Yes, even the self storage shows!
A year and a half ago, following 2014 SSA Fall Conference and Trade Show, I wrote about the new levels of ecstatic energy around the industry after climbing out of what seemed like a bottomless pit for some trailing the late 2000’s. In fact, I even asked in my article following the Show, “the real question is, how long with this seemingly eternal optimism last?”
Well, folks, it seems as though the good times are here to stay! (Through the end of 2016 at least). Cap rates are hovering around all-time record lows, record prices are being set left and right throughout the country, facilities are being built bigger and better than they ever have been before, and the market is awash with new investors and sources of capital. However, with that being said though, there are some factors on the horizon that are not concern for panic and alarm – rather, something that should be closely monitored:
The first of which is when will the Fed raise rates? My prediction – 25 basis points in December. This will be the start of, in my humble opinion, the leveling out of the market and some of these rather overzealous prices we are seeing tossed around so seemingly lackadaisically will begin to subside. What does that mean for owner / operators? Now is a great time to sell! We know the Fed is going to raise rates, and the market is the best it has ever been – why not capitalize on it?
The second factor that should be carefully watched is certain markets being overbuilt. Yes, the flood of money and attention to the industry is astounding and wonderful, and a lot of the development is warranted as there was a great amount of pent up demand in numerous markets – but, in this haste someone has to lose, and it will be the newcomers with little to no guidance from an industry expert, and those who do not carefully watch how and when they’re entering a given market.
However, with all of this being said, Lindsey Self Storage Group is looking forward to another year of growth and success within the self storage industry!
As you explore your own self storage goals throughout the year and beyond, please make sure to reach out to Lindsey Self Storage Group with any comments, concerns or questions you may have in regards to brokerage, consultation, ground-up development, and third party management.