Developer · Los Angeles, CA · Member since 2010 · 101 posts · 14 votes
Curious to what people think here. Imagine if you had a self storage facility that was going to be demolished for future development, what % of the tenants you think would try and find a new facility to move to? Let's say though most of the tenants have been in the unit for years and rent was 30%-40% below most of its nearby competitors (within 5 mi) but there are places that offer rent in that range but they are 20 mi away (a 40 min drive).
Hi @Peter Lee. I don’t know if there’s any scientific data on what you are asking. I will say this: since self storage is such a small cost in the scheme of things for most people, I would guess that they will generally not leave a 5 mile radius. I would rather pay 30% more to be within a 5 mile radius then get a discount 20 miles away. That’s just me, but I’m guessing most people would feel that way.
Hi @Peter Lee. I don’t know if there’s any scientific data on what you are asking. I will say this: since self storage is such a small cost in the scheme of things for most people, I would guess that they will generally not leave a 5 mile radius. I would rather pay 30% more to be within a 5 mile radius then get a discount 20 miles away. That’s just me, but I’m guessing most people would feel that way.
@Paul Moore yeh this is a tricky one. Pretty rare at least in my area that a self storage site gets bought out since they usually cash flow so well, they leave it as is. So not many comps. I asked the prop manager who's been in the biz for years and she thinks maybe 25-50% would relocate to the nearby facility but she said it wasn't a sure thing.
Thanks @Paul Moore @Peter Lee - I don't think price or distance is the issue in this scenario. I don't think people will have the ability to wait for the site to be demolished and rebuilt. People rent self storage because they have an immediate need, not something they palm for say 9 months away.