Development at Cost. Optionality at Exit.
Self-Storage Investment Strategy
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Development at Cost. Optionality at Exit.
This presentation is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any interests in a venture or any other securities. Any such offer will be made pursuant to formal offering materials. Any investment in Ranch Water Capital L.L.C. and the co-development strategy will involve significant risks and investors must have the financial ability and willingness to accept the risks.
The securities of the Partnership involve a high degree of risk and investors should not invest any funds unless they can afford to lose their investment. Any and all proceeds received by the Partnership will be immediately at-risk and available for the Partnership's use. Accordingly, any investment will be immediately subject to all of the uncertainties and risks applicable to the Partnership's business, regardless of whether the Partnership is able to fully fund its co-development strategy. The Partnership interests are subject to transfer restrictions and investors should be aware that they will be required to bear the financial risks of an investment for an indefinite period of time.
There can be no assurance that the investment objectives of any capital managed by Ranch Water Capital L.L.C. will be achieved or that its historical performance is indicative of the performance it will achieve in the future. Performance is not audited and is subject to change upon audit. Performance data may differ upon a number of factors including actual fees paid.
No federal or state securities regulatory authority has recommended the Partnership investment or determined the accuracy or adequacy of the information in this presentation. By accepting delivery of this presentation, each recipient agrees that this presentation is not to be reproduced or used for any purpose other than evaluating a possible investment in the Partnership and that all information contained herein that is not already in the public domain will be kept confidential.
This presentation may include forward-looking statements that reflect the Partnership's current views with respect to future events and expected financial performance. Any forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially. These include potential changes in the legal environment or government policies; catastrophic events; loss of key individuals; changing interest rates and economic conditions; and other factors that may affect commercial real estate markets and property values generally.
Ranch Water Capital L.L.C. does not warrant the accuracy, adequacy, completeness, timeliness or availability of any information provided from external sources, and none of its partners, officers, employees or agents assume responsibility for such information.
Ranch Water has tracked the national rate and supply cycle monthly since 2018 across a proprietary longitudinal dataset built on Yardi Matrix. The conclusion is not a hope about demand — it is arithmetic about supply: the earliest-stage development pipeline has collapsed 42% from its 2023 peak, planned projects are stalling at record rates, and national deliveries are forecast to fall by roughly a third by 2028. Because pipeline leads completions by three to five years, the post-2028 supply environment is effectively set today — projects underwritten in 2026–2027 deliver into it, at a basis priced by today's caution.
The 2022–2025 downturn is on the page, not hidden. The same supply wave that drove the −4.9% trough pressured the program's 2022–2023 development vintages, disclosed asset by asset in the Track Record section — and the deceleration since is the leading edge of the recovery. Base case: sustained positive national YoY by Q1–Q2 2027, driven by the supply decline in Exhibits B and C rather than by a demand assumption.
Prospective pipeline predicts completions 3–5 years out. The 42% collapse — the deepest in the eight-year dataset — locks in a favorable post-2028 supply environment regardless of near-term rates or demand. Behind it: planned projects now average 610 days in planned status (~250 pre-pandemic), and monthly project abandonments run at five to seven times the 2022 baseline.
Development is bought today and sold into 2028–2030. Projects started in 2026–2027 deliver into the lowest new-supply environment in a decade — the gold bars — while land sellers, contractors, and lenders are still pricing to the trough. Waiting for the recovery to be visible means starting later and delivering into the next supply wave.
Source. Yardi Matrix national monthly rate surveys and quarterly supply-forecast bulletins, June 2018 – June 2026; longitudinal series and analysis by Ranch Water Capital across 23–31 metro markets. Rate series reflects non-climate-controlled street rates, year-over-year; the Aug 2022 – May 2023 segment (dashed) is interpolated across a Yardi methodology change. Delivery forecasts are Yardi Matrix projections as of Q2 2026 and are subject to revision; forecast years marked (ᴾ).
Method. Pipeline-stage analysis tracks prospective → planned → under-construction → completed inventory; historical lead-lag between pipeline inflections and rate responses across two full supply cycles underpins the recovery timeline. Full methodology and the underlying market-level dataset are available in diligence.
Storage, as an asset class, has numerous inherent advantages compared to other types of real estate and these advantages remain present in any investment environment. Because of this, storage has increasingly become an institutionally favored asset class — but also one that is difficult in which to invest at scale given the smaller average deal size.
Institutions such as pensions, endowments, insurance companies and REITs are typically looking to deploy significant amounts of capital in a single transaction. Because of this, they seek out opportunities of a certain scale, which in storage can only be accomplished through the purchase of a portfolio. Due to the scarcity of large portfolios in the storage sector, both the sourcing of scale and the generation of excess returns through high-quality, well-located assets remain a persistent challenge for institutional capital.
