Self-Storage For Rent
Business is booming for companies that lease out storage units to consumers. Rents are rising, most units are occupied, and competition is tame of the financial crisis, storage executives analysts say.
Investors are bidding up the shares of industry leaders such as Extra Space Storage Inc.,whose stock is up 33% through Monday in a year when many other commercial real-estate firms have been hit hard and the broader S&P 500 is down 2%. Evercore ISI last week boosted its price targets for Extra Space Storage stock and the shares of two rivals.
Consumers seek storage space because of life changes that occur in good times and bad. Some in the industry refer to the 4Ds—death, divorce, downsizing and dislocation, which can include people finding new jobs, getting married or moving away or back home from college.
Demand for storage space appears steady, even amid tepid job growth, and supply remains tight. Extra Space, based in Salt Lake City, said 94.5% of its space was occupied at the end of the second quarter, up from 92.1% a year earlier. Public Storage, the largest publicly traded firm in the industry, reported a 7% increase in rental income year-over-year.
Part of the reason for the tight supply is that building new units can take years. In one extreme example, it took Extra Space more than a decade to build one facility in Southern California, said Spencer Kirk, the firm’s CEO. Some communities are unenthusiastic about hosting storage facilities.
In conclusion…Now would appear to be a great time to enter the industry.
Source: Need To Store That? Booming Self-Storage Industry Says No Problem, The Wall Street Journal, Liam Pleven, October 13, 2015