The AAA Storage Podcast

Join host Paul Bennett as he unpacks what truly drives demand in self-storage, debunking the myth that population size is the main factor. This episode explores the critical impact of domestic migration, the Six Ds of storage demand, and the importance of hyperlocal market analysis. Paul offers firsthand insight into standout states like Texas, Florida, and the Carolinas, sharing real-world examples of how growth, supply imbalances, and market corrections shape successful investments. Tune in for practical perspectives and proven strategies that set self-storage apart from the rest of the real estate landscape.

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Chapters
(00:00) What Drives Self Storage Demand
(02:46) Balancing Demand and Supply Imbalance
(04:02) Texas Market Focus and City Skirt Strategy
(10:02) Understanding Rate Declines and Overbuilding
(14:52) Market Corrections and Supply Pipeline
(16:19) Florida’s Shifting Demand and Six Ds
(20:30) Growth and Migration in the Carolinas
(27:52) Gastonia Case Study and Area Transition

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Creators and Guests

Host
Paul Bennett
Managing Director at AAA Storage

What is The AAA Storage Podcast?

Investing in self storage gives you the fundamentals and growth you need to grow your portfolio. But skip the opportunities from golf buddies and gurus—invest in a real track record. Started by John Muhich in 1993, AAA Storage has delivered 19% IRR across 90 deals, totaling $450M in exits. Listen to our expert insights on investing from the AAA Storage team. See more at aaastorageinvestments.com.

Welcome to the AAA storage podcast,
your integrated real estate and

development partner, exploring all
things, self storage investing to

bring you diversified success.

Let's dive in.

Brandon Giella: Paul, what really
drives demand in self-storage You

know, there's a common perception
that it's a population size maybe, but

maybe there's something else to it.

Paul: Yeah, Brandon, great question.

It is not population size.

It is actually.

Uh, domestic migration, uh, population
growth would be a metric that would

come closer to, to framing the
opportunity within a, in a market,

but there's actually more than that.

Uh, but for example, a, a a, a city
with a fairly significant population

and little to no inward migration or
a net outward migration, which you're

starting to see in some states and
some cities, uh, in today's world.

Would actually be far less attractive
than a smaller market that's showing

really strong net uh, inward migration.

Uh, the, the fact of the matter is 68%
of the people who move in the United

States of America use self storage.

The other aspect of it that I
think is, is really interesting.

It is similar to migration, but different.

It's really about activity.

It's about events that are
occurring within a given market.

There used to be what's called the
four Ds, uh, of demand and storage.

It's actually grown to six.

I don't know who's the author of
that, but, but it, there, there are

pretty logical dislocation, death,
decluttering, downsize, divorce, and

population density is the last one.

Um, back to the point about this
really not being about population.

And so when you're looking at a
market, it's not only looking at

population growth and inward migration,
but there are statistics out there

that will tell you, we'll talk
about some of 'em in just a minute.

How a given market stacks up in,
in the, the areas of those six Ds.

Um, from a population demographic
standpoint, the other thing that can

really matter is business formation.

Business formation is
evidence of activity.

Activity is what creates the
demand for self-storage So, um.

That those are really the, the,
the key things that really make,

uh, a difference in terms of
the performance of a given site.

And today what we're gonna do is
have some fun talking about the three

states that we've developed the most
in Texas, Florida, and North Carolina.

Uh, and in particular the two states
that Growth Fund Two is invested in,

which is Texas and North Carolina.

And see how they.

Score, if you will, on that migration
metric and some of the six Ds.

Brandon Giella: That's helpful.

Okay, so demand is important for when
you guys are doing your due diligence

on these areas and then to measure that
you got these six Ds or or thereabouts.

And then, uh.

That's led you to certain,
uh, certain areas,

Paul: Yeah, there's certain
characteristics we look for with any site.

Um, and it's not this demand.

We have to look at the supply side
too, particularly in today's market.

We'll touch on that
really briefly, but, but

you.

If the demand is not there, regardless
if there's a, if there's supply

that's, that's coming online or not,
it's still not the right market it.

So the first thing you look at is demand.

