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Self-storage industry is packing in profitability
By PAUL SWIDER
Published April 15, 2007
Self-storage businesses used to be thought of as placeholders, a way to give landowners time to decide how to develop a property. But these days, people have too many things and too little room. That has turned self-storage into a moneymaker in its own right. "It's based on the whole idea of people getting more and more stuff," said Michael Mele, a real estate broker marketing two new storage developments in South Pasadena and Pinellas Park. Mele, who works for Marcus and Millichap but is also president of the Florida Self Storage Association, said such properties sell for a premium because their business model, with its steady cash flow, is so lucrative. The Pinellas Park property, at 10260 U.S. 19, is a $7.2-million revamped manufacturing facility that will provide 66,000 square feet of storage space. The other property, at 950 Pasadena Ave. S, is a former Kmart that offers 58,000 square feet for just under $8-million. Brad Baldwin, whose Quality Self Storage owns the two facilities, said he was about to sell the Pasadena property to Wal-Mart, but the storage option was more attractive. Self-storage as a business goes back 150 years, but it took off in the past 20, according to the national Self Storage Association. In 1984, there were 6,600 facilities in the United States, with less than 300-million square feet. Now there are nearly 10 times as many with 2.2-billion square feet. There are about 2,800 storage units in Florida. Another new facility is going up just east of Fourth Street on Gandy Boulevard. That 87,000-square-foot building will be the latest of nearly 75 Parr Builders has constructed since 1984, said Parr's Rob Ciaravino. Florida is an attractive market for self-storage, Mele said, because homes here rarely have basements. "All the baby boomers are downsizing," he said, "but the things they collected all their lives they have to store somewhere."
[Last modified April 14, 2007, 20:14:38]
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