Inside Self-Storage (ISS) has released its 2018 Top-Operators Lists, ranking the industry’s top 100 facility owners and top 50 third-party management companies by net rentable square feet. The lists include facility and brand owners, independents and property-management firms. The data also features contact information, expansion plans, and each company’s number of locations and units. The lists are featured in the October issue of ISS magazine and available online.

The Top-Operators List was historically issued as a single top-100 ranking by total square footage. For the second consecutive year, ISS has broken the data into separate rankings for owned and managed square feet to reduce the potential for square-footage redundancy that can occur when using only total square-footage figures for all companies in a single list.

A more robust version of the data is available at the ISS Store. The 2018 package includes both complete lists in Excel format as well as a 19-page PDF companion comprising a four-page analytical report of the list results and a full representation of the rankings in easy-to-read format. For the fourth consecutive year, the lists feature data on owned vs. managed self-storage facilities for companies that do both, with breakouts for number of facilities, units and square footage for each.

The report portion of the PDF analyzes growth, decline and general movement among this year's final list participants. It also identifies companies in aggressive growth mode, others that are scaling back, and new up-and-comers in the business. Previous lists for 2012 through 2017 are also available for purchase.

The Top-Operators Lists are compiled annually by ISS. Participation is voluntary and open to all self-storage operators. To be considered for the 2019 list, self-storage operators can complete the online form.

For more than 27 years, ISS has provided informational resources for the self-storage industry. Its educational offerings include ISS magazine, the annual ISS World Expo, an extensive website, the ISS Store, and Self-Storage Talk, the industry’s largest online community.

Stor-Age Property REIT, which operates self-storage in South Africa and the United Kingdom, has opened a new multi-story facility in Bryanston, South Africa, the company’s 50th location in the country, according to a press release. The property at 1 Vlok Road comprises 65,659 square feet of space in 610 units. Stor-Age now operates 20 locations and more than 1.3 million gross leasable area in the Gauteng region, the release stated.

The company’s goal is to grow its services in key suburbs that host established retail, residential and business spaces. “The opening of the Bryanston Stor-Age store reflects the growth trajectory of our service. We aim to meet the needs of the SME [small and medium-size enterprises], household, business and student sectors, and this development demonstrates the success of this growth and reflects the necessity for the self-storage industry,” said CEO Gavin Lucas. “We are extremely positive about the Bryanston development as it extends our valuable service to new communities in Bryanston and neighboring Riverclub, Morningside and the broader Sandton area.”

Earlier this week, Stor-Age also agreed to acquire 12 properties that are currently part of its management portfolio. The company will purchase Roeland Street Investments 2 and Roeland Street Investments 3 for a combined R58 million. The sites comprise about 88,000 square meters of gross leasable space in Cape Town, Durban, Johannesburg, Port Elizabeth and Pretoria, South Africa. The deal is expected to close around Oct. 1, according to the source.

Headquartered in Cape Town, Stor-Age was established in 2005 by Stor-Age Property Holdings Pty. Ltd. to acquire, develop and manage self-storage assets. Today, Stor-Age operates a 63-property portfolio, primarily in four South African metropolitan areas, that comprise approximately 407,000 square meters. It acquired U.K. operator Storage King in 2017. The company was listed on the Johannesburg Stock Exchange in November 2015.

Update 9/13/18 – Cascade has opened its new Roseburg location. The facility offers more than 131,665 net rentable square feet of storage space, according to a press release. Dan Adams is the property manager.

A two-day grand-opening celebration will be held Sept. 28, 3 to 7 p.m., and Sept. 29, 11 a.m. to 3 p.m. The event will include property tours, refreshments and door prizes, including a 43-inch TV.

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9/18/2017 – Cascade Self Storage is building a new facility in Roseburg, Ore., its third in the state. The first phase of the property at 1910 N.E. Diamond Lake Blvd. is slated to open this fall. Once the facility is fully complete next spring, the 3.8-acre site will include five buildings containing 730 storage units and a manager’s residence, according to the source.

The project was designed by Jordan Architects Inc. and is being built by local companies C Weavers’ Construction Inc. and Victory Builders Inc. Permits from the Douglas County Building Department were issued on Jan. 25. The property has an assessed value of $439,913, according to the Douglas County Assessor’s Office.

Cascade was prompted to expand by growth in the area, according to the source. “They believe there is a need for storage in the area and hope to fulfill the immediate demand as well as be a staple in the community for years to come,” said David Meinecke, vice president of Jordan Architects.

