Reasons for Self-Storage Operators, Developers and Investors to Be Thankful This Year

With the Thanksgiving holiday upon us, it’s once again time for annual reflection about the things for which we’re most grateful. Despite some ongoing challenges, there’s much I’m thankful for this year personally and professionally. Similarly, I suspect the self-storage industry is in much the same boat.

Though the year is closing with some tempered enthusiasm—mostly spurred by cooling demand and softening rates—there’s still much that operators, developers and investors can celebrate as we begin to look ahead to next year. Here are some reasons for which each can be thankful:

Operators

In the game. If you’re a self-storage operator, you’re already in the game, which gives you a leg up on the legions of interested parties still clamoring to become part of the industry. What you do with that head start makes all the difference, of course, but already being part of the business enables you to become a formidable market leader, enjoy the fruits of one of commercial real estate’s highest performing sectors and position yourself for a lucrative exit when the timing’s right.

Transformational innovation. The market’s never been more crowded, which makes operational decisions critical. Fortunately, the rise in competition and the changing nature of many business models has been met with unprecedented innovation from industry suppliers by way of technological tools and resources. I suspect we’re just inside the doorway of what’s to come, but the path to push your business forward and position it to withstand the uncertainties of the future has never been more apparent.

Options to sell. As alluded to in the first item, existing operators are still in an enviable position if they wish to sell. Though the real estate market has cooled and may be a challenge for some new investors, well-appointed self-storage facilities in outstanding locations will always be in high demand by those armed with deep pockets and motivation.

Developers

Convincing arguments. Though some municipalities continue to put up roadblocks to self-storage development, others have taken a more pragmatic approach understanding that they have limited options when it comes to filling difficult parcels and giving dozens of vacant, deteriorating buildings new life. Self-storage developers have much to offer with projects that are low-impact, adaptable, fill a community service and contribute handsomely to local taxes.

Creative solutions. Business operation isn’t the only part of self-storage that’s evolved. Facility design has met the times with material and site innovations that can make it an attractive part of any community. From eco-friendly solutions to mixed-use concepts to offering a wider array of business and consumer services, modern self-storage facilities can be a compelling story for developers to sell.

Investors

Options. There’s a plethora of viable ways interested parties can invest in self-storage, from passive investments—including REIT stocks—to joining an investment group to pursuing your own deals. The industry has never had more avenues for outside money to enter the business. For those who do their homework to create a clear vision, listen to reputable insiders with a track record of success and do their due diligence on potential deals, there are ample ways for new investors to find success.

High performance. Though operational metrics have cooled and the future of the economy remains uncertain, self-storage remains a bankable pursuit. Occupancies and rates were so sky high that the cooldown is merely a return to what was normal, and normal was as good as or better than just about any commercial real estate sector. There’s little to indicate that the future holds anything less than high revenue and profit for those who take a measured and strategic approach.

Giving Tuesday

On the other side of Thanksgiving weekend is Giving Tuesday, and in the spirit of the day, the ISS Store will be lowering prices on seven streaming-video packages that offer insight to every aspect of the business. I encourage you to take advantage of this special sale to give the gift of industry education, whether for yourself, a family member, friend or colleague.

On behalf of the ISS team, I hope you have an enjoyable and plentiful Thanksgiving holiday.