And if the demand is there,
then you have to look and see.

How well is that demand being met?

Are there lots of competitors
coming into the market?

If so, it may disqualify a given area.

Um, and if not, then it looks
like a real attractive 'cause.

What you're looking for is that imbalance.

Right?

More demand than there is supply and
more demand than there is supply in

the pipeline that's coming online, even
if it may not be operational today.

Brandon Giella: That's helpful.

Okay.

Helpful.

It's like a, it's like wind.

Wind is just the movement of air
from low pressure to high pressure.

So when you

Paul: Yeah.

Brandon Giella: imbalance, that's
the movement, that's activity.

I like that.

Paul: Yeah,

Brandon Giella: my analogy for the day.

Paul: I like that.

I, I'm a, I'm a weather nerd anyway, so.

Brandon Giella: alright,
so let's talk about Texas.

I'm from Texas.

I live in T, well, I'm not from Texas.

I live in Texas.

Great state.

Best state there is something to say.

me about that.

What's the picture look
like in Texas for y'all?

Paul: Uh, really interested
on a macro level.

Brandon Giella: Yeah.

Paul: one, Texas ranks number
two in the United States of

America in inward migration.

In fact, growth fund two will
be invested in the number one.

And number two states for inward
migration in the United States.

Um, spoiler alert, the other's.

North Carolina, which is the only
other market growth, fund two,

is investing in the the other.

Um, the other metric that it
scores very highly in is, uh,

business formation, uh, 8.4%

growth year over year, last year in
the state of Texas, in the formation

of new businesses and small businesses.

Really drive activity in
both storage and small bay.

Um, it, you know, in, in a very real way.

The the last one, um, is the
fact that Texas, we, as you know,

we focus on city skirt markets.

When we talk about investing
in Austin or San Antonio, we're

actually more li more than likely
we're not in the Austin city limits.

We're not the San Antonio city limits.

We're in Georgetown, Texas, which
is a suburb north of Austin, which

for five years in a row was the
fastest growing town in America.

So lots of inward migration.

I think the other thing that you see
is that when people move from one

area to another, more often than not,
they're not moving into the city center.

They're moving into a suburb that
surrounds Dallas Houston, San Antonio,

Fort Worth, Charlotte, Raleigh, uh
Charleston, South Carolina there.

There's not a lot of growth in
Charleston, South Carolina, but

Mount Pleasant, South Carolina, which
happens to butt right up against it.

It's growing so fast they
can't keep up with it.

And it's now grown 15 to 18 miles
north of Charleston, up the coast.

Brandon Giella: Yep.

Paul: so our city skirt thesis kind
of plays into where that migration is

actually landing in a given market and,
and that's really why we focus on it.

Brandon Giella: Yeah, no,
that's, that makes sense.

My brother lives in Mount Pleasant,
actually, and he can testify.

It is, it's insane the growth
that's happening there.

Paul: Yeah.

Brandon Giella: that checks out.

Okay, cool.

Okay, so talk to us a little bit more
about, um, some of the places that

you guys are really looking in, in
Texas and kind of the, the picture

that things are shaping up there.

Paul: Yeah.

The, the, the other aspect, it's
kind of a, a little bit of a detail,

but that we, we really focus.

Not exclusively, but we, we have
a fair, fairly strong focus on

what we call interstate corridors.

Interstate moves, uh, are the
most, are the moves that most

frequently result in the use of
storage on a little known statistic.

Brandon Giella: Okay.

Paul: and so in Texas we, we focus
on, particularly in the Austin, San

Antonio market, we focus on that I 35.

Corridor.

Um, we, we, we, we are constantly
looking for land in the Austin

suburbs in New Braunfels.

And, and that area, which is south of
Austin on the way to San Antonio, and

then the San Antonio, uh, city skirt
markets and, and, and metro area that

that corridor is, is been very, very
good to us over a long period of time.

Uh, and then the other market in Texas, we
really don't do much in Dallas-Fort Worth.

Um, so much of our operation is centered
in that Austin, San Antonio part of

Texas that it's a little bit of, uh,
of a little bit further away in Dallas.