Cascade also operates self-storage facilities at 1011 Narregan St. and 2562 W. Main St in Medford, Ore. In addition to self-storage, it owns and operates manufactured-housing communities. All of its properties are managed by HCA Management, a family-owned company founded in 1964.

Source:
The News-Review, New Cascade Self Storage Under Construction in Roseburg

Real estate firm Merit Hill Capital LP has acquired two South Hall Self Storage facilities in Birmingham and Irondale, Ala. The properties at 1945 Hoover Court and 2300 Crestwood Boulevard have a combined 191,309 square feet of rentable storage space in 1,465 climate-controlled and drive-up units, according to a press release. They both include outside parking, while the Hoover location also contains 10 office spaces comprising more than 5,000 square feet. They’ll be managed by self-storage real estate investment trust Extra Space Storage and branded under its name.

The seller was represented in the transaction by Bill Barnhill and Stuart P. LaGroue Sr. of Omega Properties Inc. The men are also broker affiliates in the Gulf Coast region for the Argus Self Storage Sales Network, a Denver-based network of real estate brokers who specialize in storage properties.

Earlier this month, Merit Hill acquired two Houston-area StorIt! self-storage facilities from The Jenkins Organization. Combined, the properties offer 1,088 storage units.

Based in Brooklyn, N.Y., Merit Hill acquires, develops and manages self-storage facilities nationwide. Last year, it launched a $300 million fund with private capital to pursue single-property and small-portfolio acquisitions in markets with at least 25,000 residents and demonstrating population growth.

Headquartered in Salt Lake City, Extra Space owns or operates 1,523 self-storage properties in 39 states; Washington, D.C.; and Puerto Rico. The company’s properties comprise approximately 1.05 million units and 115 million square feet of rentable space.

Formed in 1994, Argus has 36 broker affiliates covering nearly 40 markets.

 

Multi-story self-storage isn’t new. However, what used to be considered only by urban developers is now becoming standard in many markets. Going vertical is often the best way to match efficiency with market demand, no matter the size of the site.

As recently as 15 years ago, it was commonly believed that some markets might not absorb multi-story self-storage projects. I recall hearing advice like, “If prospective tenants use an elevator to get to work or their home, it works. Otherwise, stick to single-story.” It’s questionable whether that was ever true, but the industry has certainly disproven that notion in the past decade. Multi-story is a rising trend for good reason. Let’s examine why.

Market Demands

U.S. population trends provide an interesting backdrop to the rise of multi-story development. According to 2018 census figures, about 31 percent of all housing units are occupied by renters; and we know home renters are often more mobile and generally demand smaller unit sizes—and more frequently—than homeowners.

Population growth and migration patterns are also pushing demand for multi-story storage. In recent years, suburban and exurban/commuter-town growth has outpaced urban growth. Smaller metro areas are growing faster than large urban ones. Urban revitalization and adaptive re-use of vacant warehouses or industrial buildings creates favorable environments for storage operators and developers.

Millennials, who now comprise the largest segment of U.S. adults, are beginning to move further from home. Anecdotally, we believe this generation may be most interested in vibrant life experiences, ease of social interaction, and value-based or temporary housing. At least in 2018, they’re more likely to live in apartments and close to urban centers. They’re a driving force behind the proliferation of micro or economy apartments in cities. Like generations before them, they acquire and need to store their stuff.

Finally, self-storage tenancy is increasing. Here in America, storage has become another luxury, even if demand typically stems from negative or stressful life events. Established facilities benefit from the relative “stickiness” of tenancy. Every wave of new move-ins brings in another small batch of long-term renters, even if customers believe they have a “short-term need.” The regular churn of life events bolsters market demand for the long term.

Business-Model Benefits

Despite the national trends, it can still be difficult to find the right market or site on which to build self-storage. In urban and suburban areas where growth is favorable for new projects, finding a 5-acre site on which to build may be impossible. Vertical construction offers great flexibility to compete in markets where existing commercial buildings may have consumed the best sites with enough acreage for single-story construction.

In addition, sophisticated management and online-marketing platforms have allowed storage operators to drive new tenants to their locations, even when visibility isn’t optimal. This doesn’t mean visibility is no longer important; however, multi-story developments allow self-storage to gain visibility, even from a second-tier site.

Another benefit is new multi-story storage buildings are often fully climate-controlled, meeting the demands of today’s consumers. Climate control certainly isn’t a requirement of multi-story construction, however. Some operators choose to offer these premium units on bottom floors, while providing ambient space on upper levels.

Security can also be enhanced in multi-story. By limiting access to certain loading/unloading areas, security monitoring can be easier within a single structure. Tenant access can be restricted to particular areas or floors, and activity can be easily captured via cameras.