Using a network of third-party development sponsors, and by recapitalizing projects upon stabilization rather than selling them, Ranch Water's principals will aggregate a portfolio of high-quality, institutional assets in strong markets at a basis generally unattainable through acquisition at or after stabilization. Optionality on portfolio sale or long-term hold then exists for Ranch Water and its capital partner. Upon stabilization, the venture retains full optionality — an early sale into a strong market, individual asset sales, a bulk portfolio sale, or a strategic recapitalization and hold — with the capital partner approving every disposition.
Partner with established third-party sponsors to develop institutional-grade facilities in high-barrier markets. Manage the risk of development and lease-up to achieve a cost basis that could not be attained through acquisition at or after stabilization.
Upon delivery, leverage technology and apply institutional asset management capabilities to maximize returns. Utilize third-party operators such as Extra Space, CubeSmart and Public Storage for management.
Rather than be a forced seller upon stabilization, the venture can crystallize the developer's promote through an arm's-length valuation and, when the debt market supports it, refinance to recover equity. Where accretive, excess proceeds may buy out the developer — consolidating ownership without additional LP equity.
The venture exits where the market pays full value. In a strong market, sell early into lease-up or upon stabilization; in a softer one, hold and aggregate toward a portfolio sale that can command a premium for scale — sparing an institutional buyer the time and labor of assembling it themselves. Never a forced seller, never a forced holder.
At the top of the cycle, capital floods the sector and stabilized assets trade well above replacement cost; at the bottom, quality assets are withheld and acquisitions go quiet. Developers are structurally indifferent: they build at "cost" in every environment, underwriting to a spread — typically 250–300 bps between stabilized yield-on-cost and exit cap rates. That basis advantage is difficult to replicate through acquisition at any point in the cycle — and it is widest today, when land and construction are priced by a market in retreat (see Market Context).
The development pipeline peaked in 2023–24, and national deliveries are forecast to decline through a 2028 floor (see Market Context). Most investors respond to a downturn by rotating from development into acquisitions, waiting for distress that storage rarely delivers: the sector is sophisticated and efficient, assets seldom trade below replacement cost, and when one does, something is usually wrong with the asset or its market. Those same investors rush back into development only after the recovery is obvious, jumping from top of market to top of market — and underperforming accordingly. Ranch Water holds one strategy across the entire cycle. The discipline that passes on top-of-market deals is the same discipline that stays active at the bottom, where the deals that outperform are made. The program is built for a capital partner who underwrites the cycle the same way.
Even the most accomplished developers complete only a handful of projects a year, making storage difficult to scale through any single relationship. Partnering across a stable of qualified sponsors gives the venture access to a far larger, continuously refreshed pipeline — the raw material that disciplined selection requires. That breadth comes at the cost of a second layer of promote. We view that cost as reasonable for what it provides: an experienced principal sourcing, screening, and underwriting every opportunity on the investor's behalf, long-standing developer relationships that surface deals before they reach the broader market, and the conservative underwriting discipline that shapes outcomes far more than an incremental promote does. The incremental cost is modest relative to the access and discipline it secures.
In acquisitions, winning often requires either the cheapest capital or the most aggressive assumptions. Development rarely involves bidding against other capital, so the sponsor seldom has to sharpen its pencil to win a deal — allowing for conservative, fundamentals-based assumptions across every underwriting variable without pressure to price to perfection.
The fundamentals that define a Core asset — access, visibility, population, incomes, and barriers to entry — cannot be bought at anything close to opportunistic returns. Acquired after development, these properties would price as Core or Core-Plus and return accordingly. Development in those same markets, where zoning is onerous and land is scarce, earns opportunistic returns precisely because the barriers that make the locations expensive to buy also limit new competition. Development is how the venture holds Core locations at an opportunistic basis — the rare case of having your cake and eating it too.
Four structural requirements remove most construction risk before the venture funds a dollar. First, construction costs are based on substantially complete Construction Drawings, and every deal closes with a GMAX contract in place. Second, projects close with conservative, longer-term construction-to-permanent debt already arranged, so delivery never depends on a refinancing window. Third, the venture is structured so the development sponsor bears primary responsibility for cost overruns, with its development fee in first-loss position for anything controllable. Fourth, healthy hard-cost and soft-cost contingencies are underwritten into every budget. What remains — lease-up, operations, rental rates, and exit — are the same risks an acquisition carries, taken here at a development basis for substantially higher returns.
Ranch Water sources, underwrites, and asset-manages; the capital partner approves every project closing, budget, financing, and sale. Capital is committed one deal at a time, so the partner sees each project on its own merits and holds a consent right over every material decision: closing, budgets, financing, refinancing, and disposition — including how and when the venture exits.
