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Cory Sylvester

Entrepreneurship & Real Estate (mostly self storage)

Documenting my journey operating a $500 million self storage portfolio & running multiple real estate, and real estate technology companies with 60 employees.

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Featured Post

Why I’m investing over $1,000,000 to build zoning technology

I started DXD with the idea that if we could find areas with high rental rates, we could build the most valuable storage properties in the country. Was I right? Yes, and no. Two of DXD’s first projects used this technology, which quickly led us to areas with high rates. That was only part of the equation. We then had to analyze the target and secure parcels zoned for self-storage. At scale, the heatmap rental rate technology increases our efficiency by ~10%-20%. I discovered that the real...

about 2 months ago • 2 min read

I had a conversation with the nation’s largest storage developer this week. This developer has consistently built $250-$400mm of storage annually for the last eight years. This year, he expects to build $50mm. This dynamic is playing out across our industry. It’s nuanced and we’ve covered how the largest REITs have changed their pricing strategy dramatically over the last 18 months. To quickly review, instead of waiting nine months to raise the rent 8-12%, REITs are now raising the rents...

2 months ago • 1 min read

The last four years have been a whirlwind for the storage industry. A rapid acceleration of fundamentals in 2020 and 2021—driven by a considerable increase in demand for storage—was followed by a notably softer 2022 and 2023. On the surface, it would be easy to discount the recent decline in online web rates as purely a function of lower demand, but the story is more complicated than that. Here’s why: When you go online to rent a storage unit, there are two rates that you see on the website:...

3 months ago • 5 min read

This email is a bit of a departure from my self-storage-focused content, but I guarantee it's relevant to improving your life, whether you care about self storage or not. Last week, I negotiated a $10,000 discount on a new truck. Here’s the story, tactics, and why you are missing out if you aren’t studying how to negotiate properly. The truck is a Chevy 2500 HD ZR2; not many of them are available, so I was already starting at a disadvantage. It was the only one in the area, and only 150 have...

6 months ago • 2 min read

The lending environment remains as tough as it has ever been in self storage. I spent the last week meeting with seven national and regional banks, and one of the major institutions believes this lending environment is worse than 2009. I’ve discussed the reasons for the tough lending environment in previously published newsletters, and while we have strong relationships with lenders that are financing our investments, this freeze in the debt markets has me excited about the future of...

7 months ago • 1 min read

Last week's note discussed the reasons behind the near-term slowdown in demand for storage. This week, we’re zooming out to look at the implications of the housing market as a whole on the storage industry. One place to start our analysis is the last major housing bubble. To rewind quickly, during the Great Financial Crisis of 2009 (GFC), there was a large increase in storage demand generated by housing foreclosures: Source: Radius+ Very simply, if the bubble in the housing market leads to a...

7 months ago • 1 min read

One of the best features of storage is how diverse the demand drivers are, meaning there are a lot of different reasons why people use it. Many of those reasons are largely static in nature; they happen regardless of the state of the economy. This is the primary reason why storage is, hands down, the best-performing real estate asset class over the last 25 years. So why is demand for storage so weak right now? Has something changed structurally? Short answer is no, but the largest marginal...

8 months ago • 1 min read

The Efficient Market Hypothesis (“EFH”) suggests that financial markets efficiently incorporate all available information into asset prices. If we look back at 2023 so far, what the EFH shows us is that the market has no idea where interest rates were or are going: At the beginning of the year, the market was expecting interest rates (fed funds rate) to be ~4.25%; today, it is currently 5.50%, an error of nearly 30%. The idea is we are in a highly unpredictable environment. Last year, we saw...

8 months ago • 1 min read

You sell air conditioners, and your boss points out the following statistics: Florida has four air conditioners for every house in the state. Minnesota has one. He suggests that you spend all of your time in Minnesota selling air conditioners because Minnesota is under-saturated relative to Florida. This strategy obviously doesn’t make sense, but this is how most storage developers think. The demand for air conditioning in Florida is a function of the warm climate (a unique regional local...

8 months ago • 2 min read

Last month the largest on-demand storage company, Clutter, sold itself in a distressed sale to Iron Mountain for $40MM. Clutter, and its predecessors, raised $439MM over the last decade trying to disrupt the traditional storage model by offering on-demand service, meaning employees would come collect and store items, returning them when the customer requested. The moment Clutter folded marks what I would classify as the official end of the on-demand storage era. So what happened? When I came...

8 months ago • 3 min read
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