Finally, there’s facility aesthetics. I’d be remiss if I failed to mention how much more attractive multi-story buildings are compared to the basic metal construction that has been the industry standard for so long. Building larger, more prominent facilities give developers an opportunity to set the new business apart from competition with features that appeal to tenant demands for quality and security.

Cost Considerations

It’s true that going vertical adds cost to a development. Smaller sites can also present unique challenges in terms of building timeline, erosion control, and construction coordination and staging. Still, multi-story projects are often the most economical.

Multi-story buildings generally have smaller average unit sizes than their single-level counterparts and are often heavy on 5-by-10s, 8-by10s and 10-by10s. Even the addition of a multi-level building on a larger site can improve overall efficiency and net income. In locations where large spaces or RV-storage units are in high demand, a multi-story building combining smaller units with larger, single-story, drive-up units can push net rentable square feet and income higher without overbuilding.

Keep in mind, too, that multi-story facilities aren’t just for small urban or suburban sites. A 4-acre site, for example, might hold a total buildable footprint of 80,000 square feet; but a three-story, 50,000-square-foot building in addition to 50,000 square feet of drive-up storage space yields more rentable square footage. The gem of this approach is the ability to add larger spaces to the overall unit mix, while competitors are stuck adding smaller units like 5-by-10s and 10-by-10s. For developers willing to push the envelope in terms of rentable square footage, larger units might make it easier to attract more long-term tenants.

Buildings with more than three stories require fire rating on structural elements, which adds considerable cost (as much as $10 per square foot) to the overall budget. Investment analysis almost always compares the lower cost and fewer units of three-story construction against the added building cost per square foot and subsequent higher revenue of adding rentable space with additional levels.

Project Challenges

Developers considering ground-up multi-story projects should understand that vertical construction, while generally efficient as an investment, presents unique challenges. First, staging is often an issue. Small sites don’t have a lot of space for materials. Traffic control can be necessary to get materials and workers into and out of a tight site; however, experienced general contractors understand and plan for these demands. The liquidated-damages sections of your contract should specify reasonable timelines that require the contractor to plan for weather, transportation and general construction delays.

Placing the roof on a multi-story building is a key milestone for the builder. Once most of the structure is protected from weather, trades can begin to work comfortably and effectively. Challenge your contractor to investigate and price different methods of construction that can result in your building being under roof and dried-in as quickly as possible.

Another important consideration is comfortable access. In multi-story environments, the elevators are the main access point for tenants above the first floor. Designers should consider how units are accessed to avoid loading/unloading bottlenecks, and take care to create comfortable space around elevators. In most cases, more than one lift is necessary. If your lone one breaks, so does the whole operation.

Though not all projects are created equal, when elevators are added, you should automatically consider a third floor because it doesn’t dramatically impact cost per square foot. Anything more than that, though, changes everything. The overall construction type alters once you exceed three floors, requiring additional fire rating and driving up costs. A creative way to deal with this is to add a partial mezzanine to the first floor. Building codes allow something like 30 percent of a floor to be covered with a partial mezzanine. For a drive-through facility that requires a first level of maybe 18 feet high, this can add rentable space without dramatically impacting the overall cost per square foot.

Materials can also present a challenge. Steel and exterior sheathing can be primary cost drivers. Glass, metal, brick, block, EIFS (exterior insulation and finish systems), insulated panels, roof style and design all factor into the investment weight of these projects.

With political discussions of trade wars and tariffs, costs are volatile. A three-story building that might have been built for $60 per square foot in 2016 might be as much as $70 per square foot today. Those figures aren’t carved in stone, though. The volatility of the international market means everything could change tomorrow! Regardless, the uncertainty around costs must be planned for by the contractor and investor. External market forces and construction costs require developers to carry larger contingencies in their development budgets.

Even with all the potential challenges, the self-storage industry will continue to erect more and more multi-story buildings. You’ll find them precisely where market demand meets profit.

Benjamin Burkhart is owner of StorageStudy.com, which provides feasibility studies and development consulting to self-storage developers and owners nationwide. He can be reached at 804.598.8742 or [email protected]. 

Isabelle Cobb and Janice Danielson, managers of Bainbridge Self Storage in Bainbridge Island, Wash., continue to help pets displaced by natural disasters through Kitsap SPICE (Saving Pets In Crisis Everywhere), a charitable organization they founded last year after the British Columbia wildfires. This week, Cobb is delivering supplies to the Siskiyou Humane Society (SHS) and the nonprofit Saving Shasta Cats Inc. to aid animals affected by the Delta Fire in Siskiyou County, Calif., according to the source.