Sell into a strong market during lease-up, ahead of stabilization, with the buyer paying for the remaining upside.
Exit assets one at a time as each reaches its own economic stabilization and pricing window.
Sell a stabilized group together, where scale can attract portfolio-level pricing.
Refinance into permanent debt and continue to own when the credit market supports it.
Never a forced seller, never a forced holder — and never the GP's call alone.
Construction risk sits with the developer, not the venture. Each project is built with an operating partner who takes real risk alongside the venture's equity: co-invested capital, first-loss exposure on controllable overruns, and every construction guarantee.
The developer contributes a minimum of 10% of the equity — often more — and carries every construction-loan completion and repayment guarantee. The venture and its capital partner participate as controlling, but non-recourse, investors.
Developer funds ≥10% of project equity, invested pari passu, with its development fee in first-loss position for controllable overruns.
Completion and repayment guarantees rest entirely with the developer, insulating the venture from build risk.
The developer is on the hook to deliver on time and on budget before earning any promote.
Structure. The venture is a programmatic joint venture, not a discretionary commingled fund and not a syndication. Capital is committed in tranches over the investment period; projects are crossed within a tranche for distribution purposes, so returns are pooled across that tranche rather than isolated deal by deal.
Consent. Major matters — project closing, capital structure, budgets, capex, financing, refinancing, and disposition — are subject to capital-partner approval. Ranch Water works exclusively for the venture during the investment period. Leverage is capped at 65% of cost, with any exception requiring partner approval.
Structural terms are summarized for discussion and are qualified in their entirety by the definitive venture agreement and related transaction documents.
Ranch Water's pipeline is deliberately wide and its filter deliberately narrow. Every opportunity is logged, dated, and underwritten against the same standalone criteria — no deal advances on portfolio logic, momentum, or relationship pressure — and roughly one in thirty closes. The capital partner sees only work that has survived the screen, and still holds the final pen: five of twelve recommendations to date were declined, and the program proceeded without friction. The funnel is a machine, not a history: sourcing has continued at full cadence through the market trough.
declined by the capital partner — consent rights exercised in practice, not on paper. The partner's "no" is real, and the program continues on constructive terms after every one.
Bar widths illustrative, not to scale. Screened volume is a management estimate; all other figures per the internal pipeline log.
Roughly half of all passes trace to new supply in the pipeline or too much existing competition in the trade area. It is the primary screen, hard-coded after the program's first vintage: one new trade-area competitor is disqualifying.
Population, incomes, or achieved rates that can't justify institutional-grade, climate-controlled development — regardless of how well the deal pencils on paper.
Land price, construction cost, or taxes that push basis past what conservative rents and exit assumptions can carry. No deal is stretched to fit.
Developers without the balance sheet, track record, or temperament to carry construction guarantees and meaningful co-investment through a full cycle.
The filter is the product: the seven deals that closed are defined by the 220 that didn't.
Source. All counts, capitalization, and equity figures computed from Ranch Water's internal pipeline log as of June 19, 2026, which records every opportunity with dated underwriting notes. Screened volume (~70/year) reflects total inbound and sourced opportunities, including those that did not warrant a log entry. The log is proprietary and is not distributed; it can be reviewed in a controlled setting, with counterparty identities redacted, as part of confirmatory diligence.
Pass-reason shares are management's approximate classification of pass rationales recorded in the log; individual deals often present multiple disqualifying factors.
Most institutional capital treats developer economics as a place to win the negotiation. Ranch Water treats them as the price of the only thing that actually constrains this strategy: proprietary, repeating deal flow from the small set of developers capable of institutional-quality work. The structure below is deliberately positioned at the developer-friendly end of the institutional market — and every return target in this presentation is already net of it.
You can shear a sheep many times, but you can only skin it once.
The economics are asymmetric. A hundred basis points of pref or a friendlier split is rounding error to a limited partner's net returns — but to a developer behind that preference, whose margin lives in the promote, it is the difference between a good business and a marginal one. Ranch Water gives ground where it costs little and matters enormously.
The payoff is the funnel. Roughly 140 developer relationships have produced 227 underwritten opportunities, because developers show their best work to the capital they most want to work with — and come back. Five developers account for the seven closed projects; repeat business is the proof.
The protection is cyclical. Less capital chases development today and the LP holds the leverage; that pendulum always swings back. Developers stay where they were treated fairly in the trough — so the venture's deal flow survives the part of the cycle where most programmatic capital loses its pipeline to a marginally better term sheet.
