“Everywhere I go, I see self storage being built. Is it becoming over built?”

Have you heard that? Have you thought that?

It often looks like that to me.

How do you, or would you, answer that question?

I usually hear something like “Is there too much self storage being built in Louisville, or Las Vegas, or Phoenix?”

How much self storage there is in New Orleans is an interesting number, but for the most part a meaningless number.

It is interesting to know and then divide it by number of people to get the square footage of self storage per person. But in making a decision to build or not, or buy a facility there, it is for the most part meaningless.

It tells you nothing. Interesting, but irrelevant.

Now, how many square feet of self storage is in the sub-market of the facility you are looking at…. that is a very important number.

How many facilities and the occupancy rates of them in a one, three, and five-mile radius, or in the market area of a site you are looking at. You should be very interested in those numbers. Important and critical.

At the end of the day, no matter how great we think our facilities are, self storage is a sub-market product. People are not going to drive across town to store at your facility. If someone does, it’s rare.

And that’s great for us.

It’s awesome because it allows us to quantify and actually see if there is too much building going on. In that sub-market at least.

And here is an interesting bit of information: I have completed about six or seven feasibility reports so far this year, and only one was in a sub-market getting close to being overbuilt.

One had three facilities within a three-mile radius; three big facilities and there still was a gap between supply and potential demand.

I can’t wait to get the actual numbers, but I am guessing that a larger percentage of the population is actually using self storage now. I know each decade it goes up by approximately 2%, but I bet it has gone up double that in the last six years alone.

Just a guess, but I would bet on it.

I am amazed at how many facilities there are and yet the still strong demand for our product.

Get used to it.

Now I’m not saying that occupancy rates will stay above 90% stabilized for ever.

I’m not saying that there won’t be sub-markets that will be grossly overbuilt.

I am saying that demand appears to be stronger than it has ever been, and I see nothing that tells me that demand will ever drop off significantly.

How much demand dropped off in the Great Recession? 6% or something?

Not bad.

Get feasibility reports!

That is the only way to answer the question “Is self storage being overbuilt?”

We are so lucky that in our business we can quantify our risk by getting the report that quantifies supply and demand for our market area. It is probably more accurate than any product type because of the fact self storage is such a sub-market oriented product.

So how do you answer the question “Is there too much self storage being built today?”

Here is how I answer it:

“Not in the sub-markets I’m building or buying in.”