I started DXD with the idea that if we could find areas with high rental rates, we could build the most valuable storage properties in the country.

Was I right?

Yes, and no.

Two of DXD’s first projects used this technology, which quickly led us to areas with high rates. That was only part of the equation. We then had to analyze the target and secure parcels zoned for self-storage.

At scale, the heatmap rental rate technology increases our efficiency by ~10%-20%.

I discovered that the real bottleneck was accurate and verifiable zoning data.

Having that would increase our deal-sourcing process by ~70%-80%

The answer isn’t straightforward, but we’ve been building technology internally at DXD that gives us an advantage in answering storage zoning feasibility questions at scale.

The process of solving for storage zoning feasibility is multifaceted.

1. Obtain parcel data across the country.​
   This can be solved by licensing parcel data at scale. This isn’t cheap, but that's the only constraint.
   ​
2. Figure out the zones, overlays, setbacks, FAR (floor area ratio) requirements etc.​
   This was solved by a company that I made a significant equity investment in. They are validating each parcel in the country to understand which zone it belongs to and specifics around the setbacks, FAR, coverage, etc., which don’t exist at scale with any other zoning data provider in the market.
   ​
3. Understand in which zones storage is allowed.

Understanding which zones allow for storage is a complex problem we have a full-time data scientist on our staff to solve. We will likely implement 4-5 different methods to solve this.

Nantucket, MA: A Case Study of Rigid Zoning

Nantucket is one of the most challenging places in the country to build storage.

Not only do we have to ship everything to the island by barge, but there are only a few parcels on the island where you can dream of building a facility.

This trade area has achieved rates north of $400 for 10x10 units–that’s THREE TIMES the national average.

Rates are elevated because the barriers to entry are enormous. As you can see below, there are less than a handful of sites that could even work for storage.

It is likely that this will be the last self storage facility built on the island for the next 30 years, which is why our investor base has activated so quickly to be part of this one.

If you are interested in additional information concerning opportunities with DXD in this Nantucket project or other projects we have in the pipeline, please reply to this email, and I will get you more information.

​
As always, if you have any questions about anything mentioned above, please feel free to reply.

Thanks for reading!

Cory

Co-Founder ​DXD Capital,​ ​Radius+​, ​ManageSpace​

​​