Most venture agreements handle overruns with a blunt instrument: the developer eats them, forever, even when the deal ultimately outperforms. That breeds resentment in success and concealment in trouble. Ranch Water engineered two mechanisms that keep accountability intact while keeping incentives aligned in both directions:
The developer funds controllable overages out of pocket — from unpaid development fee and retainage — with no relief from the venture. But if the project still clears the 18% venture IRR the capital partner targets, the developer may recoup those amounts from distributions above that threshold. The mistake is paid for in full; the punishment isn't permanent on a deal where the investor won anyway.
Overruns beyond available contingency that neither party controls are funded pari passu as a partnership loan accruing at 18% — repaid before any other returns. Every incremental dollar earns the capital partner's target rate first, the developer's promote throttles down automatically, and the developer participates in the same 18% on the capital it contributes. The LP's target is protected by construction, not by negotiation.
The top-heavy promote and the overrun-excluded fee base point the same direction: the developer's richest outcomes come from delivering under budget and leasing fast — precisely the outcomes the venture wants. Two recent projects delivered on time and meaningfully under budget; both are marked above their original underwriting.
No amount of promote friendliness moves a single dollar of construction risk to the venture: the co-invest stays at risk, the guarantees stay with the developer, and every major decision stays behind the capital partner's consent.
Attractive terms widen the top of the funnel; the filter still closes ~3% of it. The venture pays developer-friendly economics only on the deals that survive 227-to-7 selectivity — the structure buys looks, not obligations.
Sharing in pre-development costs — pursuit, entitlement, and design — lets developers chase higher-barrier, entitlement-heavy projects: costlier and slower to start, but structurally protected from the very supply competition this strategy screens against. Few LPs will fund the risk that creates the least-contested deals.
Participating in completion or repayment guarantees — for a fee — reduces the guarantee burden that caps how many projects a quality developer can carry at once. A capital partner willing to price that support wins deal flow no term sheet can match, and is compensated for it.
Neither is required by the strategy or assumed in any return target — they are levers a differentiated partner can choose to offer as the relationship matures.
Basis of presentation. Developer economics shown are Ranch Water's standard program offering, including the cost-overrun mechanisms, and are qualified in their entirety by each project's venture agreement. All vehicle-level and capital-partner return targets elsewhere in this presentation are stated net of all developer economics shown here.
With over 20 years of commercial real estate experience at some of the most respected companies in the U.S. and having spent the past four years establishing the Ranch Water Capital self-storage platform, Jason W. Haby is positioned to grow and scale this co-development investment strategy. This is evidenced by a strong historical track record and a current portfolio of seven institutional-quality assets in highly desirable markets.
Using past experience and knowledge from working in real estate private equity and banking, all investments are sourced and underwritten with an institutional perspective, focused on the objectives of the underlying investors. With an eye towards conservative underwriting principles, management seeks to maximize profitability and consistently mitigate risk in generating its returns.
With many years of experience in self-storage, Mr. Haby maintains strong relationships throughout the industry with access to brokers, appraisers, operators, third-party managers, contractors, developers and investors. These sources provide invaluable market knowledge used in the evaluation and underwriting of specific investments and serve as a source of both marketed and off-market deal flow.
The opportunity to oversee the management of multiple properties in different market environments and in all phases of the investment life cycle has provided a true understanding of how properties operate and perform. This results in more accurate underwriting of future opportunities and an ability to extract maximum value upon sale while quickly recognizing faulty or overly optimistic developer assumptions.
Every developer is offered the same deliberately generous standard structure — a pari passu preferred return, top-heavy promote tiers, and engineered cost-overrun mechanics that preserve accountability while aligning incentives in both directions. This offering, detailed in The Developer Proposition, attracts and retains the program's development partners and secures repeat deal flow — and every investor return target in this presentation is already net of it.
Mr. Haby maintains long-standing working relationships with a vast network of storage developers across the country. These third-party developers all require outside equity financing to pursue their pipeline of projects and, although subject to a "Double Promote" scenario, the opportunities brought forth still allow for potential above-average returns while increasing the scale of operations and preserving portfolio-scale optionality at exit — a premium the venture deliberately excludes from its return targets.
