Sunday, January 24, 2021
You are here : Industry Report
  • Yardi Breeze Self St...



  • IAMSSA Cowie_600x175

  • Advertise Here_600x1...


Self Storage Industry Report: November 14, 2016

posted on
Self Storage Industry Report: November 14, 2016

Self Storage Execs React to Presidential Election

The surprise election of Donald Trump to the presidency last week leaves many wondering if he will  be able to deliver on promises. His unconventional campaign leads to much uncertainty of how he’ll govern. A few self storage insiders reflect on what the election might mean to storage:

Anne Hawkins, executive vice president, STR: “Corporate taxes may have an impact on storage, and healthcare is going to change. So much of this is contingent on how effective Trump is going to be and what kind of team he puts together. It’s hard to know with no track record or previous political experience. He’ll control all houses of government, but what he’ll do with that we have no clue.”

Marc Boorstein, partner, MJ Partners Real Estate Services: “It was said a Trump presidency would increase the likelihood of inflation. That’s already happened, briefly. Inflation will come from infrastructure spending. Self storage has typically outpaced inflation, so if we get some inflation that’s good for self storage. You’ve got monthly rents, so you can raise rents faster than retail or office. “

Connie Neville, managing director and co-chair of self storage, Sperry Van Ness: “Changes to the corporate tax structure may very well have an impact on storage. The devil is in the details, and we don’t know. There are always campaign promises and rhetoric. We have a lumbering system, so I think it’s going to take longer than the sweep of a pen.”

Houston, We Have a Problem!

STR, a leading data and analytics service provider building a database to track self storage inventory and development activity, has found that the Houston market is showing signs of decelerating growth.

“If you look across our Public Storage Top 20 Markets, all had positive growth year over year except one – Houston,” said Ron Havner, CEO of Public Storage, during his company’s quarterly earnings call. Public Storage owns more than 2,300 self storage facilities across the country.

Based on STR’s analysis, 58 development projects are underway in the Houston market, which represents less than 6 percent potential growth in the number of facilities in Houston. A potential 6 percent growth in new facilities is lower than the other nationwide markets currently tracked by STR. Harris County, where Houston is located, has the most development activity with 21 projects. Fort Bend County has the next highest count of new projects with 11. 

Revenue Growth Slowing After Aggressive Development

Revenue growth is slowing down, according to a third quarter market overview from Chicago-based MJ Partners Self Storage Group.

Self storage REITs generated same-store revenue growth ranging from 4.5 percent to 7.2 percent in the 3rd quarter, down from the 2nd quarter’s growth of 5.7 percent to 8.5 percent year over year. At the same time promotions and discounts increased in the quarter.

Among the report’s other findings, Public Storage is the most active developer of self storage among the public REITs. Since the beginning of 2013 through September 30, 2016, Public Storage has opened newly developed or redeveloped projects adding 4.4 million net rentable square feet.

Colliers International Reports on Latin Self Storage

Colliers International has released its first ever Latin American Self Storage survey this fall showing that the largest investments in storage are happening in Mexico and Brazil. There are an estimated 600 commercial grade facilities throughout the Latin countries.

Colliers’ report found that on average facilities were 80 percent occupied. The internet and social media play a key role in marketing storage in Latin America with more than 60 percent of respondents surveyed saying the found their unit through internet searches.

The biggest challenge in the market is that there’s no history of what self storage facility actually is as an asset class.

West Palm Beach Storage Sold

Marcus & Millichap (NYSE:MMI) arranged the sale of a 491-unit, 40,665net rentable square foot self storage facility in Riviera Beach, Florida. Brian Baldwin, investment associate, Luke Elliott, associate vice president investments, and Michael Mele, senior vice president investments, all of the Tampa office, had the exclusive listing to market the property on behalf of the seller, a private investor. Another private investor was the buyer, identified by the sales team.

West Palm Beach Self Storage is comprised of 66 climate controlled units and 394 non-climate controlled units. There are 31 boat and RV parking spaces.

| Categories: Self Storage Business | Tags: | View Count: (2201) | Return

Post a Comment