Monthly Archives: December 2015

Need Storage? The Answer Is The Boom In Self-Storage

self-storagelady

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

Why Baby Boomers Love Self-Storage

Love Of Self-Storage

One major force driving the demand for more self-storage are the boomers.  The boomers are those born between 1946 and 1964 whose age range between 51 and 69 in 2015.  Almost nine months after World War II ended, the cry of the baby was heard across the land.  More babies were born in 1946 than ever before in the U.S.: 3.4 million.  This was the beginning of the baby boom.

There were 76.4 million “baby boomers” in the United States and they made up 40% pf the nations population.

As the boomers grew older, every segment of the economy was impacted from the selling of baby products, building schools, building automobiles and houses.

Now we are building self-storage because the boomers were the most prosperous generation we had ever seen  and represent $2 trillion in spending power.  Is it any wonder they have more stuff than any previous generation.

Now that they are getting to the age where they are beginning to start downsizing, they still have more stuff to store.  So, rather than getting rid of those things they worked to obtain, many are choosing to store it.

Nearly 1 in 10 American household uses one of the 50, 000 self-storage facilities.  And now the boomers are increasing demand for self-storage like we’ve never seen before.  Is it any wonder that experts predict it will be 2022 before the industry meets the demand for self-storage?