Self Storage
We are actively acquiring existing self-storage properties in primary and secondary market locations where we can apply new management principles to achieve the best results. We review population densities, market rents, competitor’s locations, and new planned and proposed facilities that will affect future rent growth, occupancy, and long-term value.
Storage is a resilient asset class
Self-storage has weathered multiple economic cycles while demonstrating recession-resistant traits. During the 2008 recession, self-storage was the only REIT sector to deliver a positive return. The demand for storage is driven by life disruptions; for example, storage is needed when upsizing or downsizing housing and relocation but is increasingly being used for long term storage needs as living and back yard spaces shrink.
Storage is a fragmented industry
Real Estate Investment Trusts (REITs) and other top operators control 26% of the nation’s self-storage facilities, while 73% of the market is controlled by smaller, locally-owned companies (see the 2019 Self-Storage Almanac).
Storage offers higher profit margins
In addition to the sector’s recession-resistant demand drivers, the resiliency of self-storage can be attributed to the lower operating overhead and limited recapitalization cost. Self-storage enjoys higher profit margins and lower delinquency rates than other real estate asset classes. Evolving technology will allow self-storage to become more automated in the near future.
Self Storage = Profits
Self-storage demand continues to remain high in U.S. markets that have cultivated a following among millennials. Millennials are the fastest growing segment of the storage business today. In many cases, millennials are renting self-storage units in tandem with apartments because the cost per square foot of storage is roughly 30 percent less than it is for an apartment, a less expensive off-site closet. As a percentage of households, millennials make up the biggest share of storage users in the U.S.
We simply see it this way….if banking institutions can automate financial transactions using Automated Teller Machines, it seems highly probable that self-storage rentals and operations can be automated.