| Construction Timeline | A few additional months are typically added to the developer's timeline, perhaps even more for complicated projects in difficult municipalities or areas with harsh winter conditions. |
| Construction Budget | Deals must close with a GC contract in place based upon substantially complete CDs. Appropriately sized HC and SC contingencies are added to the budget, and the developer is held contractually responsible for controllable cost overruns by placing all or a portion of its development fee in a first-loss position. |
| Starting Market Rate | Market rates are derived through a "mosaic" process where information from data sites (Radius Plus, StorTrack, Tract IQ, etc.), achieved rate information from REIT operators, and operating projections from multiple REIT managers are combined. The average rate for all facilities in the trade area is used, knowing that what is being developed will be "above average." |
| Rate Growth | Many developers use aggressive rate growth assumptions citing historical trends and the ability to push ECRIs. It is more conservative to use an inflationary 3% annual growth rate, which sets the upper bounds that cannot be exceeded. |
| Leasing Velocity | Underwriting assumes no less than 36 months for physical stabilization (vs. the 24–30 months many REIT operators project), plus an additional 12-month period to allow discounts to burn off and reach economic stabilization, plus an additional 12 months of hold period to let the rent roll fully "season." Storage trades on trailing NOI, not forward NOI. |
| Stabilized Occupancy | Most REITs project stabilized occupancy around 92%–93%. Historical occupancy for storage has always been around 90%, so underwriting uses a 10% loss factor. This conservatively puts stabilized economic occupancy around 85% at disposition. |
| Debt Terms | Deals are required to close with a construction loan in place so that exact debt terms can be underwritten. For floating rate deals, the 1-month SOFR forward curve plus a cushion of an additional 50 bps is used, with a push for 36–48 months of interest-only period. |
| Exit Cap Rate | Underwritten exit cap rates are typically 25–50 bps higher than both developer assumptions and current market — purely as an extra layer of safety. All deals are underwritten on a stand-alone basis and do not consider the potential cap rate compression from a portfolio sale, which could realistically generate an additional 25–75 bps of premium. |
| Total Vehicle Equity | ~$60 Million (incl. 5% GP Co-Investment) |
| Investment Period | 3 Years |
| Tranche Structure | Three tranches of ~$20M; investments crossed within each tranche for distributions |
| Vehicle Term | 8–10 Years |
| Origination / Underwriting Fee | 100 bps on total deal capitalization |
| Asset Management Fee | 1.0% per annum of funded equity |
| Preferred Return | 9% (Pari Passu) |
| Carried Interest | 15% to GP over 9% IRR; 25% to GP over 14% IRR; 35% to GP over 18% IRR |
* Return targets are based on conservative underwriting assumptions and do not include any potential premium associated with a portfolio sale, which could realistically generate an additional 25–75 bps of cap rate compression in the right capital markets environment.
Terms shown are the sponsor's proposed framework, presented for discussion; final economics are expected to be refined in negotiation and are qualified in their entirety by the definitive venture agreement. Bridge is illustrative at target gross returns, assuming a ~5.8-year weighted hold, equity of approximately 37% of total capitalization, asset-management fees through the full hold, and the promote waterfall shown above applied at the tranche level; actual results will vary with deal timing, leverage, and interim cash flows.
Before founding Ranch Water, Jason Haby led the sourcing, underwriting, and asset management of fourteen storage developments and conversions at Crow Holdings Capital across five MSAs. All fourteen are realized, thirteen at a profit. The summary below is provided as background on the principal's institutional training; the program's own record follows, and full investment-level detail on the prior experience is available in diligence.
Attribution. Performance was achieved by Mr. Haby while at Crow Holdings Capital (2015–2019), where he led the sourcing, underwriting, and asset management of the investments summarized. Figures are gross of fund-level fees and carried interest and reflect all development and conversion investments Mr. Haby led — including one realized below cost — with stabilized acquisitions and two investments unrealized at his departure excluded by category. These investments were made with Crow Holdings Capital's capital, team, and resources; they were not managed by Ranch Water Capital and are not representative of Ranch Water's performance. Crow Holdings Capital has not reviewed or endorsed this presentation. Investment-level detail is available in confirmatory diligence.
Seven Class-A developments built since February 2022 alongside third-party developers under a programmatic venture with an institutional capital partner. All seven are at or ahead of underwritten physical lease-up. Achieved rates lag day-one underwriting across the 2022–2023 vintages — an industry-wide effect of the post-COVID shift to a heavy-discounting, heavy-ECRI operating model — which our underwriting anticipates through a dedicated economic-stabilization period before rent-roll seasoning.
