Michael Scanlon, president of the national Self Storage Association, says 300 to 400 facilities were built over the past couple of years. He thinks that number could double in 2014. “Based on the reporting mechanisms we use, probably about 800 are going to be constructed over the next year.”
However, he estimates that perhaps a quarter of those planned projects won’t move forward.
As the industry gears up to build more facilities, Scanlon cautions against overdoing it. “As occupancy in the industry nears 90 percent, people are going to look at expansion,” he says. “I hope we don’t get into another binge cycle where we overbuild. That is something I hope people are educated on and don’t do.”
Adding more square footage to an already crowded market can diminish revenue for everyone, he adds. Developers need to do “very detailed due diligence” to avoid building in markets that already are saturated.
New Projects on Deck
Since the beginning of the year, self-storage operators have announced a slew of construction projects across the U.S. Here’s a roundup of some of the projects getting off the ground in 2014:
- Public Storage Inc. has at least two projects in the works. The company won approval to build a 174,000-square-foot facility with 1,500 units at 5500 San Fernando Road in Glendale, Calif. The company also bought a 4.5-acre site at 4550 Clark Road in Sarasota, Fla., for $1.3 million.
- Atlanta-based NitNeil Partners is spending $4 million to build a 57,000-square-foot facility in Chattanooga, Tenn. The facility will be managed by Uncle Bob’s Self Storage.
- Clark Investment Group of Wichita, Kan., has committed to construction of five facilities in the New York City-metro area, a mix of new development and conversions. Each project has about 100,000 square feet of space and more than 1,300 units.
- Atlanta-based Safeguard Self Storage has two facilities on the drawing board in Chicago, with a combined footprint of 113,000 square feet and price tag of $15 million.
- The Amsdell Cos. is moving ahead with two conversion projects in its hometown of Cleveland. The first project will convert the historic buildings at 1545-1559 E. Superior Ave. into a 700-unit climate-controlled facility.
- North Carolina-based Penton Development is building its first self-storage facility at 5307 Oleander Drive in Wilmington, N.C. The 200-unit facility is expected to open this summer.
- Rapanos Family LC obtained zoning approval to build a 20,900-square-foot, 166-unit facility at 1547 Washington St. in Midland, Mich.
- Lehi, UT-based Alpine Storage started demolition work at the former Sears building in Wichita Falls, Texas. The conversion project will feature a drive-through area.