‘Indestructible’ Self Storage Industry is Booming

RU²  /   May 17, 2023

‘Indestructible’ Self Storage Industry is Booming

Original Article by Tom Mooney: ‘Indestructible’ Self Storage Industry is Booming

SPRINGFIELD, Mass. — “At the end of the world, everyone says there will only be Twinkies and cockroaches left,” says Courtney Kahler, “and I’ve added self-storage to that. It’s an indestructible industry.”

Kahler, the executive director of the 325-member Northeast Self Storage Association, sits at the registration table greeting morning attendees at the organization’s annual trade show, many of them self-storage entrepreneurs who know they hold a winning business hand.

Their ace in the hole, the one certainty fueling a proliferation of self-storage facilities across the country?

“People do not want to get rid of their stuff,” says Kahler. “It’s a phenomenon.”

Self-storage has grown exponentially but faces pushback

About 51,200 storage facilities are now operating in the United States. That’s more than twice the number of Subway sandwich shops, says industry tracker StorageCafe.com. Enough new facilities were approved just last year to cover all 843 acres of New York’s Central Park.

StorageCafe.com says 1 in 5 Americans are now using a self-storage unit (the most common item stored is furniture), though other industry trackers say the figure is more like 1 in 10 Americans. Still, that’s a lot of storage.

The industry’s expansion has met some resistance in recent years. Communities from Milford, Connecticut, to Vancouver, Washington, have placed moratoriums or zoning restrictions on new self-storage unit facilities, with nearby Worcester joining that list last month.

In Providence, Rhode Island, which has 17 operating or in-the-works self-storage facilities, some city council members are calling for a moratorium and questioning whether the land might be used for housing instead of sprawling metal squares.

“What we’re seeing is this industry … gobbling up a lot of land that, in our opinion, should be used for other purposes,” said Councilman Miguel Sanchez last month.

The Northeast Self Storage Association represents businesses in Massachusetts, Connecticut and Rhode Island, which host about 100 to 125 storage facilities, the association says.

‘Everyone is trying to jump on the self-storage bandwagon’

Trade show attendees have come to hear experts on a list of topics, including: the proper steps to evicting a non-paying tenant; how to legally auction off the belongings from an abandoned unit (the auction, for instance, must have drawn at least three unrelated bidders); hiring a management company to run your business; tips on social media advertising; and the latest in self-storage technology.

The business is no longer about simply flipping a renter a key. Now, contract agreements can be done online with a credit card and without ever meeting your tenant, who can use a cellphone app to open a facility’s security gate and then unlock their own unit door.

“There’s always something new happening in self-storage,” says Katherine Lescault, general manager of 401 Storage, with facilities in West Warwick, Rhode Island, and a new 930-unit business along Warwick’s Post Road. “New laws, new marketing, new strategies. It changes all the time. We’re here to pick people’s brains a little.”

With her is nephew Ryan Medeiros, who’s the technology expert at the Warwick facility (it opened in 2020) and who knows many of the tenants on a first-name basis.

Their big concern this morning? Competition from those few corporate behemoths like U-Haul, who prowl around expanding markets like Rhode Island’s and can chew up smaller companies like theirs.

“When they smell blood in the water, they come running,” says Medeiros. “It took us three years to open our facility in Warwick” completing market and traffic studies, presenting plans at zoning meetings and getting final city approval. “And within a year they built right down the street from us.”

“They,” in this case, is CubeSmart, another big self-storage corporation, with a new facility on Jefferson Boulevard.

“It’s like we did all the work for them,” says Lescault. “Everyone is trying to jump on the storage bandwagon.”

‘No food, no drugs … no bodies’

A self-storage operator cannot tell a renter what they can keep in their unit, but they can tell them what not to store.

“Whenever I move someone in,” says Medeiros, “I always say: ‘No food, no drugs, no explosives, no guns and no bodies.’”

The body reference “is sort of a joke,” he says, “but you can’t say I didn’t say it.”

Human remains have turned up in storage units before.

In 2014, a Massachusetts man who offered the winning bid for the contents of an abandoned storage unit in Johnston discovered the decomposed remains of two adults and a baby amid the furniture and boxes.

Authorities at the time said documents found in the storage unit connected the bodies to the Pennine Funeral Home, in Providence. It had not paid its storage fee for more than six months. The funeral home’s director, Alfred Pennine, had recently died by suicide, leaving a half dozen other bodies and 45 sets of cremated remains unattended on the funeral home property.

‘Storage Wars’ show helped drive auction popularity, but don’t expect to hit gold

The concept of self-storage has been around in America since the mid-1800s, when pioneers rented corners of barns and warehouses to store belongings before striking out to settle new country.

But it was the 2010 television show “Storage Wars” that turned a utilitarian necessity into living-room entertainment, as viewers tuned in to watch whether hidden treasure awaited the lucky bid winner of that next abandoned storage unit.

“Storage has changed a lot since that show was first on,” says Lescault. “You couldn’t get three people to go to an auction until that show came on.” Now bidders can show up in numbers, hoping a forgotten Harley-Davidson lies hidden under those ugly curtains.

Medeiros shakes his head at the mention of the show.

“Customers all the time ask, ‘What’s the best thing you ever found in a unit?’ Nine times out of 10, if a unit is for sale, it’s because people left an old couch in there, and we have to go through the legal steps to throw it out. But because of that show, people think they’re going to find a car under that couch.”

Self-storage has always catered to people in transition

Charlie Fitts has been in the self-storage business for 30 years, owns a management company outside Buffalo, New York, and is president of the Northeast Self Storage Association.

He says his business has always catered to people in transition: the aging baby boomers looking to downsize; younger folks moving or getting divorced, with no place to temporarily store their kayaks, bedroom sets and their child’s fourth-grade art project; or building contractors who need equipment space.

Units range in size from 5-by-5 feet to 10-by-30, with climate-control conditions that can cost more than $500 a month to rent. But the average monthly rental price for a 10-by-10 unit is between $120 and $150, with urban areas being more expensive. The average lease runs for about 12 months.

“Sometimes our reputation gets marred because somebody had some bomb-making stuff in a storage unit or somebody found a dead body,” says Fitts. “That seems to make the national press, but it’s not really a good indication of what the business is about.”

He says he’s sensitive to the issue of more housing; he worked in the multifamily business for 13 years and understands that finding adequate housing for people is “a great necessary service.”

The self-storage industry is also a community benefit, he says, providing the same amount of real estate tax as an apartment building would with far less impact on public utilities and schools.

A generation or two ago, Americans were more selective about what they held on to, says Fitts. Or perhaps they were less fixated on consuming so much; today that’s an almost effortless act.

You just take out a cellphone, he says, and that new stationary bike arrives at your door the next morning.

“Stuff’s coming in the door,” he says, “but it’s not going out.”

Then what?

“That’s the whole meaning of life, isn’t it?” comedian George Carlin once asked. “Finding a place for your stuff.”

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