Short answer: Not on its own. Mark calls it a myth that existing storage square feet per person gives a clear picture of supply and demand. It ignores facility quality, overlapping trade areas, demographics, density, the health of the area, visibility and pricing behavior. Live competitor pricing is often a better signal.
What the metric misses #
- Not all competitors are equal. An old gravel facility with no office or security draws far fewer customers than a new one, yet both count the same.
- Overlapping trade areas. A facility 4.9 miles away in a 5-mile radius may only overlap a small slice of your real trade area.
- Demographics. Income, population growth, education and density all change demand. In higher-income areas, older facilities may barely compete for the same customers.
- Quality of the area. Grocery-anchored centers, national retailers and other signs of a healthy local economy matter.
- Visibility. Hidden facilities count the same as a new one on a main road.
- Pricing. The metric says nothing about REITs, sophisticated operators or discounting in the trade area.
A better signal #
Mark values subscription services that scrape competitor websites for live rates and discounts. He has seen “overbuilt” trade areas, well above 9 or 10 square feet per person, with almost no discounting, which suggests strong demand. He has also seen low square-foot-per-capita areas where offered rates were far below what he had underwritten.
He doesn’t throw the number away entirely, but gives it a back seat to these other factors.
Related answers #
- What makes a good self-storage trade area?
- Why does visibility matter so much for a self-storage facility?
- Do you need a feasibility report and competitor analysis before buying or building?
Source: Mark’s post The Square Foot per Capita Myth
