Welcome To
Integrity Storage Group!
We Are Transforming Self Storage, Empowering Veterans through Investing, Achieving Extraordinary Growth & Building a World-Class Veteran-Led Organization
About Us
Integrity Storage Group will be an industry leader in self-storage, committed to establishing new benchmarks for innovation and service, intending to thrive in all facets of our business activities. Our goal is to deliver an unmatched storage experience to our clientele through cutting-edge technology and outstanding customer support. Our strategic acquisition approach is based on identifying and improving undervalued assets in the fragmented self-storage market to construct a resilient portfolio that generates unparalleled returns in the industry.
Message from our Founder ⎯ Ken Nuehs
In my capacity as founder, I have consistently envisioned an autonomous storage solution that distinguishes itself through its steadfast dedication to customer satisfaction, security and technology. Our journey commenced with a distinct objective: to enhance the storage experience using cutting-edge technology and exceptional service.
We invest in facilities and select strategic locations that guarantee expansion, service quality improvement, and operational excellence. Besides expanding our presence, we strive to establish new standards within the industry. You can rely on Integrity Storage Group to live up to our reputation, whether you are a customer seeking a secure location for your belongings, an investor seeking substantial returns, or a community member observing our entrance into your municipality.
Our Why?
At Integrity Storage Group, our mission extends beyond the transformation and consolidation of the self-storage industry. We are deeply committed to giving back to the veteran community by providing employment opportunities and robust support of nonprofit programs designed specifically for veterans. Our vision will redefine the self-storage sector while empowering veterans, fostering significant growth, and establishing a premier veteran-owned business. Our commitment to the veteran community inspires our values and actions.
Veteran Employment Initiatives
Supporting Veteran Nonprofits
Integrity Storage Group is more than a self-storage company—we are a community advocate dedicated to empowering veterans. Through targeted hiring practices and supporting nonprofit programs, we are committed to giving back to those who have served our country, ensuring they have employment opportunities and support that honor their sacrifices. Our mission to transform the self-storage industry and empower veterans is unwavering, driving us toward the realization of a world-class veteran-owned business that exemplifies success, integrity, and community commitment.
Objective Overview
The primary goal of the Integrity Storage Group is to bring about a significant paradigm shift in the self-storage sector. Through astute acquisitions and exceptional operational oversight, the company delivers outstanding customer service and state-of-the-art technology to provide customers with the most superior self-storage experience possible. This includes guaranteeing secure, dependable, and easily accessible services for patrons, all while generating substantial returns for shareholders.
Strategic Priority
The company intends to acquire underutilized self-storage facilities in select states, including Washington, Idaho, Oregon, Montana, California, Nevada, Utah, Arizona, Colorado, Wyoming, New Mexico, and Texas, primarily focusing on the second, third, and fourth-tier markets. The aim is to attain a critical mass consisting of annual revenues amounting to $50 million and a total asset value of $500 million.
Market Expansion
We will expand the operational footprint, starting with small to medium-sized facilities and potentially expanding to larger facilities and international markets, depending on establishing a strong domestic foundation.
Operational Excellence
Before resorting to third-party management, when necessary, we will gain an understanding of effective management practices by self-operating or automating initial sites and prioritizing areas with promise regarding technological advancements, substantial occupancy, and market rate adjustments.
Industry Overview
The Self Storage industry has shown remarkable resilience since its inception in the 1960s, as part of the commercial real estate industry. It has thrived amid diverse economic conditions, experiencing development influenced by economic volatility. During periods of economic prosperity, an increase in disposable income leads consumers to accumulate more products, requiring additional storage space. Conversely, economic recessions often force businesses and individuals to downsize, increasing the demand for storage solutions.
Self Storage revenue is anticipated to increase at a compound annual growth rate (CAGR) of 1.7% currently at $39 billion and trending to $44 billion by 2028. The projected increase in market capitalization shows a favorable outlook for the industry, implying substantial opportunities for growth and investment.