| City | MSA | NRSF | C/O | Occ. | Physical Status |
Equity ($M) | Total Cap ($M) |
Yield-on-Cost | Exit Cap |
Underwritten @ Close | Current View | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Venture | Dev. | Untr. | Stab. | IRR | MOIC | IRR | MOIC | ||||||||
| Grayson | Atlanta | 88,025 | Apr 2023 | 83.6% | Ahead | 4.6 | 0.5 | 12.8 | 8.0% | 9.2% | 5.50% | 18.4% | 2.6x | 7.2% | 1.4x |
| Marietta | Atlanta | 85,360 | Sep 2023 | 89.1% | Ahead | 4.6 | 0.5 | 12.7 | 7.6% | 8.5% | 5.50% | 17.7% | 2.5x | 17.6% | 2.7x |
| Columbia | Columbia, SC | 84,162 | Dec 2024 | 56.9% | On Track | 3.7 | 0.4 | 11.9 | 7.6% | 8.6% | 5.75% | 17.5% | 2.3x | 13.7% | 2.2x |
| Denver1 | Denver | 92,538 | Jul 2025 | 91.7% | Ahead | 9.1 | 1.6 | 24.3 | 6.1% | 7.7% | 5.00% | 16.8% | 2.2x | 11.1% | 1.8x |
| Nashville2 | Nashville | 90,250 | Oct 2025 | 34.1% | On Track | 6.6 | 1.6 | 18.3 | 8.7% | 10.0% | 5.75% | 16.3% | 2.5x | 18.4% | 2.5x |
| Charleston | Charleston | 86,025 | May 2026 | 3.9% | In Lease-Up | 4.3 | 0.5 | 13.7 | 7.7% | 8.7% | 5.75% | 17.5% | 2.6x | 19.0% | 2.8x |
| Falmouth | Portland, ME | 70,975 | TBD | — | Under Constr. | 4.8 | 1.0 | 15.8 | 8.2% | 8.9% | 6.25% | 17.6% | 2.4x | 17.6% | 2.4x |
| Portfolio — 7 Developments · 6 Markets · 597K NRSF | 37.8 | 6.2 | 109.5 | ~7.7% | ~8.8% | ~5.6% | 17.3%▲ | 2.42x▲ | 14.7%▲ | 2.21x▲ | |||||
Financing. Grayson — United Community Bank · permanent · fixed 6.00% · 41.1% LTC. Marietta — United Community Bank · permanent · fixed 6.00% · 57.9% LTC. Both refinanced March 2026; LTC reflects the fully funded loan against equity contributed at refinancing. Columbia — United Community Bank · construction-to-permanent · fixed 6.88% · 60.0% LTC. Denver — Wintrust Bank · construction-to-permanent · floating SOFR+300 · 55.2% LTC (refinancing in process). Nashville — Old National Bank · construction-to-permanent · floating SOFR+315 · 56.2% LTC. Charleston — Old National Bank · construction-to-permanent · floating SOFR+290 · 64.9% LTC. Falmouth — Franklin Savings Bank · construction-to-permanent · floating Prime+0 · 64.1% LTC. Construction-to-permanent LTC is measured at loan closing against the construction budget attached to the loan documents. Every facility closed at or under the venture's 65% loan-to-cost cap; developers carry all completion and repayment guarantees.
1 Denver — the portfolio's highest-basis, best-located asset; conviction warranted the tightest exit cap. Current view reflects identifiable, largely external friction: an 11-month schedule extension and ~$289K of cost above contingency driven by municipal permitting and construction requirements; modestly higher operating costs; and a later exit that places the stepped-up Denver County tax assessment inside the capitalized trailing year — a timing effect of the longer hold, not a market markdown (rents and exit cap held at original underwriting). The lender reduced leverage from 62.5% to ~55% and increased interest reserves in a dislocated early-2023 debt market; conservative leverage was accepted to hold the land-contract closing. Currently refinancing with the same lender — a near-term catalyst to recover trapped equity. Physical stabilization in 11 months of operation, well ahead of underwriting.
2 Nashville — returns reflect Tennessee excise tax exposure identified in late diligence (a function of the capital partner's corporate structure); thinner returns accepted for asset quality and location.
Returns are net of developer economics and gross of Ranch Water fees and promote. "Underwritten @ Close" reflects day-one underwriting; "Current View" reflects a full re-underwrite as of June 30, 2026 — actual costs, actual lease-up pace, and current debt, with market rents and exit cap rates held at original underwriting. Current View figures are management's estimates and are unrealized and unaudited. ▲Portfolio-line averages are weighted by venture equity. The capital partner does not require periodic valuations; a reporting cadence will be proposed to the incoming partner. Equity shown is venture equity only; project leverage is capped at 65% LTC per the venture agreement.
Grayson is the portfolio's most instructive asset: the first project of the program, the first developer buyout, and the vintage that taught the underwriting rules now applied to every deal. When the developer requested an early exit and sought to price the buyout off a third-party appraisal, the venture — with capital-partner approval — declined to anchor on a number management viewed as optimistic, built its own valuation, and transacted at it: $17.0M, 24% inside the appraisal the counterparty proposed. There is no contractual buyout obligation in the program; each request is a case-by-case, good-faith negotiation, and this one was resolved on the sponsor's terms.
The discount wasn't luck — it was a valuation call. An appraisal was commissioned in connection with the negotiation and the developer sought to price the buyout off it; management judged the number optimistic, underwrote its own $17.0M valuation, and made it the transaction basis. Even measured against an appraisal the sponsor considered generous, the venture consolidated 100% of the equity at a basis 24% inside as-is value and 34% inside stabilized value — the difference accrues to the venture as the asset converges on stabilization.
