What Do Self-Storage Operators Think of Industry Consolidation? Survey Results and More

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Inside Self-Storage recently a published the article, "Is Self-Storage Now a Consolidation Nation? Real Estate Experts Discuss the Acquisition Trend," in which professionals discussed the purchasing prowess of the self-storage real estate investment trusts, how it affects independent facility operators, and their predictions for the years ahead. To learn more about the topic from an operational perspective, ISS conducted a survey to see what self-storage owners and managers think about REIT acquisitions in their markets.

Following is sampling of data and comments from smaller, independent self-storage enterprises. Survey respondents were 44 percent facility owners and 56 percent facility managers.

We also included some personal feedback from the REITs themselves (see the bottom of this page). For information about REIT purchases, sales, financial reports and third-party services, visit the ISS "Real Estate Investment Trust" topics page. There you'll find hundreds of free articles pertaining to CubeSmart, Extra Space Storage, Sovran Self Storage (Uncle Bob's) and Public Storage Inc.

How many self-storage facilities do you own/manage?

How many self-storage facilities do you own/manage?***

How many REIT facilities do you compete with directly in your market?

How many self-storage REIT facilities do you compete with in your market?***

Are you concerned that your facility or one of your independent competitor’s facilities will be bought by a REIT in the next two years?

Are you concerned that your facility or a competing facility will be purchased by a self-storage REIT?***

Would you ever consider selling to a REIT?

Would you ever sell your self-storage facility to a REIT?***

What are your thoughts on industry consolidation?

  • Unfortunately, they [the REITs] are alike, and as they absorb more of the smaller operations, everyone starts to look and act alike.
  • If the industry were consolidated and bought up by the REITs, I believe the customers would be paying the price. The cost would go up and the quality down. Just last week I attended the Ohio SSA first annual meeting, and Mike Scanlon gave a presentation on the national state of the industry. He stated that every owner's exit strategy is to sell to the REITs. I personally plan to pass my business on to my children. Selling to the REITs is the last place I would go.
  • I think it's fine if it is a properly run REIT who focuses on profitability instead of giving it all away.
  • It's a natural process, and very few industries are able to avoid it. It makes sense whether we like it or not ... Like the law of gravity ... If you're not part of the consolidation, you better quit your complaining and compete.

What the REITs Have to Say

“Good or bad—consolidation is accelerating. The economies of scale, the impact of the Internet and the marketing channels for customer acquisition justify increased scale. It’s an evolution.”
~David Doll, senior vice president and president, real estate group, Public Storage Inc.

“Industry consolidation under the large brands is raising the profile of self-storage for consumers while bringing pricing discipline to the marketplace. It is also resulting in a more robust service offering for customers, as the large operators are more equipped to innovate. CubeSmart’s superstore service model is an example of this.”
~Chris Marr, president, chief operating officer and chief investment officer, CubeSmart

"We’re seeing the larger operators, meaning the national and publicly traded REITs, taking the marketshare from smaller, less sophisticated operators. So that, combined with virtually no new supply coming into market, bodes well for a larger, more sophisticated platform. You’ll continue to see increased consolidation in the months and years to come."
~Clint Halverson, Vice President, Corporate Communication and Investor Relations, Extra Space Storage Inc.

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