Self Storage
512-571-3486
512-571-3486
The self-storage industry has garnered a reputation for its distinctly remarkable resilience during economic downturns. This unique characteristic stems from several key factors:
Life Events Remain Constant:
Moving: Economic fluctuations don't eliminate the need to move. Job relocations, family growth, and downsizing are ongoing life events that necessitate temporary storage solutions.
Life Transitions: Divorces, estate cleanouts, and military deployments are personal situations that often require secure storage space, regardless of the economic climate.
Thomas Bradley of Global Capital Investing believes that Self Storage will continue to evolve and see increased capital from the private equity market for that very reason.
“Storage has clearly proven that it is definitely recession resistant, " says Bradley. “When was the last time you heard of a Storage Facility shutting their doors because of a lack of customers? It just doesn't happen. If you compare that to other commercial real estate, such as Retail, Office Space, Hotels, Restaurants- they are all at the mercy of economic and other factors-such as medical emergencies or civil unrest like we saw in 2020.
“The Self Storage sector provides investors with the security they are looking for. No volatility, extremely low risk and a consistent customer base that increases each year regardless of the economy doing good or bad. Everyone has used a storage facility at some point in their life and most of us have stored our stuff for years. It is simply a cash flow business and we are all consumers of Self Storage", says Bradley.
"Covid really was a disaster for commercial real estate- Every sector took a major hit-with the exception of Self Storage- "We thrived during the covid situation. The unique aspect to investing in Storage is the fact that it is a need for those who are financially prospering and simultaneously those who are struggling.
People have different reasons for renting a storage facility, says Bradley-some are sadly having to downsize and they have to put their stuff in storage.
Then there are those who are prospering and acquiring more stuff and they are running out of room in their home and or garage.
The numbers easily speak for themselves- Storage continues to grow and occupancy rates obviously back that up. There are some places where there may even be a waiting list for storage availability.
Factors Making Storage A Strong Recesson Proof Investment
Diverse Customer Base:
Residential: Individuals utilize storage for a wide range of reasons, from decluttering to accommodating temporary overflow during renovations.
Business: Businesses rely on storage for inventory, equipment, and archives, creating a consistent demand across various economic sectors.
Adaptability and Innovation:
Flexible Lease Terms: Many self-storage facilities offer flexible lease options, allowing customers to adjust their storage needs based on their changing circumstances.
Value-Added Services: Increasingly, facilities offer a range of services beyond basic storage, such as packing supplies, moving assistance, and climate-controlled units, enhancing their appeal and attracting a broader customer base.
Recession-Specific Demand Increases:
Downsizing: Economic downturns can lead to job losses and financial strain, prompting individuals and businesses to downsize and utilize storage for belongings they can't immediately dispose of.
Business Failures: Unfortunately, business closures during economic downturns often result in the need to store equipment and inventory.
Stable Revenue Streams:
Consistent Rental Income: Self-storage facilities generate consistent rental income, providing a stable revenue stream for investors and operators.
High Occupancy Rates: Even during economic downturns, self-storage facilities typically maintain high occupancy rates due to the consistent demand for their services.
While no industry is entirely immune to economic fluctuations, the self-storage sector's inherent resilience, coupled with its adaptability and consistent demand, positions it as a relatively stable and attractive investment option.
info@globalcapitalinvesting.com www.globalcapitalinvesting.com
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Cube Smart Storage has Storage Locations Nationwide - CubeSmart (NYSE: CUBE) is a self-administered and self-managed real estate company focused on the ownership, operation, acquisition, and development of self-storage facilities in the United States. AAA Storage in Austin Texas has sold over 90 properties in the last 31 years including a portfolio to Cube Smart-NYSE:CUBE.
Global Capital Investing specializes in General and Limited partnerships with experienced developers and operators like AAA Storage who have prodived a 29.2% return to their Storage Investors over the last 10 years
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