Overview of Masters in Business with Bob Moser
This episode of Masters in Business (host Barry Ritholtz, Bloomberg) profiles Bob Moser, founder and CEO of Prime Group Holdings — the largest privately held self‑storage owner/operator in the U.S. Moser traces his start as a college real‑estate hustler to building a fund business focused on off‑market consolidation of fragmented, need‑based real‑estate assets (especially self‑storage). The conversation covers origin story, underwriting and sourcing methodology, operational advantages of self‑storage, technology initiatives, fundraising and capital strategy, and macro/sector outlook circa 2026.
Key takeaways
- Prime Group specializes in off‑market consolidation of self‑storage assets using proprietary data/AI and persistent direct outreach to owners.
- Self‑storage is a defensive, cash‑flow driven asset class: low breakeven occupancy (~40%), month‑to‑month leases, and low tenant‑improvement costs.
- Prime differentiates by trading some occupancy for higher top‑line revenue, heavy operational play, and rapid value creation through unit mix, rent optimization and ancillary services.
- The firm buys primarily cash‑flowing assets (limits construction risk), prefers markets with barriers to entry (coasts, mountain cities) and avoids areas with cheap, open zoning (e.g., parts of Texas).
- Prime has scaled via commingled funds (started 2015) and deep bank relationships; Fund 3 was a headline large raise (~$2.5B reported).
- Tech innovation (batteryless electronic locks tied to phones) reduces labor and improves customer experience and security.
- Long time horizon and active operations are central — “real estate is boring for the first 30 years” and patience compounds value.
Bob Moser — background and origin story
- Early start: real‑estate license in high school/college; Union College degree in economics with a thesis on valuing income‑producing property (hedonic/non‑hedonic regressions).
- Used Freedom of Information requests (mid‑1990s) to obtain permitting/asset lists (self‑storage, mobile home parks, RV parks, marinas) and cold‑called owners.
- First deals: brokered and then bought assets (initially financed in part via parents’ home‑equity loan). Sold portfolio pieces to Sam Zell in 2005, creating liquidity to scale acquisitions.
- Transitioned to self‑storage after 2007–08: storage held up better than other assets during the crisis, showing defensive qualities.
Prime Group: business model & strategy
- Focus: off‑market acquisition, active operations, value creation at asset level.
- Sourcing: proprietary software/AI that filters ~60,000 U.S. self‑storage facilities by Prime’s buy box; deal teams (≈36 people) then call/visit owners until conversion — many deals are worked for years.
- Acquisition profile: buy cash flow on day one; avoid construction risk; high underwriting threshold via investment committee.
- Value creation levers: rent‑roll optimization, unit mix/layout changes, ancillary revenue streams, tenant protection programs, operational efficiencies, and tech upgrades.
- Competitive positioning: differs from REITs (e.g., Public Storage, Extra Space, CubeSmart) by prioritizing top‑line revenue management over strictly keeping occupancy artificially high; also competes with U‑Haul on some fronts.
Why self‑storage works (unit economics & demand drivers)
- Low breakeven: around 40% occupancy covers operating costs.
- Lease flexibility: month‑to‑month leases allow fast pricing/occupancy adjustments.
- Low turnover cost: minimal unit rehab vs. residential/office.
- Dual demand: residential (downsizing, apartment living) + business (30–40% of units used by small businesses—contractors, landscapers, reps—as mini‑warehouses).
- Ancillary services: tenant protection insurance, extended access, premium services, online auctions (virtual), and other revenue add‑ons.
Sourcing & acquisition process (operational detail)
- Data → Allocation → Persistent outreach: load targets into AI tool → assign to regional deal teams → systematic calls/visits (every 30–45 days) → problem‑solving pitch for sellers (tax, proceeds, transition).
- Off‑market focus reduces auction “winner’s curse” and enables better returns through underestimated seller issues.
- Scale: Prime closes ~6–7 deals per month; heavy upfront diligence costs per deal are part of the strategy.
Technology & operational innovation
- Batteryless electronic locks: harness phone energy to open units, enable audit trails, remote disabling for non‑payers, shareable temporary keys — reduces labor and improves security.
- Auctions moved online to avoid on‑site traffic/PR issues.
- Emphasis on simple, scalable operational improvements rather than speculative or aspirational real estate plays.
Capital, funds and financing
- Funds: started a commingled fund program in 2015; growth from a $154M test fund to larger funds (Fund 2 ≈ $725M; Fund 3 ≈ $2.5B reported).
- Financing approach: prefer relationships with institutional lenders; careful debt structuring and interest‑rate hedging (5‑year debt tenor commonly used in funds).
- Goal: early free‑cash‑flow distributions in funds by buying income‑producing assets.
Competition, geography, and expansion
- Competitors: REITs (Public Storage, Extra Space, CubeSmart), U‑Haul, regional developers (merchant builders).
- Geography: concentrated on U‑shaped footprint — coasts + mountain cities; avoids markets with lax zoning that reduce barriers to entry.
- International: evaluating Europe and Australia but cautious where inventory is already institutionalized (less opportunity to buy one‑offs and add value).
- Office-to‑residential conversions: Prime is exploring conversions and “high‑tech” storage concepts in urban areas (e.g., West Chelsea/high‑line projects).
Outlook (2026) and risks
- Macro: expects rates to moderate (watch five‑year as a key benchmark). Lenders favor relationship borrowers; capital available but choosy.
- Resilience: storage is defensive vs. other CRE; demand supported by demographic shifts (delayed homeownership, apartment living, small business needs).
- Risks: oversupply from merchant builders in some markets, state legal variations for lien/auction processes, interest‑rate shifts, and competition as the asset class consolidates.
Notable quotes
- “Self‑storage has the lowest breakeven occupancy of any institutional real‑estate asset class…at 40% occupied you’re breaking even.”
- “Real estate is boring for the first 30 years.”
- On sourcing: “We want to know more about the asset than the owner does…we hold their hand through the process.”
Practical recommendations for investors & operators
- Consider self‑storage for defensive, inflation‑resilient exposure with dual residential/business demand.
- Focus on markets with barriers to entry (constrained supply, predictable traffic patterns).
- Prioritize off‑market sourcing and operator skill — competition for brokered listings inflates prices.
- Emphasize operational optimization (unit mix, rent optimization, ancillary services) over speculative construction.
- Use technology to reduce labor and enhance customer experience (locks, digital audit trails).
- Adopt a long‑term holding mentality — real value often accumulates beyond typical 3–5‑year horizons.
Quick facts & metrics mentioned
- Prime Group Holdings: >350 locations across 28 U.S. states + Canada + U.S. Virgin Islands; ~ $10B+ assets acquired cited.
- Employees: ~700–800 nationwide.
- Offices: Saratoga Springs (HQ), Jupiter (FL), West Chelsea (NYC).
- Deal cadence: ~6–7 acquisitions per month (mostly off‑market).
This summary captures the episode’s main themes: Prime’s disciplined, relationship‑driven off‑market strategy; why self‑storage is an attractive, defensive real‑estate class; and the operational, technological and capital approaches Moser uses to create scalable returns.