SpareFoot, a leading online marketplace in the self-storage industry, recently published their latest “Storage Trends Quarterly”, a quarterly look at the performance of the self-storage industry and customer behavior. This issue wraps up Q4 as well as the year of 2013 as a whole with a look toward 2014. Suffice it to say, things are definitely on an upward trend in the self-storage business.
Due in large part to favorable interest rates and low cap rates, 2013 was all about acquisitions. Public Storage Inc., the largest publicly traded self-storage REIT, made more than $1 billion in acquisitions alone.
This trend doesn’t look to slow down in 2014. “The acquisitions market has come to a rolling boil,” David Rogers, Uncle Bob’s Storage CEO, said, “with a plethora of deals hitting the market.”
Self-Storage investment continues to remain an active industry, largely, due to a seemingly endless increase in demand. Populations have become more transient, leaving more people in need of self storage to help facilitate moves. SpareFoot conducted a survey of hundreds of storage customers over the months July-October 2013. Over those months anywhere from 35.72 to 55.57% of respondents needed storage either because they were relocating and needed a storage unit for their move or were students in need of temporary storage space.
A separate SpareFoot survey, published in May 2013, showed one in six American adults had moved in the previous year. Of those, 57% had moved less to a home less than 25 miles from home. There’s no doubt about it, American communities are constantly on the go and self storage has become an increasingly more popular option for making this evolution easier.
One type of community which may best exemplify the growing transient population is the college town. College towns by their very nature are home to non-permanent residents. It stands to reason then the populations of those towns will be dramatically different over a period of time, but what we’re seeing isn’t just populations which are changing. They’re also growing at a significant rate as they continue to change.
Each of the ten fastest growing college towns from 2000-2010 saw a population increase of at least 23.34% over that time period. Those rapidly growing communities and their growth rate are as follows.
• Raleigh, North Carolina (North Carolina State University) – 46.29%
• College Station, Texas (Texas A&M University) – 38.25%
• Las Cruces, New Mexico (New Mexico State University) – 31.44%
• Gainesville, Florida (University of Florida) – 30.29%
• San Marcos, Texas (Texas State University) – 29.25%
• Columbia, Missouri (University of Missouri) – 28.36%
• Fayetteville, Arkansas (University of Arkansas) – 26.76%
• Flagstaff, Arizona (Northern Arizona University) – 24.53%
• Auburn, Alabama (Auburn University) – 24.18%
• College Park, Maryland (University of Maryland) 23.34%
Projections from the National Center for Education Statistics predict college enrollment for students younger than 25 years of age will rise by 11% from 2010 to 2020 with enrollment for students older than 25 increasing by 20% over the same period. So this growth in college communities should continue to grow, and with it the need for self storage to serve a growing transient population.