11 May 2025
At the ISS World Expo 2025, James McLean caught up with Tyler Lambert from Live Oak Bank to break down what first-time buyers need to know, how to assess deals, navigate SBA financing, and make sense of today’s complex rental rate landscape.
He also shared insights on why data tools like Radius+ are crucial in a market where top operators play a different game.
Watch to get expert advice on smart buying, due diligence, and where the industry is headed next.
James McLean: Hey, Tyler. Thank you so much for making the time for this conversation. I've seen you at tons of trade shows, but can you give the people just a little bit of an overview of what you do and what Live Oak Bank provides for this industry?
Tyler Lambert: Absolutely. Yeah. Thanks, James. So, um, Tyler Lambert, I'm a lender on the self-storage team at Live Oak Bank. Um, we specialize in self-storage lending. So this is all I do every day is analyze self-storage properties with potential buyers, sometimes sellers. Um, but we take a laser focused, uh, industry approach to self-storage lending, which, um, proves beneficial throughout all, you know, the, the loan life cycle, whether it's application, underwriting, closing, um, we provide that industry expertise to try and make it as smooth of a process as possible.
James McLean: That’s awesome, man. That's awesome. You know, given that you're so laser focused on this one asset class and you've done it so immensely, so, so much volume, what are some things that first time buyers should know about? You know, if you had to give them like a, just one piece of huge advice, you know, what's the one thing you wish they would know?
Tyler Lambert: Yeah, absolutely. So when it comes to being a first time buyer or operator, um, what I like to tell people is, you know, look at the, the cap rates, look at the in-place cap rates. Um, a lot of first time buyers are going to be placed in an SBA products, which is great because it can give you high leverage. So up to 90% financing, 10% down. Um, but when we're doing something like that as a bank, we want to see profitability. Um, so a good rule of thumb that I follow is, um, make sure that the cap rate, the in-place cap rate on the self storage facility that you're looking at is equal to or greater than the interest rate that you're receiving on your debt, because that's a telltale sign of telling you that, Hey, this facility is pretty close to break even and pretty close to profitability. So that's really important for people looking at a ton of deals and a quick way to say, you know, is this property right for me or not?
James McLean: Thank you. That's such a valuable point to look out for, for any first time buyers out there, but equally so the industry has gotten so confusing with the way web rates are being advertised and what they mean for demand. How have you been helping people navigate this whole ECRI revenue management strategy that we've been seeing in the market?
Tyler Lambert: Yeah, absolutely. It, it definitely, uh, proves itself difficult to, you know, get an accurate rental rate for your competition and for your market. Um, feasibility studies are a great way to, you know, get a very detailed report on where your market's at, where your competition is at. Um, but I also think like radius is a, is a great product, um, to give you quick feedback, um, to take a look at the market. Cause you're not going to be able to just Google rates anymore. You just can’t, especially with the extra spaces, cube smarts, they're playing a different game than mom and pops are. So you need to dig a little bit deeper. Um, you know, you might go on Google and see extra spaces charging $20 for a 10 by 10. And that's just, you know, not exactly true. It's, you know, $20 for one month and then they're ramping those rates up. Um, so you, you know, you really need to take it a step further, you know, pay for some good due diligence from some industry experts like radius or a feasibility study specialist to really drill down and see, you know, what the market is actually telling you.
James McLean: Yeah. I think that's fantastic insights. You know, it's never been more important than ever to bring an expertise and to dig deeper. So to that same point, Tyler, I'm going to challenge you. What do you see for the future of this market? Uh, future of this asset class, given the current economic conditions, you know, how do you feel about self stores in the next 12, 18, 22 months?
Tyler Lambert: Yeah, that's a great question. Um, well just from a banking standpoint, finance standpoint, we see interest rates somewhat stabilizing. Um, if anything, they may go down at the back half of this year, which will be really helpful for, you know, buyers wanting to get into the industry. Um, what I kind of see as a headwind this year is construction development. Um, we've got steel tariffs, you know, on the horizon and we're already seeing some impacts from that. So we'll keep our eye on that. Um, but as far as self storage as a whole and as an industry, um, you know, it, it went through COVID just fine, if anything, it helped the industry. So it's kind of always taken whatever's been thrown at it. And I think it will continue to do so. Um, I think it's always going to be a nice stable asset to look into and a great industry for years to come.
James McLean: Well, Tyler, you echo my own thoughts. Thank you so much for being so generous with your time and keep helping people make educated decisions in our industry. It's the people that make self storage so awesome.
