Case Study: Financial Analysis of a Modern RV & Boat/Self-Storage Facility

Updated: Mar 26

Carraway RV & Boat Storage, Magnolia, TX

In this article, we will examine a typical RV & boat storage facility and analyze its financial performance, expenses, and profitability. Our case study focuses on Carraway RV & Boat Storage-a modern outdoor storage asset-and digs into its revenue trends, cost structure, and debt‐service metrics.

Carraway RV & Boat Storage, a purpose-built outdoor self-storage facility, opened its doors in early 2018 in Magnolia, TX. Conceived to capture growing demand for outdoor vehicle storage in the northwest Harris County submarket, the project comprises:

70,893 SF of gated, aggregate-surfaced storage bays

A 5-acre land platform zoned and improved for RV/boat storage

Ancillary office/amenity building and paved ingress/egress lanes

From the outset, the developer pursued a capital-efficient structure to balance risk and return. In May 2021, a permanent CMBS loan of $2.2 million was placed, sizing the debt at 62% LTV based on a $3.55 million as-complete appraisal. Given an acquisition or total project basis of approximately $4.6 million , the implied loan-to-cost ratio stood near 48% , with roughly $2.4 million of sponsor equity deployed.

MMCG Insight: With a low‐leverage capital stack (LTC < 50%) and a seasoned, fixed-rate CMBS loan featuring a healthy 1.8×+ DSCR buffer, Carraway stands in a defensible position against rising rates and potential market dislocations.

Over the past four years, Carraway’s base rent per square foot has exhibited a consistent upward trajectory, reflecting both tightening market supply and active yield-management by the operator.

Base Rent Growth: From $4.69/SF in 2021 to $5.35/SF in Q1 2024, Carraway achieved a 14% compound lift in base revenues.

Other Income: Nominal “other” dollar contributions (late fees, admin charges) rose from zero to $0.02/SF; parking income remains immaterial.

Vacancy & Collection Reserves: The underwritten model built in a 12.7% loss assumption ($0.64/SF), but actual occupancy has held at 97% , compressing realized loss‐to‐lease below budget and boosting realized EGI.

MMCG Insight: The glide-path of base rent enhancement, paired with occupancy retention above 95%, underscores the facility’s high-barrier, niche positioning and the operator’s dynamic pricing capability.

A deep-dive into OPEX highlights several levers of margin management and cost pressures:

Taxes & Insurance: After a spike in 2021 taxes (post-build assessment), tax load stabilized at $0.50/SF; insurance has ratcheted up in 2023 as carriers price specialty risk.

Maintenance & Utilities: Reflects normalizing routine repairs, gate/lock servicing, and higher utility tariffs; repairs grew from $0.07 to $0.14/SF.

Personnel & Management: Management fees and on-site staffing costs (payroll & benefits) now account for ~0.58/SF, versus near zero in 2021 as leasing office staffing was scaled up.

Efficiency Lens: Even with cost inflation, OPEX/SF has only crept ~12% from 2021 to Q1 2024, while EGI/SF has grown ~14%, preserving mid-30% expense ratio margins.

MMCG Insight: The profile exhibits operational leverage, where revenue growth outstrips cost inflation-an archetype of a high-fixed cost, high-margin asset class. Focus areas for further margin expansion include proactive tax appeals, cost-sharing for utilities (e.g., solar investment), and tech-enabled self-service management.

NOI Growth: A steady climb from $2.94/SF to $3.41/SF (16% increase) underscores the property’s healthy margin improvement.

DSCR Cushion: Current NOI coverage sits at 1.88× , well above typical lender thresholds (1.20 to 1.25×), delivering a 63% debt service cushion .

Capital Reserves: A recurring $0.10/SF capex reserve ensures doors and gates remain in turnkey condition, underpinning long-term value.

MMCG Insight: The combination of predictable cash flows, robust DSCR, and resilient occupancy creates a defensible investment thesis-self-storage remains counter-cyclical in economic downturns, delivering steady yield to stakeholders.

Margin Enhancement: Pursue further expense rationalization via tax appeals, bulk insurance procurement, and solar-offset utility savings.

Revenue Upside: Explore remote kiosks, dynamic pricing software, and ancillary service add-ons to lift other income above the token $0.02/SF.

Refinancing Potential: With LTV at ~61% and strong DSCR, the facility is well-positioned for a rate arbitrage refinance or mezzanine wave to monetize basis.

Portfolio Scalability: Leverage operating platform to roll out multiple facilities in adjacent infill submarkets, capturing scale economies in management and procurement.

Carraway RV & Boat Storage exemplifies a modern self-storage playbook: strategic site selection, disciplined capital structure, and operational rigor have combined to drive consistent year-over-year growth in revenue per square foot, maintain sub-40% expense ratios, and deliver a debt service coverage well above market covenants. As the property matures, value-creation levers-particularly in cost optimization and digital customer experience-promise to further elevate returns, cementing its standing as a high-quality, cash-flowing real asset. RV and boat storage development economics are explored further in our RV storage feasibility study .

May 15, 2025, by a collective of authors of MMCG Invest, LLC, RV & Boat storage feasibility study consultants

Sources: CMBS, Montgomery County Assessor