Ask on the street if anyone wished they had a crystal ball, or the DeLorean from Back to the Future, and it would be surprising if there was a single person that said no. If you asked anyone that has ever gone into business, self storage or otherwise, if they could find out what pitfalls might be ahead of them and there is not a one that would not give an enthusiastic yes.
Predicting how an industry is going to act in the next year is something that people have tried to do for years. The stock market crash that preceded the Great Depression is a stark reminder that it doesn’t always work. However, ask anyone that invested in Apple early on and they’ll tell you it does.
With the economy not doing so well in recent years, people have looked for any and every indicator that could tell them how well a given business entity is going to perform. The self storage industry has begun to garner more and more interest from investors as it has shown during these tough times to be rather resilient.
The self storage industry has been doing well in spite of the economy. So does this mean that no is the time to get in? Or is it too late and the industry is likely to plateau, begin to dip, or even worse—crash?
In a recent article in the SSA Globe written by Tom Comi, several industry professionals were asked for their expert opinion on one question—how will the self storage industry look in 2012?
The answers that they gave varied, as could be expected whenever a broad cross-section of people are asked the same question. Across the board the responses were pretty favorable, although to varying degrees.
The professionals were not all people who owned and ran self storage facilities, but ones that were involved in related businesses like restoration, financing, and technology. The ones mentioned in the SSA Globe article essentially stated that they felt pretty good about how their business was going to do well in regards to the self storage industry.
Development of new facilities will be slow at best, but that there will still be interest in taking existing facilities and remodeling and re-branding them.
The success of related businesses is a good indication, but what about people in the self storage field?
According to the professionals that the SSA Globe talked to, they see the industry as continuing to do well. There were some that were looking to do additional things like offer mobile storage and see if they can offer more/better supplies to increase revenue (like Nate Armstrong of Granite Storage in Rhode Island).
Nancy Harris-Burford mentioned that Harris Mini-Storage in Florida is expecting the upswing they saw in 2011 to continue even though they do not look to do anymore advertising than they have in recent years.
Does the consensus opinion of these industry professionals mean that the self storage industry is a safe investment? Or could they be biased since they are in the industry and their livelihood is dependent on it?
Some recent data compiled by the Wall Street Journal supports their assumption. According to the Journal, the industry is currently hovering around 90 percent occupancy with rental rates rising from 3-10 percent over the last year alone.
So does the entire aforementioned mean that the self storage industry is going to do well in 2012? Sadly, the only thing that can tell us that is a non-existent crystal ball or the Back to the Future DeLorean.
Sources Used:
“How will the Storage Industry Look in 2012?” SSA Globe; January 2012.
“Storage industry grows along with public interest.” GoErie.com; 05 January 2012.