Currently, self-storage services are utilized by approximately 11.10% of U.S. households or 13.6 million individuals; this figure signifies substantial market penetration and establishes a firm groundwork for future expansion. The prominence of this phenomenon in the residential sector underscores noteworthy prospects, particularly in urban regions, where the limited square footage of dwellings may intensify the need for storage solutions. Anticipated to propel the industry’s forthcoming growth are sustainable practices and technological advancements that enhance customer experience and operational efficiencies—crucial elements in augmenting market penetration and capitalizing on the expanding demands of a dynamic economy.
The Self Storage industry boasts a vast network of 52,301 facilities spread across the United States, ensuring it can effectively meet the diverse needs of its clientele. This extensive presence provides broad accessibility and convenience for commercial and residential customers, demonstrating the sector’s commitment to efficiently serving a wide array of storage requirements.
To optimize service reach and accessibility, most of these facilities are strategically situated in areas with dense populations. It is significant to note that the Southeastern United States houses the highest number of storage facilities, comprising 29.4% of the total population. The allure of the region is significantly enhanced by its expanding metropolitan areas and burgeoning population. Notable concentrations are observed in the Western region, where California accommodates approximately 12.2% of the facilities within this industry. This distribution reflects the high demand for storage solutions in areas with limited living space and expensive real estate.
The positioning of storage facilities spans major metropolitan regions in the United States, including the Southwest, to mitigate the effects of urban sprawl and accommodate the constant influx of residents in need of space for their personal and professional belongings. As the sector progresses, these facilities must be strategically situated to accommodate the expanding storage demands of a population that is becoming more mobile. The industry’s capacity to respond to regional demographic changes is exemplified because national data shows facility sizes are proportional to the urbanization and population densities of specific states (Texas leads with 5,564 facilities, an increase of 134 facilities in the past year and nearly double the growth from two years ago). In contrast, Hawaii maintains the tiniest number of facilities, with a consistent 94. Idaho is distinguished by maintaining the greatest rentable square footage per capita at 12.5 square feet, underscoring the state’s distinctive market attributes.
Market Segmentation and Acquisition Opportunities for Integrity Storage Group
Unit Size and Rental Trends:
- Small Units ranging from 5x5 to 5x10 feet, are typically rented by urban dwellers with limited space. They are often used to store seasonal items, sports equipment, or excess personal belongings. These units represent 35% of rentals.
- Medium Units (10x10 to 10x15 feet) are the most popular size, accounting for approximately 40% of rentals. Small businesses commonly use these units for document storage and inventory and by families during transitions such as moves or renovations.
- Large Units (10x20 feet and larger) comprise 25% of the market. They are used predominantly for storing large items like vehicles, boats, or substantial household goods during major life changes such as downsizing or relocating.
What is Stored:
- Personal/Household Items: These constitute 76.5% of storage, including furniture, clothing, electronics, and other personal effects.
- Business-Related Storage: Making up 13.5% of usage, it encompasses document archiving, excess inventory, and equipment.
- Specialized Items: Approximately 0.8% of the storage, such as wine, art, and antiques, requires climate control.
- Vehicle Storage: Comprising 6.9% of the market, it caters to cars, motorcycles, RVs, and boats.
Reasons for Storing:
- Space Constraints: The leading reason is urbanization and smaller living spaces.
- Transitional Phases: Moving, marriage, divorce, or death, necessitates temporary storage solutions.
- Business Needs: Expansion, downsizing, or seasonal fluctuations in inventory levels.
- Security and Protection: For valuable items needing secure, monitored environments.
Opportunities for Acquisition:
- Underutilized Facilities: This category targets facilities with high potential but low current utilization, especially those that need to fully leverage modern technology or marketing strategies.
- Geographical Expansion: We aim to enter new markets with high growth potential, mainly focusing on urban areas with high population density and growth rates exceeding 1%.
- Facility Upgrades: Facilities requiring upgrades offer value-add opportunities through technology enhancements, improved security, or refurbishments that can attract a broader customer base.
- Diverse Customer Base: Expanding services to include more specialized storage options, such as climate-controlled units for sensitive items, will enhance appeal to a broader segment of the market.
