Self-Storage Sector Holds Up SOUTHWESTERN CITIES HAVE HEALTHIEST RENT TRENDS
by Francis Chantree
T he self-storage industry has grown significantly in recent years, with developers regularly finding profitable locations for new facilities. Also, as it provides vital services, it has a reputation for riding out challeng- ing times relatively well. Add to this the comparative ease with which a self-storage business can be started, and it becomes clear why it is an enduringly popular sector with real estate investors. One important question for any entrepreneur looking to start out in self-storage is where they should focus their attention. Analysis made by STORAGECafé, using data from their sister division Yardi Matrix, indicates that many storage facility operators in the nation’s largest cities have been able to maintain profitable rental rates during the challenging year of 2020, and prior to that as well. Interestingly, however, the places that have seen their self-storage street rates increase the most are in the Southwest.
considered an essential service and so many facilities stayed open throughout 2020, swiftly introducing new health measures and contact-free operations, being of service to people experiencing the year’s challenges, and staying afloat economically. A self-storage locker can also see more everyday usage. As it is much cheaper than residential space per square foot, many people with restricted room at home use it as a smarter, more cost-effective overflow for occasionally used items. Other clients may include fans of sports that require bulky equipment and anyone who relocates tem- porarily to smaller accommodation, for example to spend winter in a warmer climate. Storage space can also be useful for business purposes, providing a flexible amount of space for raw materials, products or paperwork and requiring no commitment to a long-term lease. When circumstances drive people to self-storage, inventory can lag behind demand, creating opportuni- ties for investors. Local building regulations play a part in decision making, but developers often find profitable locations for building and they may also take on renova- tion projects with lower start-up costs. These days, new, high-rent city-center facilities and converted suburban retail spaces find their place alongside the traditional out-of-town lock-up garages. SELF-STORAGE ISAPPRECIATED AND EASIER THAN OTHER SECTORS
SELF-STORAGE FOR DOWNSIZING, FLEXIBILITYAND SMART LIVING
Self-storage is strongly linked with life events such as moving to a new home and accommodating an expanding family, so population increases in a city often spell good news for its self-storage sector. In addition, economic cir- cumstances can create a need to downsize or to free up living space if a household suddenly has to take in extra members. For these reasons, self-storage is generally
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