And it's a market we don't know as well,
but, um, but suburban Houston, you know,

one of the things that can also fool
you is it, it, it's kinda like, uh.

What, what would be the right analogy?

Um, you can't deposit
percentage points in the bank.

It's dollars that you
could deposit in the bank.

Brandon Giella: Yeah.

Paul: The City of Houston
doesn't appear in the top.

Quartile of of growth year over
year because it's the second

largest metro in the United States.

So getting 6% growth when you're
already at a population of 20 million.

I honestly don't know what the whole
population of Houston Metro is, but

it, the percentages come down, but the
actual number of people moving in are

substantial, if that makes any sense.

And, uh, and like I said, percentage
points don't rent storage units.

Uh, it's people who rent storage units.

So what matters is the number of people,
and we've had some great success.

We've got a fund one project.

Uh, uh, that is south of, of Houston.

Um, and, and we've got a fund, two
project that's in Northwest Houston,

uh, that we're super excited about.

It's actually under construction
now, about 60% complete.

So, uh, but those are the two, two
areas in Texas that we've, we've

focused on on most, um, over the years.

And the last comment I'll make is,
you know, migration is critical.

And one of the reasons we've
built in Texas and Florida and now

North Carolina over the years is
that growth cures a lot of ills.

Um, you, you, you build a storage facility
and miss the market in a community that's

small and not growing and it could take
you the rest of your life to dig out.

Um, you make a mistake in Austin and
it may look ugly for a couple years,

but the growth will bail you out and we
certainly don't wanna make those mistakes.

But the reality is there's not another
state in the country that has grown.

As much as consistently over a longer
period of time than Texas and, and that's

one of the reasons why we've remained
Texas centric for a lot of our 33 years.

Brandon Giella: Well, maybe you'll,
you'll make your way up to Fort Worth.

I got, I got a place, I need
a place to put my stuff, you

know, Um, no, I like that.

About, uh, about, um.

Uh, how growth will bail you out.

You know, people say
like, pick an industry.

If you're starting a business
that industry's growth will

carry you, you know, even if

Paul: Yeah, a rising
tide floats all boats.

Brandon Giella: There you go.

There you

Paul: But you know, but we have to talk
about the other side of the equation.

I don't think we're gonna dig deep
into some specific hyper-local

market data today, but the reality is
there have been some rate declines.

And you know, if you look at
the data from a rate standpoint.

Um, you, you'll see that depending
on the market, uh, rates have

come down since 2021, early
22, anywhere from two to to 8%.

Um, on a, on a year over year basis,
uh, uh, I think it's important to point

out if somebody goes out and looks at
that data and says, Ooh, I don't want

to, I don't wanna invest in storage, it
looks like I'm catching a falling knife.

Um, the, the reality is, first of all,
you're looking at trailing data and we,

there's a wide acknowledgement of the
fact that we've been in a corrective

phase in the self-storage business.

Um, the, the reality is during
COVID use of self-storage exploded.

Occupancy went to 98% across the
country, rates were at two and 3%.

So developers do what developers do they
overbuilt particularly in certain markets.

Um, and, and that then caused a battle
for customers, which caused rates

to depress to keep occupancies up.

Um, and so you're, you're, you're,
some of the data you're looking at

is the tail end of a correction.

Um, the, the other thing is that.

Uh, we've talked about this a lot.

It's a hyper market
hyperlocal market product.

So I can show you data right now that
says San Antonio is overbuilt, and yet

I can also put my finger on the map
at a, a project we have right now in a

San Antonio suburb, uh, that's leasing
up on pace, if not ahead of pace, uh,

in slo, which is outside San Antonio.

And the reality is.

If you look at that local market, that
five mile radius around that site, it's

not overbuilt and demand is growing.

There are tons of rooftops and two
tons of new residential development

that's driving, um, results that are,
are beyond what we initially projected.

And so you have to be kind of careful,
um, say in, well, San Antonio's overbuilt.

Why would you invest in San Antonio
in any market in the country?

Um, you can find an
area that that's a hole.

We call it a hole in the market where
there's really no new development.

