Selling a Self-Storage Facility in Colorado

Property tax is the open question here

Colorado repealed the Gallagher Amendment, which for decades had constrained how residential and non-residential assessment rates moved relative to one another. Since then commercial assessment rates have been set legislatively, and they have been adjusted more than once, sometimes temporarily.

For a self-storage owner that means the property tax line is genuinely less predictable than in most states. A buyer underwriting a Colorado facility has to take a view on where commercial assessment rates settle, and a conservative buyer will price that uncertainty into the offer whether or not they say so.

We would rather be explicit about it. If your assessment history shows something specific — a successful protest, an unusual classification, a recent reassessment already absorbed — that is information which improves our number rather than hurting it, because it removes uncertainty we would otherwise have to price for.

The documentary fee is close to nothing

Colorado charges a documentary fee on real property transfers at a rate so low it is effectively a rounding error, and there is no broader state or local transfer tax of the kind that costs Pennsylvania or Washington sellers real money. A handful of home-rule municipalities levy their own transfer tax, which is worth checking, but for most Colorado sales the closing table is cheap.

Combined with no broker commission, the gap between our gross offer and your net proceeds is narrower in Colorado than in almost any other state we buy in.

Denver absorbed a real wave

Metro Denver took on substantial new storage development, concentrated along the north and east growth corridors and in the Aurora and Thornton submarkets, while older infill areas saw comparatively little. Colorado Springs and Fort Collins have their own supply stories driven by different demand bases — military in the Springs, university and technology in the north.

The mountain and Western Slope markets are a separate proposition again: constrained land, seasonal population, and often no realistic prospect of new competition.

What we look at

Rate trajectory over recent quarters, how much occupancy is concession-supported, and the assessment history. We buy stabilised facilities and lease-up plays both.