Grayson's current-view return of 7.2% IRR / 1.4x MOIC (vs. 18.4% / 2.6x at close) reflects venture equity growing from $3.95M funded at close to ≈$8.96M today — capital deliberately added below appraised value or in defense of the basis — combined with a longer hold. It is primarily a duration and denominator effect, not value destruction: market rents and the exit cap rate are held at original underwriting. The bridge foots in four steps:
$739K of total equity less than underwritten — a $280K budget reduction plus 65% LTC financing versus the 60% assumed at underwriting.
Acquired the developer's 10% interest and promote on the sponsor's own $17.0M valuation — accretive consolidation, not rescue capital. $500K held back through Sep 2024 against liabilities.
$535,258 funded against operating overages — chiefly the Gwinnett tax reassessment (appealed $330K → $177K) — and the interest-reserve shortfall from a loan signed just before the SOFR spike.
$1,983,816 per the final settlement statement, inclusive of closing costs, fees, and legal. Deleverages to 41.1% LTC at a fixed 6.00% — trades near-term IRR for durability; recovers at exit.
≈ $8.96M current venture equity — footing to the June 30 mark. Every dollar added went in below appraised value or in defense of the basis, and the capital partner approved each one.
The first deal of a program should teach the most — Grayson did. Its lessons are now hard-coded into the screening and underwriting process applied to every subsequent project, and they are a principal reason the later vintages (Nashville, Charleston) are marked at or above their original underwriting.
An allocator reviewing this portfolio sees the same discipline in both directions: honest markdowns where the early model missed, and the corrections that prevented a repeat.
Grayson was underwritten around a reactivated competitor and still absorbed MSA-wide supply contagion. The rule today: no project proceeds with a new competitor in the trade area — full stop.
Trade-area analysis alone missed the metro-wide rate pressure. Pipeline and deliveries at the MSA level are now a first-pass filter on every submarket considered.
Post-completion reassessment risk is now modeled explicitly — and actively managed: the Grayson appeal recovered $153K/yr of the increase — roughly $2.8M of exit value at the underwritten cap rate.
Valuation. Appraised values per a third-party appraisal dated May 19, 2023, commissioned in connection with the buyout negotiation and proposed by the developer as the pricing basis: $22.36M as-is, $25.66M at stabilization. The venture transacted at management's own $17.0M valuation, reflected in the $2.487M purchase price for the developer's 10% co-investment and promote, of which $300K was held back to January 2024 and $200K to September 2024 against claims, liens, and liabilities.
Returns and equity. Current-view figures are management's unaudited estimates as of June 30, 2026, with market rents and exit cap rates held at original underwriting; see the Track Record section for methodology. Underwritten total equity of $5,128,069 (60% LTC) compares to $4,388,918 funded at loan closing (65% LTC, final budget $280,407 under underwriting); venture share at close of $3,950,026 plus the buyout ($2,487,000), operating and reserve fundings ($535,258), and the refinancing paydown ($1,983,816 per the final settlement statement, inclusive of closing costs, fees, and legal) bridge to current venture equity of approximately $8.96M — consistent with the June 30, 2026 mark. Tax-drag exit-value estimates capitalize annual amounts at the underwritten 5.50% exit cap rate.
This case study is provided for discussion purposes and is qualified in its entirety by the underlying transaction documents and appraisal report.
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These are the questions we would ask of any sponsor in our position. Fuller detail on each — underwriting models, loan documents, the pipeline log, and the executed venture agreement — is available in confirmatory diligence.
Because development is bought at today's prices and sold into the market three to four years out. The national development pipeline has contracted more than 40% from its peak, planned projects are stalling at record rates, and rate declines are decelerating toward a trough. Projects underwritten in 2026 deliver in 2028–2030 — into the lowest new-supply environment in a decade — while land and construction are priced by today's caution. Waiting for the recovery to be obvious means delivering into the next supply wave instead. And waiting for distress means waiting for blood storage rarely spills: assets seldom trade below replacement cost, and the discount that does appear usually signals a problem.
See: Market ContextThe 2022–2023 vintages delivered into an industry-wide shift to a heavy-discounting, heavy-ECRI operating model: physical occupancy ran at or ahead of plan on every asset, but achieved rates lagged day-one underwriting, extending the path to economic stabilization. The current-view marks reflect that honestly — longer holds and, on two assets, deal-specific friction that is disclosed line by line. The compression is primarily a duration effect, not value destruction: multiples largely hold, market rents and exit cap rates remain at original underwriting, and the underwriting model was rebuilt for every deal since — the vintages underwritten on the new model are marked at or above their original returns.