If there are existing facilities that are
old and outdated and they're locally run.

Um, and there's a real opportunity
that I'm going too long here,

but I can't help but mention it.

Fund one also has a project
in Laga Vista, Texas, which is

on Lake Travis outside Austin.

And it's a nice little market.

Um.

And it, it's mostly local competition.

There's not any REITs, but it wouldn't
have been a market based on the data.

I would've expected to stand out.

That facility just cod,
ah, gosh, less 90 days ago.

It's blowing the doors off.

We, we leased 20 net units.

In the month of March, we were
at 13, mid month in April.

I won't get data again until the
end of the month, but, um, it's

performing 50% above projection.

Um, right now.

It may cool off at some point, but
just another example of, of, you know,

if you're in the right space and you,
you've really looked hard at the data and

gotten on the ground and driven the area.

Um, you, you'll, there are opportunities
even in markets that people think

statistically are overbuilt.

Brandon Giella: I love that you guys
have always, uh, uh, impressed me with

your emphasis on hyperlocal markets.

And we've got an, an earlier
episode, one of our earliest

episodes on, on that point.

And we even talked to Logan
Broyles and analysts at the

Paul: Yeah.

Brandon Giella: uh, to talk through
some of the details and how they, how

he, he comes up with some of these

Paul: Well,

Brandon Giella: and things like that.

It's really helpful.

Paul: we need to move off this point, but
the other thing I can tell you is that.

Yes, things got overbuilt.

Yes, it caused rates to depress.

However, it also re resulted
in less development.

We've talked a lot about that.

The projections show the, that the rate
of developments followed from over 4% of

current inventory on an annual basis to
probably land by 29, 20 30 at about 1.5%

of current inventory.

Right now out of the um, seven Texas
self-storage sites that we have in Growth

Fund two across all seven sites, there
are five new competitors that are in the

pipeline to enter those markets, and three
of them are expansions of an existing

facility, which are usually fairly
small in terms of their square footage.

Um.

And, and so the, the supply side
of the equation has disappeared.

Um, and it's the result of the correction
that we've been in and the fact that when

rates are down and interest rates are up,
it's harder to get a deal to pencil, um,

harder to get a bank loan, harder to make
the numbers work harder to get the equity.

And so those deals just evaporate.

Um, and, uh, and, and so it's,
it's, the supply side is correcting.

And that creates an opportunity
even in markets that have

seen lots of new construction.

I mean, keep going, don't I?

But San

Brandon Giella: give

Paul: San is,

Brandon Giella: of like, you get like a
feel for the market or is that because

you guys are very data driven, but
you also kind of get this, this sense

you've been doing it a long time, you

Paul: it's, it's a little bit, it's

Brandon Giella: things are headed.

Paul: a little bit.

Uh, art and a lot science,
but there is an art component.

Our, our, our VP of property
manager can I, I, we looked at a

site and I wasn't sure about it.

And, uh, and, and our VP of
property Management looked at

it and said, it's a dead winner.

And when I asked him why,
he said, look at the map.

Look at the, the routes
people are traveling.

Look at the traffic count
in front of our facility.

That visibility alone.

Will, will drive success at that
facility and damn if he wasn't right.

So,

Brandon Giella: I like that.

Okay.

All right.

Well, I'll let you take
us on a journey here.

We could either go talk about
Florida or the Carolinas, so

Paul: uh, let's talk about Florida.

Brandon Giella: wanna go.

Paul: Let's, let's, let's
go to Florida for a minute.

Um, yeah, macro wise, uh, Florida's
the number two domestic, uh, it, it was

the number two domestic, uh, migration.

Uh, in the United States.

It's actually fallen down
to about three or four.

It's number two in 23, 24, but
it has always been near the top.

It's always been in the top five.

It's cooling off a little
bit, to be honest with you.

Um, property taxes and, um,
some of the storms that have

come through have, have, um.

Dampened some of the enthusiasm
for, for the state of Florida,

which is partly why there is no
Florida project in Growth Fund two.

Uh, we just felt like we've got, we sold
two projects in the last six months that

we built in Florida and did very well.

