Comiskey and Owens: Many self-storage brokers, lenders and investors wish they knew the answer to this question. Our market, fortunately, has remained relatively stable and strong. One thing we’ve noticed is the change in interest rates has made it harder to find upside to positive leverage in a facility that has a lower cap rate.
Grisanti and Helline: Judging from all other sectors of the commercial market, we’re seeing a definite turnaround. We went four months (January to April) without executing any lease or sale contracts. Since May 1, we’ve executed 10 contracts. This tells use the market is turning. We’ll know for sure in about two months if it holds up.
Keys: My sense is the market has bottomed out; however, the dismal state of the capital markets has brought on a liquidity crunch that may exacerbate the situation unless lending resumes. Storage facilities are not problematic assets per se, but unfortunately, they have been painted with the same brush as other more volatile real estate.
Lehmbeck and Procter: We’re hopeful that we’ve hit the bottom of today’s market, and feel fortunate Oklahoma has unemployment at below the national average.
Minker and Trahant: We feel the rest of 2009 and possibly the first half of 2010 will continue to be difficult for most industries. The negative impact on real estate value will most likely continue. In all likelihood, value will not begin to increase for this period. On a positive note, investors who’ve been sitting on the sidelines waiting for the bottom of the market are now inquiring about opportunities. Perhaps this is a sign that we may be closer to the bottom.
Michael L. McCune is president of the Argus Self Storage Sales Network, a national network of real estate brokers who specialize in self-storage. Argus provides brokerage, consulting and marketing services to buyers and sellers and operates SelfStorage.com, a marketing medium and information resource for facility owners. For more information, call 800.55.STORE.