2007 Annual Survey News Release
SIA Annual Survey Assesses Macroenvironmental Trends in Self-Storage Industry
Houston, TX, August 13, 2007 --(PR.com)-- Overbuilding and oversupply of facilities are the key macroeconomic issues facing the self-storage industry in 2007, according to an annual survey of self-storage property owners conducted by Storage Investment Advisors (SIA), a Houston-based investment real estate services firm focused solely on the self-storage industry.
The survey – disseminated during the first quarter of 2007 to SIA’s proprietary database of self-storage property owners nationwide – received responses from 116 owners.
Twenty four percent of respondents indicated that “overbuilding,” oversupply” and “market saturation” were the primary macroeconomic issues facing the industry this year. Interest rate fluctuation and the consolidation of ownership by institutional/large portfolio investors were, respectively, the next most frequently mentioned issues noted by survey respondents.
While these issues were also prevalently mentioned in the previous year’s edition of SIA’s survey, property owners ranked tax issues, rising insurance costs and economic uncertainty caused by increasing gasoline prices as the key macroeconomic issues facing the self-storage industry in 2006.
“The supply and demand trends identified as 2007’s key issues have been gaining traction during the past few years as the self-storage development boom was in full swing. As a result of this increasing development, some markets now have an oversupply of storage units and owners are finding it difficult to raise their rents, thus negatively affecting their revenue and occupancy projections,” says Aaron Swerdlin, SIA’s managing partner.
“Last year, our survey responses reflected the initial shock of dramatically higher gas prices and insurance premium rates for property owners. It seems those issues, in particular, have now settled into the consciousness of our industry. Owners clearly recognize higher taxes, insurance rates and gas prices are now part of their operating landscape and not disappearing at any point in the near future,” he continues.
2007 survey respondents reported current physical occupancy levels at their facilities ranged from 65 percent to 98 percent, with the average being in the 85-89 percent range. While some survey respondents were single property owners, others were publicly held real estate investment trusts that own and operate 1,100-plus properties.
Swerdlin further comments: “The SIA survey results offer a snapshot of what is on the minds of the nation’s self-storage property owners at a specific point in time. We have been able to identify some broad trends that affect self-storage property purchasing and financing behavior, and use this data to better advise investors with their real estate needs.
“What I find most interesting is that had the survey been conducted this summer, the interest rate and capital markets concerns certainly would have been at the top of the list, while overbuilding and oversupply might not have even made it on to the list of top five issues. Today, the overbuilding issue seems to have evaporated while capital market concerns have taken sole possession of what is on investors’ minds.”
Storage Investment Advisors, LLP
Founded in 2006, Storage Investment Advisors manages self-storage property dispositions, acquisitions and capital market executions/financing on behalf of institutional and private capital clients. SIA team members have bought, sold, brokered and financed more than $1.2 billion worth of self-storage real estate, collectively making SIA the industry’s leading real estate services firm based on transaction volume. Headquartered in Houston, SIA also has an office in Los Angeles.
For more information about the 2007 survey, please call 713.838.8000 or email info@siallp.com.
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The survey – disseminated during the first quarter of 2007 to SIA’s proprietary database of self-storage property owners nationwide – received responses from 116 owners.
Twenty four percent of respondents indicated that “overbuilding,” oversupply” and “market saturation” were the primary macroeconomic issues facing the industry this year. Interest rate fluctuation and the consolidation of ownership by institutional/large portfolio investors were, respectively, the next most frequently mentioned issues noted by survey respondents.
While these issues were also prevalently mentioned in the previous year’s edition of SIA’s survey, property owners ranked tax issues, rising insurance costs and economic uncertainty caused by increasing gasoline prices as the key macroeconomic issues facing the self-storage industry in 2006.
“The supply and demand trends identified as 2007’s key issues have been gaining traction during the past few years as the self-storage development boom was in full swing. As a result of this increasing development, some markets now have an oversupply of storage units and owners are finding it difficult to raise their rents, thus negatively affecting their revenue and occupancy projections,” says Aaron Swerdlin, SIA’s managing partner.
“Last year, our survey responses reflected the initial shock of dramatically higher gas prices and insurance premium rates for property owners. It seems those issues, in particular, have now settled into the consciousness of our industry. Owners clearly recognize higher taxes, insurance rates and gas prices are now part of their operating landscape and not disappearing at any point in the near future,” he continues.
2007 survey respondents reported current physical occupancy levels at their facilities ranged from 65 percent to 98 percent, with the average being in the 85-89 percent range. While some survey respondents were single property owners, others were publicly held real estate investment trusts that own and operate 1,100-plus properties.
Swerdlin further comments: “The SIA survey results offer a snapshot of what is on the minds of the nation’s self-storage property owners at a specific point in time. We have been able to identify some broad trends that affect self-storage property purchasing and financing behavior, and use this data to better advise investors with their real estate needs.
“What I find most interesting is that had the survey been conducted this summer, the interest rate and capital markets concerns certainly would have been at the top of the list, while overbuilding and oversupply might not have even made it on to the list of top five issues. Today, the overbuilding issue seems to have evaporated while capital market concerns have taken sole possession of what is on investors’ minds.”
Storage Investment Advisors, LLP
Founded in 2006, Storage Investment Advisors manages self-storage property dispositions, acquisitions and capital market executions/financing on behalf of institutional and private capital clients. SIA team members have bought, sold, brokered and financed more than $1.2 billion worth of self-storage real estate, collectively making SIA the industry’s leading real estate services firm based on transaction volume. Headquartered in Houston, SIA also has an office in Los Angeles.
For more information about the 2007 survey, please call 713.838.8000 or email info@siallp.com.
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Contact
Storage Investment Advisors, LLP
Minh Tran
713-838-8000
www.siallp.com
Minh Tran
713-838-8000
www.siallp.com
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