Uh, we've got a fund, one project
in Florida that we feel really

good about in the Palmetto Florida,
which is not far from Sarasota.

Um, really good barriers
to entry in that market.

So we feel really good about that project.

Um, but, but overall it has
historically been a very high domestic.

Uh, uh, my Edward migration market.

It also checks the box.

If you think about the demographics
in Florida on several of the sixties,

ds, uh, for example, it has the
highest population over 65 of any

large state in the United States.

22% of the population
of Florida is over 65.

Uh, I hate to say this, it sounds
mean, but that means death, which is

one of the six D's, comes into play.

Um, these people are often downsizing
because they're moving from the home.

They raise their kids in to Florida.

Um, they're, they're decluttering.

Um, the decluttered and
downsizing can be very similar.

In this case, they're downsizing and
decluttering at the same time, and

they've been dislocated by choice.

Um, sometimes you see dislocation
because the economy slows down.

People lose jobs, they have
to move to get a job, which is

why storage performs so well.

In a down economy are one of the reasons.

Um, and it also happens to be the
sixth, the, the number six state

in terms of the divorce rate.

So it checks four or five of the boxes of
the six Ds in addition to having really

strong inward migration historically.

So, uh, that, that's really the story
in Florida and why it's been a, a very.

Good place to develop self storage,
you know, over the years, like I said,

kind of taking a breath in Florida
right now and, and see where it goes.

Um, but the, uh, the project we
have in Palmetto will deliver to the

market in the next couple of months.

It's, it's.

Well along in its construction.

Um, and, and it, it's located, uh,
right off a, a major north-south,

uh, thoroughfare with traffic
counts in front of the store at

somewhere in the low 40 thousands.

And again, that visibility is
better than any advertising

you can buy in our industry.

'cause it keeps you top of
mind every time they drive by.

Six months later, they've driven by.

Once or twice a day or a week for
the last three years, and all of a

sudden they hit a need for storage.

You're the first person they think of.

Brandon Giella: Yeah.

Yeah, that makes sense.

I, uh, I have another brother who
lives near Sarasota, you know, south of

Paul: Oh, well, yep.

Brandon Giella: the, the

Paul: I,

Brandon Giella: is enormous there.

I was just there a few weeks ago
and driving around his neighborhood,

everybody has their garage up
and it's just slam full of stuff.

Paul: yeah.

It

Brandon Giella: strong

Paul: is a mar.

Brandon Giella: stuff

Paul: also, it's,

Brandon Giella: Florida.

Paul: it's also a market where everybody's
got a boat or a jet ski or, you know,

all kinds of recreational equipment.

And, uh, which is a, a good, um, a good
opportunity for, for self storage and

that central Florida, you hadn't asked
me about the corridor yet, but this,

you're talking about the I 75 corridor.

It's a little bit insulated from
some of the worst of the storms.

Um, 'cause it's, it, it's a
little more center of the state.

And, and a little bit
less coastal oriented.

Um, and so it's, it's been a,
it's been a good market over time.

Brandon Giella: Yeah.

Yeah, that checks out.

All right.

Let's walk into the Carolinas.

Talk to me about this.

What's going on there?

Paul: Um, interestingly enough, um,
as of 2025, it was number one in the

United States for net inward migration.

Um, and.

Mecklenburg County, which is the,
the, um, we, we have a fund two

project in Gastonia, which is 18
miles west of Center City, Charlotte.

So it's technically in Gaston County.

Um, but it's, it's essentially on
the edge of Mecklenburg County and

Mecklenburg County has the highest
business formation rate of the state.

Um, so it, it, it checks a couple of those
boxes, um, and Gastonia as a sub-market.

It's now like we're building
a business park there as well.

And we, we were doing some research
'cause we wanna work with a good

leasing broker for the, for the
small bay industrial product there.

And if you talk to all the real estate
people in, in, in Mecklenburg County and

in Charlotte in particular, they consider
a Gastonia part of the Charlotte market.

It's, there are two communities, Monroe
to the east and Gastonia to the south.

