Though the Denver City Council recently banned self-storage development within a quarter-mile of any regional transportation district as well as suburban and downtown Main Street zones, some experts say the industry impact will be negligible. In fact, the restrictions could actually increase property values, according to Adam Schlosser, first vice president of investments for the National Self Storage Group division of commercial-property investment firm Marcus & Millichap.
“Impact will be minimal, as it affects a very small portion of the city,” Schlosser told the source. “Self-storage sites that would have been affected by this law got in before it was implemented.”
The Denver market was largely undersupplied with self-storage before seeing heavy development during the last four years, Schlosser said, noting the influx of activity increased new square footage by nearly 35 percent of existing stock. As a result, areas within the metropolitan market are now oversupplied. “Self-storage is a localized business, so fortunately, it should be restricted in certain pockets,” he noted.
Schlosser doesn’t believe the new building restrictions will curtail investment. Instead, they could drive up the investment value of self-storage assets. “There will be next to no [investment] effects, but the restrictions could help increase the value of existing facilities, as they create new barriers to entry in the downtown submarket.”
Founded in 1971, Marcus & Millichap is a commercial-property investment firm with more than 1,500 investment professionals in offices throughout Canada and the United States.
Source:
Commercial Property Executive, A Closer Look at Denver’s Self-Storage Market
