Why Self Storage Conversions Can Beat Ground Up Development with Neil Henderson

A vacant Kmart can sit empty for years. Neil Henderson sees something different: a building shell that may already have much of what a self storage project needs.

Neil and his team at Nomad Capital Group have built a portfolio that includes about 12 syndicated self storage properties, with most involving adaptive reuse. They have converted old retail stores, grocery stores, mills, warehouses, and former Kmarts into climate controlled storage.

Neil walks Dave through a 100,000 square foot Kmart conversion in Danville, Virginia. The deal faced permitting delays, lost bank financing after U Haul bought land across the street, and a storage market that weakened just as the property opened. Despite those challenges, Neil says the property was sold after a 37 month hold and gave investors a slightly better return than originally projected, although there were no distributions during the hold.

Neil also shares what has happened across the storage market as higher interest rates slowed home sales and fewer people moved. He explains why this has hurt lease up rates and pushed storage operators to compete harder on price.

Key Topics and Takeaways

• Why Nomad Capital Group focuses heavily on adaptive reuse
• How an empty Kmart can become climate controlled self storage
• Why conversions can open much faster than ground up projects
• How slower home sales affected demand for storage
• Why some facilities went from roughly 3 percent monthly lease up to about 1 percent
• Why Neil says patience matters for investors in development deals
• Why Nomad has not bought a facility so far in 2026

Guest Information

Neil Henderson is with Nomad Capital Group and is also the host of Truly Passive Income, a podcast with more than 150 episodes at the time of this conversation.

Neil said he is interested in connecting with people who want to learn about passive investing in commercial real estate.

Website:

nomadcapital.us

LinkedIn:

Search for Neil Henderson with Nomad Capital

Podcast:

Truly Passive Income

Call to Action

To learn more about Neil and Nomad Capital Group, visit nomadcapital.us.

Neil also welcomes connections on LinkedIn from people interested in passive commercial real estate investing, whether or not they eventually invest with him.