And Charlotte has grown east and south.

And, and it's about to absorb those
communities that they, they'll

maintain their unique identity.

But in prac all practicality
from a a, a market standpoint,

they're really part of Charlotte.

Um,

and, uh, the, the, the growth in the
metro is driving that inward migration.

Um, like Dallas-Fort Worth,
I'm sure the old traditional

neighborhoods in Charlotte Myers Park.

Um, Dilworth, um, those, those areas.

Um, if you wanna buy a home in
those markets, you better, you

know, better be able to write a
million dollar check or bigger.

And so it's driving people to the suburbs
because the cost of housing, uh, there.

And in the case of Charlotte, I keep
going on here, but in the case of

Charlotte, you're seeing a lot of
inward migration from the northeast.

Um, and even from California
and other markets.

So what you've got is people moving in
who just sold a house for a ridiculous

price because where they live, housing's
really expensive and they're coming

into Charlotte and what seems expensive
to a native North Carolinian looks

cheap to them, and it's just driving
the price of housing in charge.

So it's driving people out to the suburbs,
to the Gastonia of the world and, and,

and, and, you know, in that market.

So it really.

Really has made a difference.

Brandon Giella: Yeah, that's
definitely the case here in DOW.

Anyway, uh uh, I feel like every
other person I meet is from California

and they just sold a house for $5
million buying something here for half

Paul: Yeah,

Brandon Giella: a million.

That's chump change, all in cash.

Paul: yeah.

Yeah.

Brandon Giella: at TCU is from
California, you know, that kind of thing.

So that

Paul: Funny, funny, quick personal story.

Um.

My wife and I were, were
looking to downsize.

Our four children are outgrown.

We have six grandchildren, and
this was several years ago.

Literally right as we
were coming outta COVID.

And we saw a house and, and, uh,
and she really, really liked it.

And, but it had an offer on
it that had been accepted.

She wanted to put in a backup offer.

It's like I don't wanna
put in a backup offer.

And I talked to the realtor and he said,
well, it's a couple from California.

They're moving here from California.

And in the back of my mind, although I
never sent it to my wife, I thought was,

ah, well go ahead and put in a backup
offer 'cause it'll never be accepted.

They're an all cash buyer and it,
there just won't be any issues.

Um, and so I thought I could do
what my wife wanted and still

sort of dodge the, the bullet.

Um.

About, Hmm, I don't know, 30 days
later, uh, we were up in the mountains.

We were in a grocery store and I
got a text from the realtor that the

other contract had fallen out and
we were now the prime and we wound

up buying the house and we love it.

But, but, but to your point,
California buyer, all cash.

I figured that that deal's a leade.

Absolute gonna close.

I won't be at risk at all, but,

Brandon Giella: Yep.

Paul: it didn't turn out that way.

But,

Brandon Giella: Well, glad it
didn't turn out, but it often does.

It often does.

Especially

Paul: well, it was a renovation
project, which is the other

reason I really didn't want it.

I didn't want to have to go through, you
know, completely gutting and renovating

the house, but it turned out fine.

So all good at the end of the day.

Brandon Giella: That's good.

That's good.

Paul: Yeah.

But the, the site we have in
the Charlotte market, I wanna

talk about it for just a minute.

I told you it's 18 miles, uh,
west of, of downtown Charlotte.

And as I've already said, the,
the growth in the metro is really

driving what's happened out there.

But this site, um, I is, you know
what, I'm gonna hold onto this.

We'll talk about it at
the end of the episode.

Um, I'll talk, I'll talk about Gastonia
in some detail and why I like it

so much, but we're really excited
about the, the opportunity there.

Brandon Giella: Awesome.

Cool.

Okay.

Okay.

I wanna hear more about it.

so, uh, just to kind of summarize where
we've been, um, it is not population size.

It is activity or movement.

Uh, especially people, you know, the,
the net or inward migration into a,

a community, um, hyper-local market,
but a state generally speaking.

Um, and then there's those and
how you define that, a heuristic

for that is these six Ds.

so that gives a kind of a template
or a framework to measure demand.

Think about demand.

