I'm a little late joining the conversation here, especially since I've had the pleasure of knowing and working directly with many of you in the self-storage industry for years! This looks like a great forum and resource, and I'm looking forward to connecting with both familiar faces and new ones. For those I haven't met, I'm with EDC, a mid-sized national general contractor headquartered in Richmond, Virginia. We build throughout the Eastern United States, with a strong focus on self-storage, small bay/flex, warehouse, and logistics facilities. I lead our construction programs in these sectors and enjoy working with owners, developers, and industry partners from the early planning stages through project completion. I'd also like to offer EDC as a resource to this group. Whether you have questions about construction costs, need preliminary budgeting assistance, want to explore value engineering opportunities, or simply want to bounce around ideas on a potential development, we're always happy to help. Those of you who already know me know that I'm easy to reach and always willing to have a conversation. Feel free to call, text, or email anytime. I'm looking forward to contributing to the forum, sharing ideas, and learning from everyone here. Please reach out and introduce yourself. I'd love to hear what you're working on! Martin Blum, CCIM Senior Business Development Manager | Shareholder EDC 1660 Huguenot Road, Midlothian, VA 23113 Mobile: 804.461.5613 Email: MBlum@edcweb.com

September's CPI increased 3.7% year over year, adding further uncertainty to the interest rate outlook. The Federal Reserves next rate announcements are scheduled for October 28 and December 9. As of today, market sentiment is pricing in the possibility of a cumulative 0.50% increase in the federal funds rate. Below is a five-year look at the 10-year Treasury yield, illustrating the significant increase in borrowing costs: Dec 2021 ~1.49% Dec 2022 ~3.5% Dec 2023 ~3.9% Dec 2024 ~4.1% Today ~5.24% This represents an increase of approximately 375 basis points since December 2021. CRE impact - Historically, an increase in the cost of capital has resulted in lower property valuations and cap rate expansion as investors require higher returns to compensate for increased borrowing costs and investment risk. Generally, each 0.25% rate increase impacts the buying power by 2.5% provided that other variables remain constant. Based on what we are hearing and reading, new transaction activity has slowed, with some deals being retraded, or effectively coming to a standstill. We are also beginning to see pricing adjustments and cap rate expansion across various asset classes. The bigger questions - Where do valuations and cap rates go from here? Will sellers adjust their pricing expectations to reflect the higher cost of capital, or will the disconnect between buyer and seller expectations continue to constrain transaction volume?

My name is Henry. I am a residential home builder in South Carolina. Transitioning to small bay developer. Glad to be in the group. I was at the Flex connect event in Houston and learned a lot.

Hello Hello! I’m Heather McCombs with Spacebox Management. I have nearly 10 years of experience in self-storage management and am now expanding into the flex space market. We currently have one facility under management that is under construction, with hopes of receiving our Certificate of Occupancy within the next month. I’m excited to bring my self-storage experience and industry knowledge into the flex space sector to help get our units leased quickly, efficiently, and successfully. www.spaceboxmanagement.com

Inflation seems to be following a pattern similar to the 1970s so far. Hopefully, history won’t repeat itself!🤞 During the 1980s, when interest rates touched 18%, what were the typical cap rates for different types of real estate properties? It would be interesting to understand how real estate valuations and returns responded to such high borrowing costs.