search.noResults

search.searching

saml.title
dataCollection.invalidEmail
note.createNoteMessage

search.noResults

search.searching

orderForm.title

orderForm.productCode
orderForm.description
orderForm.quantity
orderForm.itemPrice
orderForm.price
orderForm.totalPrice
orderForm.deliveryDetails.billingAddress
orderForm.deliveryDetails.deliveryAddress
orderForm.noItems
THE FUTURE IS BRIGHT


having shortages of available storage at this time. Transactions in 2021 showed a strong market for storage facilities, and this is expected to continue into 2022.


Continued Impact Of COVID As Canada continues to deal with CO- VID-19 and the new Omicron variant, we see continued impacts on the economy as a whole, with stricter lockdowns in many provinces as well as new travel restric- tions for international people. The Omi- cron variant has clouded the outlook for interest rate increases as well as for the expected economic recovery as the full impacts of Omicron (and potential future variants) and the different levels of gov- ernments reactions to them are yet to be seen. Even with this ongoing uncertainty, the self-storage industry is expected to continue to perform similarly to late-2020 and all of 2021 into 2022.


Keep Your Eyes Peeled One of the biggest unknows in the self- storage market is the impact increasing interest rates could have on valuations of storage facilities. Typically, when rates rise, we see the same rise in capitaliza- tion rates, which in turn leads to a de- crease in market values. The Bank for Canada has indicated that the market should expect several incremental in- terest rate increases over 2022, but it did not give a firm timeline of these in- creases. This should be closely watched by owners who may be considering a sale or are planning to refinance their prop- erties, as any increases could negatively impact values and financing rates.


It has been long rumored that the


liberal government has been examining changes to capital gains inclusion rates. Any changes to this inclusion rate could have a very negative impact on own- ers who plan to sell a facility, especially if they have held the facility for a long period of time. As nothing has been an- nounced as of the writing of this article, this is still speculative, but it should be a very real concern for any owners think- ing about exiting the industry in the near future.


January 2022 9 The final things I feel should be


watched closely are the continued increases in construction costs as well as continued delays in construc- tion due to labor shortages and sup- ply chain issues. This not only im- pacts anyone thinking about building a new facility or those already under construction, but it will impact re- placement costs for existing facilities as well; therefore, it will most likely increase insurance rates moving for- ward. 2022 would be a good year to revisit your insurance policy to en- sure your facility is properly covered in case of a catastrophic loss as costs have changed significantly over the past couple of years and most facili- ties are most likely under insured at present.


Overall, the self-storage industry


remains one of the most desired and hottest asset classes in Canadian real estate. This is due to the stabil- ity provided by a diverse customer


base, rate flexibility that is a great hedge against rising inflation, and because of the barriers to entry into the industry posed by municipal restrictions and soar- ing construction costs as well as a scar- city of suitable land for development. The outlook for the Canadian self-storage industry, despite the current economic headwinds seen within Canada, is robust for 2022 and beyond.


•••••••••••••••••••••••••••••••• Patrick Wood has been active in the Canadian self-storage industry since 2015, first as an appraiser who spe- cialized in self-storage appraisals and feasibility studies and now as a com- mercial real estate broker specializing in the self-storage asset class. In 2021, he was involved in over $150 million worth of self-storage transactions. He currently works for William Wright Commercial Real Estate based out of Victoria, B.C. He can be reached at pat@williamwright.ca.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36