The contributions were made after the women saw a plea for pet carriers from Nicole Dwork, who works for both organizations, on the SHS Facebook pages. “People don’t typically have pet carriers lying around in case of an emergency, so we needed a lot of them when the fires started and people needed to transport animals from their homes.”

Dwork said she was surprised when Kitsap SPICE reached out to her, but grateful for the support. “It’s just fantastic that they were able to provide such a great gift,” she said.

Shortly after the British Columbia wildfires began, Cobb and Danielson collected donations of blankets, cat litter, pet food and carriers at their storage facility, later delivering the items to organizations in need. “We ended up making five trips up to [British Columbia] with trailer loads of donations,” Danielson said.

After the ordeal, the two began stockpiling pet supplies in a storage unit. “People talk about being ready, but in a pinch, people are not ready if they have to evacuate their animals. So, we thought we would start putting stuff in a storage unit, and we’ll try to be ready if something bad happens here,” Danielson added.

The British Columbia wildfires burned more than 3 million acres during July to September 2017. About 40,000 animals were displaced during the disaster, Danielson told the source.

The managers also started an emergency fund through the Kitsap Community Foundation, a local philanthropy-services organization. The money raised through fundraisers and calls for donations is sent to animal shelters near ongoing disasters. To date, funds have been sent to organizations in Austin, Texas, and Ventura County, Calif. Donations are accepted at the Bainbridge facility.

Bainbridge Self Storage is owned by Urban Self Storage Inc., which was founded in 1987. The company operates more than 65 facilities in Arizona, New Mexico, Oregon and Washington.

Source:
Kitsap Daily News, Kitsap Women Help Pets Displaced by Wildfires

 

Access Storage of Bomaderry, New South Wales, Australia, won an award for excellence in the “Best Upgrade or Expansion” category from the Self Storage Association of Australasia (SSAA). The operator added 200 new units last year to its property at Corner Meroo Road & Victa Way.

“The judges felt that this facility, as a family-owned business combining sustained, proactive management and good customer service with an environmental conscience, is a clear example of a small, provincial success story,” stated a press release.

Access Storage is just off Princes Highway, which is undergoing a $400 million upgrade. The facility now offers more than 500 units, and serves the communities of Berry, Bomaderry, Kangaroo Valley, Shoalhaven Heads and additional suburbs north of Shoalhaven River.

With more than 850 members and growing, the SSAA represents the self-storage industry of Australia and New Zealand. Founded in 1990 by a small group of operators and suppliers, has evolved into a trusted and professional advisory body, representing approximately 1,500 facilities.

Source:
PR Wire, Nowra Storage Winner: Access Storage Take Home Self Storage Association of Australia Award

Stor-Age Property REIT, which operates self-storage facilities in South Africa and the United Kingdom, has agreed to acquire 12 properties that are currently part of its management portfolio. The company will purchase Roeland Street Investments 2 (RSI2) and Roeland Street Investments 3 (RSI3) for a combined R58 million. The sites comprise about 88,000 square meters of gross leasable space in Cape Town, Durban, Johannesburg, Port Elizabeth and Pretoria, South Africa. The deal is expected to close around Oct. 1, according to the source.

Stor-Age had pre-emptive right to purchase the facilities. The 11 RSI2 properties are being acquired from Acucap Investments, a subsidiary of Growthpoint Properties, Stor-Age Property Holdings and The Fairstore Trust, for R43.5 million.

The combined portfolio had 73 percent occupancy at the time of the sale agreement. Eight RSI2 properties were still in lease-up, with an average occupancy of about 40 percent. Three other RSI2 properties were built in 2016. The lone RSI3 facility was developed last year. All the assets already are branded as Stor-Age, the source reported.

Once the deal closes, the Stor-Age portfolio will be worth about R5 billion, with 70 percent of its facilities in South Africa and 30 percent in the U.K., according to the source. Its South Africa portfolio will increase to 353,000 square meters.

Headquartered in Cape Town, Stor-Age was established in 2005 by Stor-Age Property Holdings Pty. Ltd. to acquire, develop and manage self-storage assets. Today, Stor-Age operates a 63-property portfolio, primarily in four South African metropolitan areas, that comprises approximately 407,000 square meters. It acquired U.K. operator Storage King in 2017. The company was listed on the Johannesburg Stock Exchange in November 2015.

Source:
Engineering News, Stor-Age to Acquire Self-Storage Properties in Major Cities for R58M