"The New Metrics in Self
Storage Demand"
"Solid Year Ahead"-
Cushman Wakefield Appraisal
"Best Kept Secret"- Colliers Appraisal
"What You Don't Know......."- ISS magazine
"New Dynamics in Self Storage Development"- SBOA Magazine
What do all of these recent headlines from our industry magazines/newsletters have in common ? A very positive outlook on the self storage sector's performance and a trend toward increasing new construction starts.
Not to worry.........The fact is, the number of new construction starts is finally increasing and may cause some short term supply/demand issues in certain sub-markets down the road. But the fact remains, the number of new construction starts is well below the 1995-2006 building spree that saw our industry literally double in size from one billion to two billion square feet.
So, why do Industry Experts opine for the overall increased Demand
and generally higher Occupancies across the
USA ?
-Read More-
Chris Jernigan
of Jernigan Capital states the reasons are that there has been population growth in most of the largest markets, virtually no new construction starts since 2010, decline in home ownership, and increase in multi-family living by the millennials These have all contributed towards increasing the overall Demand for self storage and creating a new development cycle.
Christian Sonne,
Executive Managing Director of the Cushman Wakefield Valuation and Appraisal division stated earlier this year, "Market fundamentals remain robust for self storage. Supply and Demand factors are near equilibrium, resulting in rising operational characteristics and higher net operating income. Positive growth in physical occupancy tends to be followed by growth in economic occupancy suggesting momentum will be sustained. We expect a surge in new construction in 2015 continuing through 2017, as long as financing remains stable."
Jeff Shouse
, National Director Self Storage Appraisal for Colliers International, recently stated, "comparing overall average returns on a 5 and 10 year basis, self storage has outperformed multi-family, retail, industrial and office investments by at least 20%. Self storage facilities are not recession proof, but recession resistant. During 2008-2010 when the market was hit hardest, overall occupancy only experienced a slight drop off of approximately 3-8% depending on the market. This is remarkable......" Jeff's colleague, Steve Mutty from the Washington, DC Colliers' office states, "It's all about the "Stuff". The outlook for this investment is exceedingly bright! Steve further states, "Self storage properties are located at the intersection of three irresistible forces: two are societal and one is behavioral. They are Consumerism, Nostalgia and Re-urbanization."
It is my opinion that unless and until our industry has better detailed information on our customers and their storing habits, we are not going to be able to target market our services efficiently to any particular demographic group with certainty.
Hope to see many of you at the SSA Conference in Las Vegas in two weeks.
Sincerely Yours,
Nick Malagisi, SIOR
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Nick Malagisi, SIOR
Chairman, National
Self Storage Council
716.633.9601
P.O. Box 1015
Buffalo, NY 14231 USA
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