See: Track Record · Grayson Case StudyStart with what "double" means: the developer's promote exists in any structure. Going direct pays that first layer too — the price of 10–20% co-invested equity, every construction guarantee, and delivery accountability. Going direct doesn't remove a promote; it removes the filter. Ranch Water's economics cost roughly 150 basis points at target returns (the gross-to-net bridge is shown with the terms) and buy selection: 227 opportunities underwritten across ~140 developer relationships to close seven, versus the one or two deals a single developer happens to have each year. The record shows the filter paying for itself — every asset underwritten on the current screen is marked at or above its original underwriting; every asset before it, at or below. The promote is also back-ended behind a pari passu preferred return, so most sponsor promote dollars are earned only in outperformance.
See: Terms · StructureThe structure is built so no asset depends on any one person's continuity. Developers carry the guarantees and construction-period accounting; national third-party managers run operations; and the capital partner holds consent rights over every project, budget, financing, and disposition, with step-in protections in the definitive documents. The assets are conventionally financed, professionally managed, and individually saleable. Ranch Water's role is sourcing, underwriting, and asset-management judgment — with dedicated asset-management hires planned as the platform scales.
See: StructureAn allocation decision at the partner level, not a performance dispute. Our existing partner pulled back from ground-up development broadly and passed on multiple fully underwritten projects that met the program's criteria, at which point exclusivity lapsed by its own terms. We continue to manage the existing venture together on constructive terms, and the track record is jointly owned with full attribution rights. The search for a new anchor is a difference in timing conviction: we believe the next three years are the best development window of the cycle; they are underweighting development everywhere.
The developer — structurally. Completion and repayment guarantees sit entirely with the developer, whose development fee stands in first-loss position for controllable overruns, and budgets require partner consent before and during construction. The record shows both sides: two recent projects delivered on time and meaningfully under budget, and where municipal requirements drove genuinely uncontrollable overruns, developer-fee remedies were weighed deal by deal — preserving the small set of developers capable of institutional-quality work. Overrun risk is priced, guaranteed, and consented — not absorbed silently.
See: Structure · Grayson Case StudyThe program has already answered this in live conditions. Leverage is capped at 65% of cost and closed at 55–65% across the portfolio; loans are construction-to-permanent with relationship banks, so delivery never depends on a refinancing window; and maturities are staggered by vintage. When the debt market dislocated in 2023, the venture supported one asset with equity rather than accept distressed terms — then refinanced two assets in March 2026 at a fixed 6.00%, deleveraging one to 41% of cost. Never a forced seller, and never a forced borrower.
See: Track Record · Grayson Case StudyBecause the constraint is quality, not capital. The best storage developers execute one or two institutional-grade projects per year, and the screen behind the current portfolio passes roughly one deal in thirty. Sixty million dollars over three years — ten to twelve projects at ~$5M of venture equity each — is what that filter can deploy without lowering the bar. The program can grow with the developer bench, and ten to twelve stabilized assets create real scale optionality at exit; but every deal is underwritten standalone, with portfolio-level pricing excluded from targets.
See: SourcingResponses are summaries for discussion purposes and are qualified in their entirety by the definitive venture agreement, underlying loan documents, and diligence materials referenced above.
Managing Principal, Ranch Water Capital L.L.C.
Jason W. Haby is currently the Managing Principal of Ranch Water Capital L.L.C. ("Ranch Water"), a Dallas-based private real estate company that seeks to make opportunistic investments within the storage industry, particularly through ground-up developments and conversions. Prior to founding Ranch Water, he most recently worked for Crow Holdings Capital ("Crow") where he was instrumental in establishing the company's self-storage investment group as well as its $234 million dedicated self-storage investment fund. Before joining Crow, he spent approximately six years as Director of Asset Management with Equity Office Properties, a real estate subsidiary of the Blackstone Group, and before that held development and lending positions with Trammell Crow Company and Bank of America, respectively. Mr. Haby received an M.B.A., cum laude, in Real Estate Finance from the University of Texas at Austin and a B.B.A. degree, cum laude, in Finance from Texas A&M University. An active member of the Self-Storage Association (SSA), Mr. Haby has had the distinction of speaking as a panelist at multiple national and state storage conferences.
Ranch Water Capital is a Dallas-based private real estate firm focused on opportunistic self-storage investments. Over the past four years we have assembled a portfolio of seven institutional-quality assets across six major markets — developed at cost, managed by best-in-class operators, and positioned for full optionality at exit.
All information contained herein is confidential and subject to formal offering materials. Any investment in Ranch Water Capital L.L.C. involves significant risks. Past performance is not indicative of future results. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any interests in a venture or any other securities.