Wednesday, December 24, 2008

Self-Storage Rentals Growing Amid Foreclosures, Cutbacks (EXR; PSA; SSS; YSI)

Public Storage (PSA) is the big dog of the group. From the Wall Street Journal's The Wallet blog:

As foreclosures and tightening budgets lead people to downsize their living spaces, some folks are moving their valuables into self-storage facilities.

Charles Ray Wilson, president of Self Storage Data Services Inc., says the self-storage industry should continue on its “smooth road of solid performance considering its strong fundamentals.” His research company, which tracks self-storage trends, says rent per occupied square foot of self-storage in Detroit — one of the nation’s softest real estate markets as measured by home foreclosures — hit bottom in the fourth quarter of 2006, but rent for self-storage has since increased 18%.

The self-storage market nationally is, however, starting to show signs of weakness due in part to the prolonged housing crisis and deteriorating economy. Third quarter rent per occupied square foot declined 3% nationwide. Declining home sales pose a risk to the self-storage industry, says Wilson, because “fewer sales translate to few moves, and it’s the moves that create the demand for storage.”>>>MORE