StorageMart, a Columbia, Mo.-based self-storage operator with more than 165 facilities in Canada and the United States, recently canceled a 50,000-square-foot expansion it had planned for a location in Saskatoon, Saskatchewan, Canada. The move was made after the company determined Saskatoon was becoming oversaturated with self-storage development amid a decline in population, according to a press release. Company officials also believe self-storage market conditions in Alberta are becoming unfavorable due to overdevelopment and economic issues.
“Saskatoon is a great example of a market that underscores the changes in the self-storage business in Western Canada,” company officials said in the release. “Saskatoon is experiencing a rapid increase in self-storage development and currently has an estimated 600,000 square feet or 0.75 square feet of storage per resident. However, with the dramatic drops in the price of uranium, oil, potash and other agricultural products, Saskatoon has experienced a decrease in population and job growth. The confluence of these economic factors is hitting Saskatoon as more self-storage facilities are being built and coming online.”
Last year, Canadian Self-Storage Valuation Services Inc., which offers appraisals and feasibility analyses to owners and developers, estimated the total self-storage supply in Saskatoon at 436,000 square feet. The availability of 600,000 square feet of storage space would represent a 38 percent increase. StorageMart estimates that current facility expansions underway in the market have the potential to add another 185,000 square feet within the next six months. “This overdevelopment will be great for local residents and businesses who use self-storage, but a challenge for operators who will have to adjust to lower rental rates and offer larger incentives to attract new tenants,” the release stated.
Prior to canceling its expansion for the StorageMart facility at 3010 11th St. W., the company recently completed a 44,000-square-foot expansion at its 901 1st Avenue N. location. StorageMart operates three facilities in Saskatoon and 63 in Canada. Although the company has typically been aggressive in its expansion plans, it decided to curtail the 11th Street project after analyzing current market conditions. “This market just cannot bear the massive increase in supply that is coming,” said Cris Burnam, president.
Current development projects in Saskatoon cited by StorageMart officials include Shield Self Storage, a modular building concept designed to develop storage space in increments of 6,400 square feet. The initial Shield development calls for 60,000 square feet of self-storage including 400 RV parking spaces, according to the release.
BRITEBOX Storage Co., formerly Handyman Self Storage, has two locations in Saskatoon. The company plans to add 13,000 square feet in the next three months, with the potential to add 50,000 square feet at both facilities in the next few years, StorageMart officials said.
Elsewhere, Stor All Mini Storage is adding 8,000 square feet of portable-storage space, and an unidentified self-storage development on Marquis Drive is set to add 70,000 square feet, the release stated.
Market conditions in Alberta are similar to those in Saskatchewan, according to StorageMart. In May, a slump in oil prices prompted the Conference Board of Canada, an Ottawa, Ontario-based think tank, to forecast a recession for the cities of Calgary and Edmonton. The Conference Board predicted the economies in Calgary and Edmonton would shrink 1.2 percent and 0.8 percent, respectively, this year, according to “The Wall Street Journal.”
“The dramatic drop in commodity prices and overdevelopment of self-storage in certain [Western Canada] markets will constrict the economic viability and access to future lending for development,” StorageMart officials said.
Founded in 1999, StorageMart serves more than 75,000 self-storage customers across Canada and the United States. The company operates in Chinese, English, Punjabi, Quebecois French and Spanish.
- PR Newswire: Self Storage Industry in Danger of Over-Supply in Western Canada, Reported by StorageMart
- The Wall Street Journal: Slump in Oil Prices Could Drag Calgary, Edmonton into Recession