Supply side's also important.

But with all of that together,
you see these states, Texas,

uh, Florida, and the Carolinas.

And uh, you guys have identified
some communities where that is

for sure the case where you have
really strong demand for people

moving for one reason or another.

And, uh, that's led to a lot of
how you've created a portfolio

Paul: Yeah.

Brandon Giella: fund two.

Paul: Yeah.

And I would say the other
thing, just to not clarify, but

to maybe be more detailed is

Brandon Giella: Yeah.

Paul: the, the inward migration
at a state level is critical.

Because you're not gonna find
a high, a hyper-local market.

With extraordinarily high growth in
an, in an area that isn't growing

Brandon Giella: That's

Paul: you will see variances in the
growth in a hyper-local market within,

but you have to have the underlying
inward migration to the area for any

hyper-local market to show the kind of
growth that you're really looking for.

Um, and, and you know, this
episode is really about why we

build and the states we build.

I'll give you three really.

Good reasons, number one.

Those three states combined have
more inward migration than, than

any other combination of three
states in the United States.

Uh, number two, 25% of all new business
formations in the United States of

America occurred in those three states.

Think about that.

Three states, which is, I
can't do the math in my head

that fast, but it's, it's, uh.

Less than 10% of the country driving
25% of new business formation.

And then the o the third thing is
that all three of them are in the top

10, in three or more of the six Ds.

Brandon Giella: I

Paul: and so that combination creates
the level of activity and, and,

and the, the demand for storage
that makes them attractive markets.

Brandon Giella: That's perfect.

That's perfect.

That's perfect.

Talk to us about the Gastonia

Paul: Yeah,

Brandon Giella: story.

Paul: yeah.

You, you, you, we talked about
before we started today, and you

wanted to kind of talk about,
um, you know, a, a fund two site.

Where the data was there, but the,
the look on the ground, um, was

confirming of what the data said.

And, and in Gastonia, the data's there.

We talked about the Charlotte market.

We've talked about the inward
migration, the business formation.

Um, so the, the underlying fundamentals
are there, but this particular

location is really intriguing.

It's on West Franklin Boulevard,
um, which is, it was historically

a more industrial area.

Uh, which is not a bad thing
for storage or, or small bay.

The storage facilities are you usually not
dropped in the middle of a neighborhood.

They're usually on a commercial
or industrial corridor,

uh, close to rooftops.

But the, the interesting
thing about this is this whole

local market is transitioning.

Um, one of the thing that that
happened as, as it's happening,

is directly across the street.

From our location, we have 17 acres.

Um, is a 285 acre muses development
with 800 single family homes and

a hundred thousand square feet
of commercial and retail space.

And not only is that gonna create an
initial customer base or a customer

base for our facility, but more
importantly, it's the tipping point

of that, the transition of that
area with the development of that.

F the area, you're gonna see tracks
of land up and down West Franklin, all

around us start to get developed by
Lennar, by all the major home builders.

And it's sort of the tipping point.

Um, and so we have the advantage of
having bought land very inexpensively.

And a market that is gonna look totally
different in five to seven years

in terms of what's going on there
and, and, and that type of thing.

So, um, it, it just is an
intriguing opportunity.

And on top of that, today,
west Franklin Boulevard has a.

Traffic count in the mid 20 thousands.

Um, and we look for stuff over 15.

So we've got the visibility we need.

Uh, we, we've got the
residential development that's

happening all around us.

We got really inexpensive land.

Um, and, and I'm really
excited about that project.

So the data was good.

The underlying fundamental data
was good, but when you really get

boots on the ground and you start
looking around at what's happening.

Um, and you can see the
transitioning beginning to occur.

And, and we know the developers
of 285 acres, not personally, but,

but their development is so large.

North Carolina, DOT forced them to
do road improvements and they had

to buy the corner of our lot, uh,
to improve the intersection there.

There's, we're on West Franklin, there's
a road, um, at the end of our property, at

the boundary of our property that comes in
off Interstate 85, which is a mile away.

Um, and the developers of the site
across the street were, were not

forced, but they didn't have a choice.

