Section 1 • Industry Profile


Professional Self-Storage Management. Noticeably absent from the list last year, Morningstar Properties emerged again this year in the 43rd position. On the contrary, operators that dropped off of the list this year after selling off the majority of their facili- ties or being acquired altogether by another company include Stor-All Systems based in Deerfield Beach, Fla.; Houston, Texas- based Private Mini-Storage; Storage Management Associates in San Antonio, Texas; the EIM Group based in Lodi, Calif.; and Ravn West Properties in Bend, Ore.


For the most part, major operators


and investors set their focus on Class A facilities because of the operational value that comes from being in a prime location with good drive-by traffic and great visibility.


The quality, location, and age of facilities is a significant fac-


tor for most of the major operators—especially the REITs and the institutional investors. In terms of quality, self-storage facili- ties fall into one of three classes:


• Class A • Class B • Class C For the most part, major operators and investors set their


focus on Class A facilities because of the operational value that comes from being in a prime location with good drive-by traffic and great visibility. In addition, these properties boast excellent management professionals who may or may not live on site but who have excellent management and organizational skills in- cluding sales, customer service, and marketing. More often than


20 25 30 35 40 45


10 15


0 5


Midwest Built Before 1980 Northeast Built Between 1980-1989 36 Self-Storage Almanac 2015 South Atlantic Built Between 1990-1999 Southwest Built Between 2000-2009 West Built 2010 or Later National Source: 2014 REIS, Inc.


not, these are also newer facilities built with state-of-the-art con- struction materials and high-tech security, access control, and in some cases, climate control. Class B facilities, while not as desirable as Class A, are located


in good to average locations, often with modest visibility. Al- though they may be in good condition, they may not be as new or have the excellent curb appeal that a Class A site typically has, and they usually lack the “bells and whistles” seen at newer fa- cilities. Even with adequate security and management in place, these facilities do not command the high rents garnered at Class A sites. Least attractive to most investors are the Class C facilities,


many of which are first-generation sites in need of rehabbing. Built in single-story rows, they evoke the stereotypical image of self-storage. With less desirable locations and low visibility, they typically command lower rents. While not targeted by major op- erators or institutional investors, Class C facilities can be a good investment for smaller entrepreneurs, especially given that they have lower operational costs. Moreover, these facilities do serve as a viable option for those who prefer a less expensive means of storing goods. As seen in Chart 1.4, with the exception of the West, the


majority of facilities in all regions were built between 2000 and 2009. While the Northeast saw approximately 40 percent of its facilities built in this timeframe, the other regions range from the high 20 to low 30 percentile. For facilities built in 2010 or later, the numbers remain relatively flat with very limited growth com- pared with the years prior to the economic downturn. In general, while the outlook for the industry is good, it is


more important than ever that owners, operators, develop- ers, and investors understand that self-storage is a localized business. Consequently, independent studies on demand, saturation, and market feasibility should be performed by an ex- perienced self-storage professional.


Chart 1.4 – Facility Age (By Percentage of Facilities and Year Built)


Percentage of Facilities


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