Case Study: Financial Analysis of a Modern RV & Boat/Self-Storage Facility
- MMCG
- 13 minutes ago
- 4 min read
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.
1. Introduction & Development Timeline
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.
2. Capital Structure & Credit Profile
Loan Attribute | Detail |
Origination Amount | $2,200,000 |
Origination LTV (Appraisal) | 62% |
Implied LTC (Project Cost) | ~48% (based on $4.6 M cost) |
Current Balance | $2,048,473 |
Interest Rate | 4.15% (fixed) |
Origination Date | May 1, 2021 |
Maturity Date | May 6, 2031 |
Remaining Amortization | 313 months |
2023 NOI / Debt Service | $235,603 / $128,362 → 1.84× DSCR |
Pay Status | Performing |
MMCG Insight: With a low‐leverage capital stack (LTC < 50%) and a seasoned, fixed-rate CMBS loan featuring a healthy 1.8×+ DSCR buffer, Carraway stands in a defensible position against rising rates and potential market dislocations.
3. Revenue Trends & Income-Per-Square-Foot Analysis
Over the past four years, Carraway’s base rent per square foot has exhibited a consistent upward trajectory, reflecting both tightening market supply and active yield-management by the operator.
Year / Period | Base Rent ($/SF) | Other Income ($/SF) | Effective Gross Income ($/SF) |
2021 (YE) | 4.69 | 0.00 | 4.69 |
2022 (YE) | 4.97 | 0.01 | 4.98 |
2023 (YE) | 5.29 | 0.02 | 5.31 |
Most Recent (Q1 ’24) | 5.35 | 0.02 | 5.37 |
Underwritten (Sep 2021) | 5.05 | 0.64 (Vacancy Credit) | 5.69 |
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.
4. Operating Expense Breakdown
A deep-dive into OPEX highlights several levers of margin management and cost pressures:
Expense Category | 2021 | 2022 | 2023 | Q1 ’24 | Underwritten |
Real Estate Taxes | 1.01 | 0.50 | 0.50 | 0.49 | 0.43 |
Property Insurance | 0.17 | 0.19 | 0.28 | 0.28 | 0.16 |
Utilities | 0.12 | 0.15 | 0.18 | 0.18 | 0.12 |
Repairs & Maintenance | 0.07 | 0.11 | 0.14 | 0.14 | 0.08 |
Management Fees | 0.15 | 0.25 | 0.27 | 0.27 | 0.22 |
Payroll & Benefits | 0.01 | 0.32 | 0.37 | 0.31 | 0.12 |
Advertising & Marketing | – | – | – | – | 0.01 |
Professional Fees | 0.07 | 0.08 | 0.08 | 0.11 | – |
General & Administrative | 0.15 | 0.17 | 0.17 | 0.18 | 0.19 |
Total Operating Expenses | 1.75 | 1.77 | 1.99 | 1.96 | 1.33 |
Expense Ratio | 37.35% | 35.56% | 37.44% | 36.46% | 23.41% |
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 $0.14/SF.
Personnel & Management: Management fees and on-site staffing costs (payroll & benefits) now account for ~0.58/SF, versus near zero in 2021 as leasing office staffing was scaled up.
Efficiency Lens: Even with cost inflation, OPEX/SF has only crept ~12% from 2021 to Q1 2024, while EGI/SF has grown ~14%, preserving mid-30% expense ratio margins.
MMCG Insight: The profile exhibits operational leverage, where revenue growth outstrips cost inflation—an archetype of a high-fixed cost, high-margin asset class. Focus areas for further margin expansion include proactive tax appeals, cost-sharing for utilities (e.g., solar investment), and tech-enabled self-service management.
5. Net Operating Income & Capital Coverage
Metric | 2021 | 2022 | 2023 | Q1 ’24 |
Effective Gross Income ($/SF) | 4.69 | 4.98 | 5.31 | 5.37 |
Total OPEX ($/SF) | 1.75 | 1.77 | 1.99 | 1.96 |
NOI ($/SF) | 2.94 | 3.21 | 3.32 | 3.41 |
Capital Expenditures ($/SF) | 0.00 | 0.10 | 0.10 | 0.10 |
Net Cash Flow ($/SF) | 2.94 | 3.11 | 3.22 | 3.31 |
NOI DSCR (×) | 1.62 | 1.77 | 1.84 | 1.88 |
Net CF DSCR (×) | 1.62 | 1.72 | 1.78 | 1.83 |
Occupancy (%) | 97.0 | 97.0 | 97.0 | 97.0 |
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 (1.20–1.25×), 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.
6. Strategic Takeaways & Value-Creation Opportunities
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.
7. Conclusion
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.
May 15, 2025, by a collective of authors of MMCG Invest, LLC, RV & Boat storage feasibility study consultants
Sources: CMBS, Montgomery County Assessor
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