Breaking Down my First Luxury Storage Deal (And What's Coming Next)
Ever heard of luxury storage condos?
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In 2019, I started my first luxury storage development.
Today, I‘m breaking down exactly how we scaled from a single development to where we are now — and give you a sneak peek at what's coming next.
First, let me clear something up: Luxury storage isn't about storing Porsches and art collections. These are professional, climate-controlled workspaces ranging from 700-1,200 square feet (and even up to 3,000 square feet for luxury condos…) that small business owners and entrepreneurs use as an affordable, flexible alternative to expensive commercial space.
Why I Like Luxury Storage Over Traditional Commercial Real Estate
The main advantage of luxury storage? Flexibility.
While traditional commercial leases lock you into long-term commitments, our spaces primarily operate on 30-day terms. This flexibility is huge for small businesses, especially in uncertain economic times.
Unlike traditional commercial spaces that often come with high build-out costs and extensive customization needs, our units are ready-to-use with the essential amenities businesses need — climate control, power, and in our larger units, we even have office space and bathrooms. Not exactly the storage units you’re used to, right?
Plus, luxury storage gives businesses room to grow. A company might start in one of our standard units and graduate to a larger condo space as they expand. Try doing that with a traditional 5-year commercial lease.
Now…
Here’s how it all started:
Phase 1: Starting with the Fundamentals
Our first development taught me everything about the business model.
Here's where we stand today with Phase 1:
• 63 units spanning 56,664 total square feet
• 100% occupancy
• Monthly income of $45,330 ($0.80 per square foot)
• Monthly expenses of $12,692 (28% expense ratio)
• Monthly NOI of $32,637
• Monthly cash flow of $13,637 after debt service
The success of Phase 1 made two things clear to me:
1. Demand for professional storage/workspace vastly outpaces supply in many markets.
2. When you're at 100% occupancy, it's time to expand.
Phase 2: Leveling Up with Luxury Storage Condos
For our second phase, we got creative.
Instead of just building more standard units, we developed luxury storage condos along the high-exposure frontage road.
These are larger units (1,200-3,000 SF) with offices and bathrooms — perfect for small businesses that want to run operations from their space. Some people call them contractor shops.
The numbers on our 7-unit luxury storage condo development:
• Total development cost: $2.89M
• Cost breakdown per unit:
- Land: $41,000
- Infrastructure: $97,000
- Building costs: $275,000
- Total cost per unit: $413,000
We structured these units so businesses could either buy or lease them:
• Sale price: $489,000
• Monthly lease rate: $3,785 (covering debt service, CAM, taxes, insurance, plus 8% cash-on-cash return)
Here's why I love this model:
As businesses grow in our standard luxury storage units, they can graduate up to these larger condo units. It creates a natural progression that keeps good tenants in our ecosystem.
(Honestly, the great, reliable tenants are one of the best things about luxury storage. People are a lot more likely to pay their rent when their business assets are at stake vs. traditional storage holding their grandmother’s plastic-wrapped sofas.)
Phase 3: Going Institutional
In Summer 2025, we're planning on launching Phase 3. While I can't share specifics yet, our goal is to scale up to institutional-grade quality, targeting 100,000+ square feet of space. This is the size where major institutions start looking at acquisitions. With every project we do it's all about exit strategy and getting to institutional quality products makes it much easier.
The Investor Experience
Most investors get lost in complex metrics like IRR and cash-on-cash returns.
So instead of being complex, I’ll lay it out simply:
My goal is to double my investors’ money in 5 years. That's it. I’m happy to talk to anyone about pro formas, metrics, and multiples, but that’s the end goal we’re shooting for.
Want to Get Involved?
If you're interested in learning how to passively invest in luxury storage as an LP, join my exclusive investor list for first access to new opportunities and detailed deal breakdowns.
If you’d like to partner on future projects, we’re looking to expand across the country. We are currently adding about 500,000 SF of storage per year to our portfolio. We are teaming up with great partners across the US who are able to source land, cash, and local contractors to help us achieve our goals.
If you would like to be a partner of our please watch the video below, and if you qualify please fill out our partnership application here.