Where We Operate
The self-storage industry has historically been highly fragmented, with publicly traded companies comprising a mere 10% of the industry. These metrics have led to a consolidation charge led by public REITS and other large operators with the bulk of their acquisition interest lying in urban property portfolios. In fact, institutional investor’s preference for urban core product is evidenced by an increasing gap among resale cap rates for the spectrum of storage asset investment classes – classes that are largely defined by property location.
Many smaller operators lack resources and expertise to develop urban infill self-storage product while large, publicly traded self-storage companies lack the agility and entrepreneurial vigor to execute new urban development.
Urban Center Characteristics
- Higher Population density and smaller housing units
- Disproportionally low supply of self-storage product
- Higher storage rents and occupancies in urban markets.
- More opportunity for rent growth compared to suburban counterparts
- Higher entry barriers which preserves investment value
- Higher exit valuations
- Absence of new construction in urban cores
Obsolete zoning code and major housing growth has led to a scarcity of land parcels suitable for storage development. Fundamentals are extremely strong to create new purpose built product to replace the aging vintage of current storage supply.
Barriers to entry that have existed for generations consist of challenging landowners and deal negotiations to sophisticated construction approaches and methodologies. Due to these constraints new York remains a highly underserved storage market.
The Capitol continues to be a solid housing and employment hub benefiting from large populations of transient workers relocating and residing in ever shrinking multifamily units. Although challenging from a zoning perspective being a local expert creates opportunity where others see risk.
An international city where the influx of foreign capital has driven land prices up. Finding suitable land for storage development is a challenge but rewarding once quality sites have been isolated. Working with the best land use attorneys and architects creating opportunity is key.