When the kids finally move out and venture in to the world on their own it is not unusual for Mom and Dad to get in to a discussion over what to do with their son/daughter’s former room. They have some space now—so what should they do with it? It would be a waste to do nothing of course so something needs to be done.
Real estate developers sometimes find themselves in this kind of quandary. For some reason a piece of land and/or a building just hasn’t sold or been developed. Maybe the location is not the best for certain things. Maybe someone just hasn’t had a good idea for it yet.
In such cases the company should give serious consideration to the self storage industry.
Right now the self storage industry is as safe as an investment can get. Several factors have contributed to the overall success of the industry of late, but when it comes down to it with America’s desire to buy, buy, buy the need for more and more space will only to continue to grow.
“As the U.S. economy improves with many Americans choosing to rent instead of own, the fundamentals of the self-storage market continue to improve, especially for high-quality, proven assets in major markets,” said Frances Bo, a loan originator for Prudential Mortgage Capital.
Prudential recently approved a loan to Lock Up/Evergreen Storage LLC for $131.7 million so they could gain ownership of 18 self storage facilities in Chicago, Minneapolis, Florida, New Jersey, Hawaii, and Massachusetts.
“This is now our third large portfolio transaction with the Prudential Mortgage Capital team,” stated Rick Hielscher, a partner with The Lock Up.
That kind of transaction just goes to show that there is money to be made in the industry and not just in any one location.
Bristol, Tennessee officials may not have wanted to approve a self storage facility for a space off of Volunteer Parkway, but in the end it was a sound business call—so it was made (all be it with requirements).
“If you get a non-franchised restaurant in there, studies tell us that 90 to 95 percent of them go broke within five years. You’re left with an empty building with no income coming in, no tax coming in and no jobs. If I didn’t think it was needed or would be successful, I wouldn’t want to put it there. This seemed like a reasonable place to build a business like this,” said Dr. Richard Bowie, the property’s owner.
“Prudential Mortgage Capital Company provides $131.7 million self-storage loan.” MarketWatch; 18 June 2014.
“Self-storage complex approved for development.” Tricities.com; 18 June 2014.