If there is one thing that can be counted on in the business world it is the fact that a good idea is going to be copied by others. It will not be copied by just a couple, but by as many people as possible until a market is saturated. As long as a business is profitable, what’s wrong with emulating success?
Global Income Fund, Inc. would say there is absolutely nothing wrong with it. That is why they are going to be switching the focus of their business to the self storage industry.
The investment company has filed a proxy statement with the Securities and Exchange Commission of its desire to seek shareholder approval to go from working primarily with closed end funds and fixed income securities to one that will focus on investing in the self storage industry. GIFD will look to be categorized as a REIT, real estate investment trust.
In an industry with over 30,000 companies, there are five that own roughly 10 percent of the total number of self storage facilities around the country, somewhere in the vicinity of 50,000 facilities and over 2 billion square feet of space. Four of those five are REITs.
The self storage industry is one that done well in spite of the poor economic times that the nation is going through. Close to 11 million people now have a self storage unit, a number which is about 65 percent higher than it was 15 years ago.
That success and growth has shown in the accounting books too. In 2010, the industry produced over $20 billion in revenue.
Global Income Fund, Inc. will find that getting into the industry will not be an inexpensive endeavor. Another REIT recently acquired 22 self storage facilities in Texas, approximately 1.3 million square feet of self storage space, for $110 million. The same REIT spent another $9.5 million on one self storage facility in Atlanta.
Not all facilities are going for such high prices. Autumn Acres Self Storage in New York recently sold for $330,000 (being in financial distress likely helped lower the price). Earlier this year, Charlotte County Self Storage in Florida went for $625,000.
Certain factors have definitely helped the industry thrive during these tough economic times. Military personnel account for roughly four percent of all self storage units (approximately 700,000). As long as the war on terror continues that is not likely to decrease. With many people forced to downsize their homes and living arrangements due to lower income (if any income), self storage facilities are likely to stay in high demand.
Sources Used:
“Global Income Fund Announces the Filing of a Preliminary Proxy Statement to Change to a Self Storage REIT.” Market Watch; 14 October 2011.
“Autumn Acres Self Storage in Syracuse Sold for $330,000.” Inside Self Storage; 13 October 2011.
“Self-Storage Units: Part 1.” LifeGoesStrong.com; 12 October 2011.
“Sovran Self Storage Acquires Assets.” DailyMarkets.com; 23 September 2011.
“Charlotte County Self Storage in FL Sold for $625,000.” Inside Self Storage; 30 June 2011.
2011 SSA Fact Sheet; Self Storage Association.