The self-storage market in southwestern Florida appears to be emerging from the Great Recession with a full head of steam, according to a report by news-press.com. Self-storage operators have reported increases in facility occupancy from residential tenants, and development of new or expanding facilities also appears to be on the rise. “The industry is booming,” said Lewis Pollack, president of the Florida Self Storage Association.
Crystal Rich, manager at Colonial Blvd Self Storage in Fort Myers, Fla., said her facility has benefited from securing a lot of long-term renters and commercial businesses. Rich also said she has noticed an increase in the number of self-storage locations opening in the region.
At Champion Self Storage in Cape Coral, Fla., property manager Lindy Lord-Cooper said occupancy is also up significantly compared to lean numbers during the height of the recession. The facility opened in October 2007 and did well, she said, but occupancy stagnated between 70 and 73 percent when the economy slowed. Today, the facility is operating at 91 percent occupancy.
Pollack estimated that prior to the economic downturn, 20 to 25 percent of Florida’s self-storage customers were related to construction, but as commercial customers pulled back during the recession, they were replaced with residential tenants, he said.
The health of the Florida market may be a microcosm of what is occurring in major self-storage markets across the nation. In a market report examining the storage and warehouse-leasing industry published by IBISWorld, a firm that offers a database of information and analysis on several U.S. industries, analysts expected the self-storage industry to average an annualized rate of 1.8 percent to $25.2 billion in the five years to 2013. Despite revenue declines in 2008 and 2009 and stagnant growth in 2010, analysts predicted 4 percent growth this year, according to the source.
IBISWorld attributed predicted growth to a high rate of mortgage foreclosures, reduced numbers in homeownership and rising per-capita disposable income. Tight lending conditions following the recession also slowed development of new self-storage facilities, according to the source.
In a self-storage business brief released in August by the Valuation & Advisory Division of commercial real estate firm Cushman & Wakefield (C&W), year-over-year results from the first-quarter 2013 showed increases of 3.1 percent for physical occupancy and 4.8 percent for rental income. Although C&W reported new-construction projects were low historically, new builds were up 4 percent from the previous quarter and 125 percent year over year. The brief is downloadable for free from Inside Self-Storage.
“Most large operators and a handful of regional operators have started actively searching for new development opportunities in most major metropolitan areas,” according to the brief. “The robust growth in rental rates and occupancies combined with the small amount of new construction in the pipeline are fueling this new construction growth.”
In Florida, Pollack expects new self-storage developments to emerge. “Lots of people, like me, are looking to start building again,” he said.