They had to buy an acre of land
from us on the corner of our

lot because they had to improve.

They gotta widen and improve that
intersection, uh, because of the

traffic they're gonna create.

So, um, it, it's just an interesting
site with a ton of potential

and, uh, we're getting ready.

We'll start construction midsummer
in Gastonia and I'm really

excited to see how that plays out.

Brandon Giella: That's cool.

That's cool.

Okay.

So just to, to clarify that site, uh, the
size of it and what it will do to create.

You know, more individual homes
creates growth in that area, which

then drives demand for self storage.

Is that the,

Paul: It, it creates inward
migration, 800 families that'll

be moving in across the street.

Brandon Giella: yeah.

Okay.

Paul: but as importantly, it's,
it's, we, we, everybody that's

listening to this has seen.

Areas in their town that start to gentrify

Brandon Giella: Yep.

Yeah.

Paul: and, and you, you start to see it,
but then all of a sudden it reaches a

tipping point and all of a sudden, you
know, every week there's a house that's

being sold and being renovated and the
whole neighborhood is transitioning.

Brandon Giella: yep,

Paul: version.

But that's kinda what that
development represents once they

start building and selling homes.

Other developers are gonna have confirmed
for them the viability of that area

and land's still relatively cheap.

So I think you're gonna see an
explosion of new development for

residential homes, uh, in that area.

Like I said, it's a located a mile off.

It's probably statistically maybe not
accurate, but from a general sense,

the vast majority of people that live
in Gastonia are working in Charlotte.

And you get to Charlotte from
Gastonia by getting on I 85.

Brandon Giella: Yep.

Paul: And so the fact that our site and
the area I'm talking about is a mile

off a eight I 85 with a direct road, you
turn right at the end of our property

and in a mile you're exited onto I 85.

Um, it's just perfectly located to become
another residential suburban neighborhood

that where, you know, mom and or dad
are getting in their car every morning

driving to Charlotte 'cause they work
at Bank of America or Wells Fargo or,

you know, you can go down the list.

So.

Brandon Giella: What I love about you
guys, and I've said this many times on

the show, but uh, you guys have such
a focus and such precision and detail

looking at these hyperlocal markets and
how important that is to that exact point.

You buy some land and it turns
out because of where it's located.

You get these incredible developments
across the street that drive demand,

but it's things like that that you
guys are able to position yourself for

because of the research that you do.

So it's, it's just cool
to see kinda how it

Paul: Yeah, well this is a little,
um, maybe over disclosure, but,

um, but this, this site was
actually a junkyard what we bought.

We had to do a lot of work.

Brandon Giella: really.

Paul: Yeah.

Brandon Giella: Remove saw
blades and spark plugs from

the land, you know, and all

Paul: it was, I mean, it
was, it was cars and, and,

Brandon Giella: yeah.

Paul: and uh, and, and, and I
mean, so we were able to buy really

inexpensively, but it's another sign
that that area is transitioning, right?

The old junkyard that used to sort of
be the eyesore of the neighborhood's

now gone and it's gonna be replaced
by a state-of-the-art self storage

facility and about 150,000 square
foot small bay industrial park.

Brandon Giella: Yep.

That's cool.

That's cool.

Yeah.

You guys are part of the transition in a

Paul: Yeah.

Brandon Giella: That's cool.

That's awesome.

Paul, thank you for walking us
through these, uh, these stories

anecdotally and statistically.

Uh, it's super helpful to see, uh, in
detail where you guys are, how you guys

think about the different properties
that you have, and then, um, these

three states in particular and why those
states and what makes up Growth fund two.

So, uh, if anyone listening wants to
check out more, we have a lot more of

episodes that where Paul goes into a
lot more detail about these things.

Um, and then we've also got some.

Assets for y'all to read about
investor checklists and how 2026

is shaping up as far as the, the
market, uh, outlook is, is looking.

So please go to aaa storage
investments.com/insights.

There's a lot more there for
you guys to take a look at.

And

Paul: Okay,

Brandon Giella: we will see you next time.

Thanks so much.

Paul: great Brandon.

Always fun buddy.