Hurricane Irene Affects ExtraSpace Storage — and the Stock Market

Posted on Aug 29 2011 - 3:12pm by Holly Robinson

Extra Space Storage spokesman, Clint Halverson, reported that approximately one-third of their properties and customers were located in areas hit by Hurricane Irene. It is too early just yet to tell the extent of the damage done to any of their storage facilities.

Halverson went on to say that demand for storage units increases after natural disasters such as a hurricane. Businesses and contractors who come into the area to help with cleaning up during the aftermath need storage facilities for all of the extra tools and equipment they bring in.

Homeowners also need a place to temporarily store their belongings while they clean up their homes and property. Some may need storage space for their belongings while they rebuild and repair damage done to their homes. Sometimes tenants rent units longer than normally planned because the storm disrupted their plans.

In the first day of trading on the stock market after Hurricane Irene passed over the northeastern United States, some stock market shares went up. Shares and stock go up when something on a large scale needs to be rebuilt. Cooper Industries (distributors of electrical transformers), Quanta Services, Inc. (an engineering and construction company), and Watsco Inc (a national distributor) are companies predicted to outperform the general stock market.

Because Hurricane Irene was widely predicted and publicized, people were able to make purchases in advance of the storm of items used to protect their homes. Lowe’s Cos Inc, Home Depot Inc, and Sears Holdings reported increased sales of plywood, batteries, generators, buckets, and chainsaws.

Lowe’s adhered to its policy of not raising prices because of an extreme natural disaster. They maintained pre-hurricane prices on high-demand products such as flashlights, batteries, wheel barrows, ladders, and generators.

It is predicted that publicly traded storage facilities could see a temporary boost in the stock market as well. These businesses include Extra Space Storage, U-Store-It, and Sovran Self Storage.

Because Hurricane Irene caused less damage than expected, there was less negative impact on the stock market. In fact, the stock in some companies rose Monday. These included insurance companies such as Allstate, MetLife, Chubb Group, and Hartford Financial Services Group.

Sources Used:

“Irene could lift machinery and engineering shares.” NewsDaily; 29 August 2011.

“Stocks rally in wake of hurricane.” Fox Business CNN News; 29 August 2011.