Strategic Considerations:
- Leverage Local Market Insights: Understand local markets' specific needs and preferences to tailor services and marketing effectively.
- Enhance Online Presence: Many facilities suffer from poor online visibility; improving this can significantly increase customer reach and occupancy rates.
- Implement Smart Technology: Installing smart locks, security cameras, and online management systems to improve operational efficiency and customer satisfaction.
- By focusing on these strategic segments and opportunities, the Integrity Storage Group can effectively identify and capitalize on underperforming facilities within the market, thus enhancing its portfolio and maximizing returns through targeted acquisitions and improvements.
SWOT analysis internal
The self-storage industry, defined by dynamic market conditions and rapid expansion, has undergone substantial change due to urbanization and changes in consumer preferences. As of 2023, the industry is anticipated to generate an annual revenue of $39 billion, and forecasts indicate a consistent upward trend. Strategic acquisitions of underperforming facilities and creative adaptations to consumer demands, including downsizing and accumulating personal belongings, drive this expansion. Enhanced operational efficiency and technological integration have established the sector as a highly profitable area for investment and growth. The subsequent SWOT analysis assesses internal and external factors, including strengths, weaknesses, opportunities, and threats, to equip stakeholders with a thorough understanding which is crucial for navigating the dynamic self-storage market.
Strengths
- Significant Fragmentation: The industry is highly fragmented, with approximately 70% of facilities owned by smaller "mom-and-pop" operators, allowing for numerous acquisition opportunities.
- Recession Resistance: The self-storage industry has a proven track record of resilience, maintaining demand even when facing economic downturns. This history of stability provides a firm foundation for investment.
- High Returns with Value-Add Opportunities: There are significant returns on investment obtained, especially in good markets where value-add opportunities such as renovations or service expansions can increase profitability.
- Prevalence of Mismanaged Facilities: Many facilities are poorly run, presenting acquisition targets for operators who can implement optimized revenue management and technology.
- Founder's Tech Implementation Experience: The founder's proven experience in integrating advanced technologies enhances operational efficiency and customer service.
- Founder's Team Building & Overall Skillset: Strong leadership skills in team building and strategic operations contribute to the company's robust management framework.
- Extensive Experience of the Board of Directors: The Board of Directors brings a wealth of experience and a sound track record, which bolsters the company's strategic positioning and decision-making capabilities.
Weaknesses
- Commodity Type Vulnerability: The commodity nature of self-storage makes differentiation challenging, often leading to competition primarily on price rather than service quality or features.
- Heavy REIT Investment: Real Estate Investment Trusts (REITs) dominate the larger markets, which can overshadow smaller operators and intensify competition, squeezing margins for smaller entities.
- Low Barrier to Entry: The industry's low entry barriers encourage new competitors, which can saturate the market and destabilize established business models.
- Resource Disadvantages: Newer entrants or smaller operators often lack the extensive resources—such as capital, facility networks, and investor relationships—that longer-established competitors possess, placing them at a strategic disadvantage.
Opportunities
- Turnaround Potential for Mismanaged Facilities: Numerous mismanaged self-storage facilities are available for acquisition. With effective management and operational enhancements, these facilities can greatly increase in value, offering high returns on investment.
- Advantage Over Smaller Investors: Most smaller investors lack a highly experienced Board of Directors, providing a competitive edge to firms with seasoned leadership and strategic governance.
- Seller Financing Due to Higher Interest Rates: Higher interest rates make it more challenging for sellers to achieve their desired price, so they may be more inclined to offer seller financing. This allows buyers to negotiate better deals and secure properties at more favorable terms.
Threats
- REITs' Consolidation Activity: Real Estate Investment Trusts' (REITs) consolidation efforts can significantly affect smaller operators by increasing market competition and possibly leading to monopolistic conditions in certain areas.
- Increase in Individual/Private Investor Consolidation Activity: Similar to REITs, the rising consolidation activities among individual and private investors can tighten the market, reducing opportunities for smaller operators and increasing barriers to entry.
- On-Demand Business Model: The growing popularity of on-demand storage solutions threatens traditional self-storage models by offering more flexible, user-friendly alternatives that could divert customers from conventional facilities.
