorce, and downsizing, which occur in any economic cycle. This contrasts with aspirational real estate (e.g., luxury retail, high-end office) that suffers when discretionary spending tightens.
Contrary to popular belief, community banks' CRE loans are not to large, vacant office towers. Their portfolios consist of local, stable properties like gas stations and small professional offices. This localized knowledge and asset type make their CRE exposure far less risky than that of larger banks.
ReSeed targets older, smaller properties in desirable, supply-constrained areas that large institutions overlook. By adding some capital and letting the neighborhood's inherent demand drive growth, they achieve strong returns without heavy lifting or large-scale development risk.
Unlike highly volatile sectors like chemicals, multifamily real estate is remarkably stable. Even during the largest supply wave in 40 years, the negative impact on net operating income was minimal, demonstrating a less risky way to play capital cycle dynamics.
To adapt to hybrid work and reduce overhead, Hard Numbers shares its office with another agency. One firm uses the space on Tuesdays and Thursdays, while the other takes Mondays, Wednesdays, and Fridays. This "timeshare" model is a practical real estate hack for companies no longer needing a five-day-a-week presence.
According to fund manager Bill Chen, the most significant valuation dislocations in the REIT sector currently exist in life sciences and cold storage. These sub-sectors, along with self-storage, present compelling opportunities based on high implied cap rates and low EV multiples.
Bob Moser's core investment thesis, developed in college, is to identify fragmented real estate sectors at the inflection point when large, institutional investors begin to consolidate them. This strategy allowed him to get in early on manufactured housing and self-storage before they became mainstream, capturing significant upside.
While rising rates caused a violent valuation drop in commercial real estate (CRE), they also choked off new development. This lack of new supply—a primary driver of winners and losers in CRE—creates a strong fundamental tailwind for 2026-2028, making the sector more stable than recent volatility suggests.
