I was reminded by a friend and someone I have been working with for a number of years just how naive I was four or five years ago about the self storage industry.
I remember writing and saying, “With all the data and technology available today, there is no need for overbuilding of self storage. It is possible today to have a soft landing and not put more square feet in markets and trade areas already at equilibrium, thus causing oversupply.”
Boy, I sure was wrong about that.
I left out one important factor… the greed factor all humans can tend to exhibit.
Then private equity funds jumped into the mix in a big way doing deals that make no financial sense on the surface.
Let’s discuss how the double whammy of increased construction costs and higher interest rates may affect this segment of the self storage space.
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