The Rapid Growth And Development Of Self Storage Facilities

Self storage through is the solution for individuals who have the tendencies to acquire and hoard stuff. A few decades ago, not many people are aware of self storage because the home was enough to store their belongings but as families started to accumulate stuff in their homes, it soon outpaced the capacity to store them in garages which led to the great demand for self storage. In some areas, self-storage facilities have 100% occupancy and they keep a waiting list that is as long as two pages.

One example is Sovran Self Storage whose profits shot up to about $28.5 million in the second quarter compared to the $20.6 million it earned in the same period last year. Sovran is a self-storage facility in Williamsville and the reasons for the increase in its profits are cited as increased occupancy, rental rates and controlled operating costs.

Sovran Self Storage is on the process of expansion and it has recently purchased 9 new self storage facilities for a total of about $75 million. It has also contracts to purchase another 13 stores for a total of $85 million. A year ago, the shares of Sovran Self Storage was trading for $76.05 but in the Thursday trading it was $92.42 per share.

Self storage facility development is also surging in southern Wisconsin. U-Haul self storage facilities have been popping up all over the Milwaukee area from the new Metro Self Storage in Brown Deer to the recent purchase of the Harley Davidson plant in Wauwatosa. Other recent developments include conversions of a 48,000 square foot industrial building at Megal Drive in Menomonee Falls, the 124,247 square foot Iron Mountain Building in Milwaukee and the 232,200 square foot former Coca Cola bottling plant in Silver Spring Drive Milwaukee.

According to Brian Parrish, president and CEO of Milwaukee-based PARADIGM Real Estate LLC, this has been the trend in recent years but it has ramped up in the last 12 to 18 months. With all the ongoing projects, Parrish predicts that at least 4,878 new self-storage units will come out in the market in Southern Wisconsin by the end of 2015 or early 2016. Local players are rapidly expanding to defend the territory from out-of-state players.