When evaluating self-storage facilities for sale, you might come across financial projections labeled as "pro-forma." These projections often present an idealized version of the property's financial performance, which can be misleading. Let's delve into the pitfalls of relying on pro-forma numbers and how they can lead to costly mistakes.

An Inaccurate Representation

Pro-forma numbers often paint an unrealistic picture of a property's performance. While they aren't illegal, they can create a false sense of potential and current conditions. For instance, a self-storage facility with a current occupancy of 70% might be shown with projected revenues based on 100% occupancy, only to subtract the vacancy later. This method can trick you into thinking the property has more potential than it actually does, especially in markets where high vacancy rates are the norm.

A Tool to Mislead Buyers

Sellers often use pro-forma numbers to present an overly optimistic view of the property. While some might argue that these numbers reflect what could be achieved under ideal conditions, many sellers use them to entice buyers into overpaying. It's akin to advertising fitness equipment with images of perfect physiques, suggesting that you too can achieve such results, which is rarely the case. This tactic can lead to overvaluing the property and making a poor investment decision.

Concerns for Lenders

Lenders prefer accurate and current financial data over optimistic projections. When buyers present pro-forma numbers to lenders, it raises red flags. Lenders and appraisers rely on actual performance metrics to assess a property's value and risk. Submitting pro-forma financials can lead to misunderstandings and complications in securing financing. It's crucial to base discussions and analyses on real, verifiable numbers to avoid misleading anyone involved in the acquisition process.


Navigating the financials of self-storage facilities is challenging enough without the added confusion of pro-forma projections. When evaluating a property, focus on its current performance rather than idealized projections. Disregard pro-forma numbers in favor of actual financial data to make informed decisions and avoid potential pitfalls. Remember, realistic assessments lead to better investments and fewer unpleasant surprises down the road.

By Frank Rolfe

Frank Rolfe has been an active self-storage investor for around two decades, with self-storage units in many states throughout the U.S. His nuts and bolts knowledge of what makes for a successful self-storage facility has led to a three-decade career without a single failed property.