by Mark Lusky
Selfstorage.com's 2013 Economic Survey results are revealing that self-storage operators are optimistic, growing and progressive in their marketing approaches. Almost two-thirds of respondents reported that their facility gross revenues climbed 5-10+% over the previous year; another 22% said revenues stayed about the same.
There also is long-term stability. Fifty-eight percent of respondents said they've been involved in the industry for more than a decade, and 34% have been in self-storage 2-10 years.
Rental traffic is improving. Compared to 2011 and 2012, 2013 rental traffic to date is either "somewhat higher" (46%) or "significantly higher" (19%), accounting for nearly two-thirds of the responses. Another 24% noted that traffic was about the same.
To convert traffic into tenants, 37% of respondents revealed they didn't need to offer rent concessions in the last year. When concessions were offered, 49% applied to new rentals only, while another 14% applied to new and existing tenants.
Self-storage property values are improving right along with business revenues. From 2011 to 2012, 60% of survey takers reported significant/moderate increases, while another 27% said they held steady. On the facility financing side, 47% said they had low loan-to-value financing in place, while another 33% financed in the last few years and found funds relatively available.
As self-storage operators grow, their reliance on traditional advertising is shrinking. Social/digital media use, however, is on the rise. In 2013, 23% of respondents indicated they planned to use more online directories; 20% cited rising use of social networking sites such as Facebook and LinkedIn; and another 14% cited pay-per-click advertising options on Google, Yahoo, et al.
Meanwhile, 17% said they would use less print advertising, and 33% were less inclined to use Yellow Pages. TV, radio and outdoor advertising took 9%, 12% and 10% hits respectively.
Our findings jive with a recent Inside Self-Storage article that reports, "The self-storage industry has rebounded nicely from the recession despite oversupply in some areas, real estate investment trust CubeSmart recently revealed in an article interview...The industry is doing 'extremely well' due to a stronger housing market, lower unemployment and higher consumer confidence...CubeSmart's utilization rate climbed to 84.4 percent in 2012 from 78.4 percent in 2011."