Target Markets
Our strategic geographic expansion targets a critical revenue goal of $50 million annually across 100 facilities in key 2nd, 3rd, and 4th tier markets such as Washington, Idaho, Oregon, Montana, California, Nevada, Utah, Arizona, Colorado, Wyoming, New Mexico, and Texas. With populations of 50-700k growing at over 1% annually, these areas will initially host small to medium-sized facilities (20,000 to 100,000 net rentable square feet) that we will self-manage or automate. Our criteria for acquisition focus on underutilized properties with high occupancy rates above 90%, particularly those not fully leveraging technology and requiring upgrades in tech, security, customer service, and curb appeal. This approach will enable us to maximize market potential and expand operations across the U.S., Canada, and possibly internationally, ensuring each facility contributes significantly towards achieving our substantial asset value goal of $500 million.
Strategic Approach
Integrity Storage Group is embarking on an ambitious journey to lead consolidation in the self-storage industry from 2024 to 2040. Our strategy focuses on acquiring and partnering with financially sound, independently owned storage facilities. We dedicate ourselves to preserving the unique identity and branding of each acquired facility while providing strategic support to achieve a consistent 30% year-over-year growth rate. Our approach includes implementing comprehensive succession planning and ensuring smooth transitions for all stakeholders over a 3-6-year timeframe.
By the end of 2025, Integrity Storage Group aims to acquire between 1 and 3 facilities, targeting a collective asset value of $5 million to $10 million. Our growth strategy will escalate in 2026, by acquiring 6-8 additional facilities and every year after that, boosting the asset value to over $40 million.
Acquisition Targets per Year
Integrity Storage Group’s exit strategy is to build a valuation between $325 million if sold at a 10 Cap Rate and $650 million if sold at a 5 Cap Rate, emphasizing conservative estimates to under-promise and over-deliver. Self-storage, being classified as commercial real estate, utilizes different calculations and terminology than traditional businesses. The projection for annual revenue is $50 million from 100 facilities, each generating an average of $500,000 in revenue. Instead of using EBITDA and multiples for valuation, self-storage relies on NOI (Net Operating Income) and Cap Rate. With expenses averaging 35% of revenue, the projected NOI of $50 million results in $32.5 million. We project adding a yearly NOI of $2 million to $3 million, culminating in our strategic exit via sale to strategic buyers or an IPO, targeting a company valuation between $325 million and $650 million.
Integrity Storage Group aims to achieve a critical revenue threshold of $50 million annually by strategically acquiring and managing a portfolio of self-storage facilities primarily located in second, third, and fourth-tier markets across select U.S. states. Our approach combines direct operational oversight with the potential for third-party management collaborations to optimize asset value and operational efficiency.
Market Selection and Expansion
Target Markets
Facility Size and Type
Expansion Strategy
Acquisition Criteria
Underutilized Facilities
Value-Add Opportunities
Operational Improvements
Operational Tactics
Technology Integration
Revenue
Financial Strategy
Seller Financing
Investment Returns
Customer Service and Retention
We will invest in training programs to enhance staff expertise and customer interaction. Offer exceptional customer service to differentiate from competitors and foster loyalty.
Board of Directors
Ken Nuehs
- Founder
Ken Nuehs is a seasoned professional with a distinguished background as a Marine Veteran, having completed deployments to Iraq and Afghanistan. The Marine Corps rigorous leadership training has significantly influenced him and continues to benefit him in his current roles. Ken holds a Bachelor’s degree in Business Administration from the University of Phoenix. He has furthered his education by obtaining a Chief Product Officer Executive Scholar Certificate from the Kellogg School of Management at Northwestern University.
Ken has over a decade of experience as a Senior IT & Revenue Growth Consultant, having worked with a diverse range of clients, including Nike, Amazon, BP, Johnson Controls, and United Health Group, as well as various small businesses. Currently located in Spokane, WA, he serves as the founder of Integrity Storage Group. He is responsible for the company’s operational strategy and development, emphasizing excellence and integrity.