Self Storage Declining during Coronavirus

[Ari S.]

Self Storage has always been touted as recession-proof but data is showing people are spending -50% less on it since Coronavirus quarantining. What do the experts in this space think? Are folks deciding to cancel memberships or monthly subscriptions they don't need now? We've cancelled Gym and others to save costs.

Interesting article below to show where spending is going in the first months of Coronavirus quarantine in the US

https://www.nytimes.com/interactive/2020/04/11/business/economy/coronavirus-us-economy-spending.html

[Jay Hinrichs]

Originally posted by @Mitch Messer:

Hi @Ari S. and thanks for sharing this article!

It's certainly possible that self storage might be impacted by COVID-19, but I think it's waay to early to draw that conclusion from this report.

Per the report footnotes, the data presented represents "changes in spending from 2019 for the week ending April 1" [italics mine]. For self storage, I imaging the presumption is that customers would pay their unit rent during this week.

If I had to guess, more than a few of those folks were responding to the anxiety and fear of late March.

But late payment is not non-payment. Not yet!

I have no doubt that 60% more self storage clients are late this year, compared to 2019.

However, only time will tell whether self storage clients are willing to forfeit their possessions by defaulting on their unit lease agreements.

I am not an expert at SS by any means I did own a small 45 unit property in Portland during the GFC.. what happened to us is the folks just moved their junk and that was it.. they dont pay  we go check it out and nothing in it but JUNK..  not all but we had quite a few decamp on us.  here in PDX you see move in specials on most.. there has been a big building boon here for 3 to 5 story buildings ( expensive storage)

My personal banker seems to think if push comes to shove folks will not pay for storage.. not sure if he had some storage clients that experienced that last go around or not.  the other thing i had was two people try to live in the unit  LOL