This week the ISS editorial team is working on November’s business issue. As we wade through articles about self-storage financing, it’s easy to buy into the gloom and doom.
While it’s true self-storage has perfomed better in today’s dreadful economy than many other industries, it is not recession-proof. Some facilities are benefiting from the housing fallout—leasing units to family’s downsizing—and other are watching units empty as tenants tighten their financial belts. How a facility manages during this economic downturn often depends greatly on its local economy, as evidenced in this article in the Las Vegas Business Press.
According to a report by Marcus & Millichap, Southern Nevada’s self-storage market has managed to stay robust during the first half of 2008. The softened residential market—more foreclosures and new residents—has created more transitional housing needs, the company says.
Roughly 3 million square feet of new self-storage space was completed throughout the West last year, with about half of all new projects occurring in California, the company reported.
And despite the downturn in the economy, storage rent is also on the rise, increasing 6.1 percent last year across the West, averaging 94 cents per square foot, according to Marcus & Millichap. Overall, self-storage facilities raked in $20.1 billion in gross revenues in 2007, reports the Self Storage Association.
To find out how others markets are doing, check out Michael McCune’s regular column, Real Estate Roundup. McCune and a handful of experts take an in-depth look at specific regions every issue, examining finances, lease-ups, construction and remodeling, etc.
If you’d like to share how your market is weathering the economic downturn, simply click on the “leave comment” link below.