What Makes Secondary Self Storage Markets Appealing
April 17, 2019 | Evelyn Jozsa | Commercial Property Executive
In the past year, self storage was defined by high development activity. Due to substantial population and job growth, markets such as Portland or Nashville steadily increased throughout 2018. However, metros in Texas—including San Antonio and Houston—are oversaturated and need to limit their new supply pipeline. These examples show that self storage markets are highly diversified, with economic and demographic trends distinctively impacting them.
Commercial Property Executive reached out to Curt McCall, director of CBRE’s self storage specialty practice for Valuation and Advisory Services. He revealed the characteristics of emerging secondary markets and also shared his insights on the sector’s prospects.
What makes a secondary market attractive?
McCall: I believe it still gets back to fundamentals. Self storage remains micro-oriented with demand generators concentrated in an immediate trade area. From an overall market standpoint, it is important to analyze the longer-term prospects of the area. Moreover, it is important to look at how diversified the economy is, what is the employment base, demographic trends, relationship of owner versus rental units and the overall saturation level of existing product. Other factors include assessing the development climate, whether governments encourage or discourage growth and the availability of land.
